Archives: News

Gen II invests in company growth and employee career paths with five new Principal promotions

NEW YORK,  February 27, 2024Gen II Fund Services, LLC (“Gen II”), a leading independent private capital fund administrator, today announced the promotion of five new principals, showcasing its commitment to growth within and its investment in the professional development of its employees.

The Gen II 2024 Principal Class includes:

Michael Abatemarco – New York
A credit and alternative funds professional with more than twenty years of experience in public and private leverage credit operations, Michael Abatemarco leads the Gen II credit client service team and drives enhancements for the firm’s suite of credit services.

Dima Kasaji – New York
Dima has more than thirteen years of experience in private equity accounting. She has extensive knowledge of buyout funds, real estate funds, fund of funds, feeder funds, co-investment vehicles, direct investments, complex structures, general partner and carried interest accounting, and waterfall modeling.

Zhen Li – New York
Zhen has over 18 years of experience in the private equity industry. She has extensive knowledge of Infrastructure, Real Estate, Buyouts, Venture Capital, and Credit funds, as well as complex fund structures and waterfall calculations.

Katerina Loridas – Boston
Katerina has over 14 years of experience in the funds industry, with a focus on private equity for the past 7 years. She is an expert in fund of funds and has extensive knowledge of investment management, US GAAP, and investment companies with Regulation S-X requirements.

Nicholas Stangl – San Francisco
A principal at Gen II, Nick has over two decades of experience in the alternative investment space with a background that includes business development, operations, accounting, compliance and information systems.


These individuals have consistently exhibited a strong impact-driven mindset, continuously expanding their skill sets, and fostering collaboration across various areas within the firm. Their efforts have not only contributed to the success of Gen II Fund Services, but have also played a crucial role in enhancing client experiences and strengthening the company’s position in the market.

“At Gen II, we are dedicated to fostering a workplace culture that prioritizes recognizing talent and encouraging inclusion. With our firm operating close to parity with respect to gender and recent Principal promotions reflecting a significant representation of female talent — with 3 out of 5 promotions being women — we affirm our commitment to empowering and advancing women within our organization,” said Anne-Claire Berg, Chief People & Impact Officer at Gen II Fund Services, “These promotions prove Gen II’s unwavering dedication to investing in our greatest asset – our people. We continue to thrive as a growing organization and our dedication to promoting from within showcases our belief in nurturing talent and providing a clear career trajectory for our team.”

About Gen II

Gen II is a leading fund administration provider focused entirely on serving private capital asset managers and investors. Since its inception in 2009, the company has become one of the largest independent private capital fund administrators, with more than $1 trillion of private fund capital under administration. Gen II offers private fund sponsors a best-in-class combination of people, process, and technology, enabling GPs to manage their operational infrastructure, financial reporting, and investor communications most effectively. For more information, please visit

Media Contact

By implementing cutting-edge automation and process enhancements, Gen II has significantly accelerated the onboarding of investors, streamlined regulatory compliance, and expanded access for retail investors to private equity.

Overcoming Traditional Barriers
Historically, high administrative loads and opaque investment processes hindered retail investors’ access to private markets. General Partners faced daunting challenges in raising capital due to complex investment processes and stringent KYC and AML requirements. Gen II identified these obstacles and crafted a solution that not only addressed these issues but also transformed the investment landscape.

A Revolution in Fund Management
Through the introduction of end-to-end automation and leveraging APIs, Gen II streamlined high-volume transactions associated with funds. This innovation has not only expedited the investor onboarding process but has also facilitated “just-in-time” capital event processing, creating a scalable, retail-grade operating model.

Transformative Benefits
The impact of Gen II’s solutions included:

  • Expanded Opportunities for Fund Sponsors: Easing the administrative burden and opening new distribution channels.
  • Enhanced Access for Limited Partners: Offering liquidity and diversification in investment options.
  • Market Accessibility for Retail Investors: Simplifying entry into private markets, previously marred by administrative complexities.

A Step Towards Inclusive Investing
Gen II’s approach significantly reduced onboarding times, from 72 hours to 12 hours, while ensuring compliance with regulatory standards. This highlights Gen II’s commitment to innovation and marks a significant step towards inclusive investing, providing retail investors with opportunities that were once out of reach.

Gen II’s digital transformation exemplifies how strategic automation and process improvements can dismantle traditional barriers, and increase access to private market investments. As the financial landscape continues to evolve, such innovations will play a pivotal role in shaping the future of investing, making it more accessible and efficient for all.

In February 2024, The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) announced significant amendments to Form PF, impacting Private Fund Advisers. These modifications expand the scope of information required, including detailed insights into assets under management, investor transactions, fund performance, and investment strategies. Furthermore, the amendments necessitate separate reporting for master-feeder and parallel fund structures and introduce look-through reporting for trading vehicles.

These new requirements will take effect 12 months after the rule enters into the Federal Register.

