New York-based Gen II Fund Services, one of the country’s largest independent fund administrators, has expanded westward buying Stone Pine Accounting Services of Denver.
The deal creates a Denver hub to better service West Coast businesses and it provides a key link for Gen II’s service network that spans from Luxembourg to San Francisco.
“This gives us an extra two hours of servicing time and really helps us support our West Coast business,” Steven Millner, managing principal of Gen II, told Private Fund CFO. “To keep pace with the rapidly maturing private equity business, we need quality people to grow our machine.”
Discussions, which started in May, came about informally at the suggestion of an industry contact, Millner said. The deal closed in late July. There was no intermediary used on the transaction, he added.
“As we explored possibilities, we found that we shared similar goals and spirit. We were impressed with the talent,” Millner noted. “There are not many places where you can go to find so many people that could fit into our organization.”
Scale matters in the fast-maturing private equity business, Millner added. Fund administrators need to grow quickly to attain the size needed to invest in the technology that supports the greater demand for quicker response from limited partners.
Private equity sponsors need to broaden support capabilities as they raise new money for co-investments, and venture into new areas like private debt, Millner noted. As a PE firm’s reach expands, so does the number of legal entities that need servicing.
Founded 23 years ago, Stone Pine Accounting Services offers custom services to private equity sponsors, with about 150 employees and $40 billion of assets under administration.
Megan Howell, former managing partner at Stone Pine, now principal at Gen II and head of the Denver office, agreed that the merger will allow Gen II to strengthen its coverage. “Time zones do make a difference and our proximity will be good for client service,” she noted.
“Partnering with one of the largest independent fund administrators allows us to grow with our clients,” she added. With the merger, Donald Jackson, the founding partner of Stone Pine, retired.
Gen II now serves more than 200 sponsors across the alternative asset spectrum including private equity, buyout funds, credit, real estate, infrastructure and closed-end structures.
Since 2009, Gen II founders Steven Millner, Steven Alecia and Norman Leben have built a firm that serves more than 5,000 funds and about 50,000 investors. The administrator focuses on servicing closed-end funds based in United States with a gateway to Europe in Luxembourg. The acquisition raises the firm’s size to 750 employees and about $600 billion under administration.