KKR Eyes Private Markets Gold Rush With $5.1 Billion Gen II Deal

KKR & Co. Inc. (NYSE:KKR) said Monday it agreed to acquire Gen II Fund Services LLC from Hg, General Atlantic and other minority investors for $5.1 billion. KKR will make the investment through its Core Private Equity strategy. Gen II’s current management team, led by CEO Steven Millner, will remain in place. KKR Bets On Private Markets Growth Gen II provides fund administration services to more than 275 investment managers representing over $2 trillion in assets. The company also offers tax, compliance, treasury and technology services. KKR plans to support Gen II’s expansion in the U.S. and overseas while investing further in proprietary technology and artificial intelligence tools. As of the end of the second quarter, KKR’s cash and short-term investments stood at $5.3 billion. General Atlantic and Hg invested in Gen II in 2020. Since then, the company has quadrupled revenue and EBITDA and completed four acquisitions. The deal is subject to regulatory approvals and other customary closing conditions. It is expected to close in 2027. Earnings And Analyst Outlook KKR is scheduled to report its next earnings results on Nov. 9. Wall Street expects earnings of $1.59 per share, up from $1.41 a year earlier. Revenue is projected at $2.80 billion, compared with $2.40 billion in the year-ago period. KKR trades at a price-to-earnings ratio of about 28.7. The stock carries a Buy consensus rating with an average price forecast of $126.82. Wells Fargo initiated coverage on Oct. 2 with an Equal-Weight rating and a $97 price forecast. Oppenheimer maintained an Outperform rating on Aug. 27 and raised its forecast to $166. Argus Research maintained a Buy rating on Aug. 4 and raised its forecast to $125. Benzinga Edge Rankings KKR has a Momentum score of 17.51, reflecting weak recent price performance. Its Value score of 67.93 points to a more neutral valuation profile. The Benzinga Edge Rankings therefore show a mixed setup. Weak momentum remains the biggest concern, while the value score provides some support for longer-term investors. Top ETF Exposure Tema Listed Private Managers ETF (BATS:PRVT) has a 5.16% weighting in KKR. Akre Focus ETF (NYSE:AKRE) has a 7.10% weighting, while Invesco Global Listed Private Equity ETF (NYSE:PSP) has a 4.89% weighting. Because KKR represents a meaningful position in these funds, significant ETF inflows or outflows can contribute to buying or selling pressure in the stock. Price Action KKR Stock Price Activity: KKR shares closed Monday at $89.96, down 0.37%, according to Benzinga Pro data. Photo via Shutterstock Read Also: Blue Owl Investors Seek to Pull 39% From $5B Tech Credit Fund