For further details on the amendments and access to the official SEC press release and fact sheet, please visit the SEC’s website.

Navigating Form PF Changes with Gen II Fund Services

As a leader in fund administration, Gen II Fund Services is dedicated to assisting our clients in navigating these updates. We are committed to adapting our solutions promptly to align with the new technical specifications provided by FINRA. Our team will keep our clients informed about solution enhancements and necessary actions to ensure smooth compliance with the revised reporting requirements.

We understand the importance of these changes and are here to support our clients every step of the way. For additional information or assistance, please contact your Gen II representative.

Form PF compliance requires timely filings, an understanding of complex calculations, and a deep knowledge of fund activities. As a result, firms often outsource to specialists like Gen II Fund Services, which offers a robust, scalable regulatory reporting solution. Gen II’s platform provides centralized regulatory reporting across various jurisdictions, designed with modern architecture for scalability, data integrity, security, and compliance. It uses a unified data model to streamline reporting processes, enabling clients to efficiently review, approve, and file reports, reducing risks and improving efficiency.

Gen II Compliance Services for Form PF

Form PF filing for all entities in scope, even those not administered by Gen II

Integrated solution for data identification, aggregation, calculation, verification, and storage

Access to a complete audit trail, storage, and reconciliation of Form PF data

Form PF filing is completed directly on the FINRA site, where clients can review and submit

Navigating the complex world of private equity fund economics is a major challenge and an essential aspect of fund management. A comprehensive understanding of distribution mechanisms from the beginning is crucial. This requires careful preparation and thorough review by all parties involved to grasp the nuances of Limited Partnership Agreements (LPAs).

Navigating Through Misinterpretations and Miscalculations

Given the complexity of distribution waterfall frameworks and the diverse terminology used in various professional sectors like investment, legal, finance, and technology, it is crucial to communicate clearly and ensure a mutual understanding among all stakeholders. Therefore, it is important to meticulously review LP side letters and distinct agreements, apply documented stipulations with precision, and navigate the varied layers of complexity even within an individual fund.

The distribution waterfall can be quite complex and has been known to occasionally result in miscalculations and errors. If left unchecked, these errors can lead to significant challenges, particularly in the later stages of the fund’s life. For example, instances where the waterfall model was misinterpreted or certain economic arrangements for specific investors are overlooked can lead to errors. The complexity is further accentuated when there are multiple waterfalls, with some funds incorporating up to five or six varied scenarios. As a result, it is imperative to calculate waterfalls on a partner-by-partner basis to avoid errors.

Addressing Challenges and Leveraging Third-Party Expertise

Making corrections to waterfall calculations is heavily influenced by the stage of the fund. If a fund is actively involved in the process of harvesting and liquidating investments, adjustments can be made through future capital distributions. However, for funds that are close to their end phase, corrections can become more complicated, which may require unwanted solutions such as withdrawing funds from the general partner or asking for additional capital from limited partners.

While it might be feasible for GPs to manage calculations internally, utilizing even seemingly straightforward tools like Excel, this often necessitates additional due diligence to understand the embedded checks and balances. Third-party administrators, such as Gen II, have been pinpointed as key partners due to their investment in superior technology, security, and a team of professional accountants, offering economies of scale that individual managers might find challenging to achieve.

It is paramount to ensure accurate waterfall calculations, despite the layers of complexity and potential pitfalls that come with it. Any miscalculations can lead to significant implications for both GPs and LPs. Therefore, conducting a comprehensive and independent early-stage review is not only the best practice but also essential to avoid any potential negative consequences in future stages. These calculations are scrutinized by LPs, auditors, and potentially the SEC, making it even more crucial to get them right.

Management Company Report 2024

The 2024 Management Company Report explains the need for private equity management companies to focus on regulatory compliance, prioritize human capital, strategically allocate resources, and adopt technology for operational efficiency. These elements are vital for navigating regulatory challenges and ensuring sustainable growth in a competitive landscape. Key themes include:

  • Strategic Planning & Growth Focus: Importance of strategic planning, including the adoption of new technologies and expansion into emerging markets. This approach is critical for staying competitive and ensuring sustainable growth.
  • Financial Management & Performance Analysis: Significance of rigorous financial management and regular performance analysis. For management companies, this means implementing robust financial controls and utilizing data analytics to drive decision-making.
  • Risk Management & Compliance: Necessity of comprehensive risk management frameworks and strict compliance with regulatory requirements. This is crucial for mitigating potential threats and ensuring the integrity of operations.
  • Human Capital & Organizational Culture: Stresses the role of human capital and the cultivation of a positive organizational culture. For management companies, investing in employee development and fostering a collaborative work environment are key factors in achieving long-term success.

Management companies must focus on strategic growth, maintain rigorous financial oversight, adhere to high standards of risk management and compliance, and invest in their people to thrive in a dynamic business landscape. These principles are foundational to navigating the complexities of today’s market conditions and securing a competitive edge.

See full Management Company Report 2024

With increased competition for fundraising, management companies are focusing on aligning their strategies for resource allocation and internal expenses with investor expectations, showcasing a clear value proposition, and demonstrating strong track records. As firms manage unrealized capital and navigate the intricacies of regulatory scrutiny, there’s a growing expectation for increased transparency. Internal expense ratios within private equity firms exhibit surprising variability. Benchmarking these expenses becomes crucial for obtaining valuable insights into peers’ average expenditures on back- and middle-office capabilities. This information is particularly significant as management companies face increasing scrutiny to enhance efficiency and comply with new regulations.

Talent compensation is a top priority

Gen II’s analysis of management company spending segmented firms into three categories based on assets under management, but one thing rang true no matter the size – firms are focused on investing in talent and creating operational efficiencies. As the private equity landscape becomes more complex, there is an increasing demand for skilled professionals. Management companies are investing in talent development, training, and attracting individuals with diverse skill sets to meet evolving industry needs. Respondents across AUM categorizations on average reported 69 percent of their spending expenditures going toward talent compensation. From the $0-$499 million category to the $1 billion-plus category, there was less than a 10-percentage point difference when it came to compensation spending, highlighting that no matter the size of a manager, talent, and retention are the top priority.

Prioritizing internal structure aligns with LPs’ expectations

The changing needs of private equity management companies reflect the evolving landscape of the industry, influenced by various factors such as market trends, regulatory changes, technological advancements, and investor expectations. Management companies exhibit a prudent approach in their spending strategies, emphasizing risk avoidance. Even with a marginal uptick in post-pandemic spending on travel and entertainment, the overall percentage allocated to this category has decreased from 5 percent to 3 percent since 2016. This trend underscores the ongoing commitment of fund managers to prioritize internal structure. It serves the dual purpose of satisfying limited partners and aligning the overarching goals of the firm with the activities of general partners. This reflects a continuation of fund managers focusing on strategic alignment and resilience in the face of evolving circumstances.

Strategic focus leads to greater insights

Certainly, a significant number of private equity managers often perceive activities beyond the realms of sourcing new deals, fostering portfolio company growth, and executing investments as distractions from their daily priorities. However, amid a progressively competitive environment for fundraising, limited partners are now closely examining back-office capabilities. ILPA’s revised version of its standard Due Diligence Questionnaire extensively explores aspects ranging from management company economics to cybersecurity, compliance protocols, and the utilization of an independent fund administrator by firms. Increasingly, management companies are focusing on robust data management and analytics tools to derive valuable insights, improve decision-making, and enhance operational efficiency. Adaptability and a proactive approach are crucial for private equity management companies to thrive in the dynamic and competitive landscape of the industry.

Not so long ago, GPs rarely shared due diligence proactively. Now, LPs expect it.

Being an expert dealmaker isn’t enough. The elite GPs of today realize that understanding the nuances of fund administration and putting adequate risk management procedures in place is on par with having an optimal fund composition.

In essence, operational due diligence (ODD) is an evaluation as to whether a prospective manager is prepared to deliver strong or expected returns, securely as assessed by criteria such as historical track record, collective investment team experience, anticipated fund strategy, and incident response plan.

ODD serves as a litmus test of what LPs can expect from GPs down the road and shows whether a manager is transparent in the eyes of investors.

Prioritizing the Operational Due Diligence Timeline

As part of due diligence questionnaires (DDQs), response time and preparedness are top indicators of how well a GP can meet LP expectations. Proactively meeting industry standards, such as those outlined by ILPA, could help attract investors.

“What I think helped propel that trend of transitioning to outsourcing is that there was so much operational due diligence being done in the hedge funds space, and LP’s were so used to having a third party fund administrator or prime broker. I believe it will continue to trend in that direction, which is great news for Gen II.” – Kristine O’Connor, Managing Director and Chief Financial Officer, Franklin Park

GPs should both highlight their successful history of executing good due diligence and show how they have plans in place to mitigate future risks. Understanding future ODD triggers, such as key man clause activation or failure to meet ESG targets, is essential for managers looking to effectively manage their relationships with key LPs.

The lifecycle of ODD does not cease once the check is signed, and remaining prepared for future diligence is something that fund managers must stay vigilant about post-close.

Demonstrating an understanding of compliance also plays a key role in properly executing ODD, especially as regulation continues to evolve. ODD that shows how a GP can adapt based on real-time changes instills confidence in LPs. Managers who can’t speak to how they plan to address industry changes raise a red flag in the eyes of a prospective LP.

Third Parties As ODD Assurance

With such high expectations and myriad layers of ODD, delegating to a trusted partner is a sound strategy. A fund administrator is well-versed and well-practiced in compliance, reporting, and transparency to deliver peace of mind and can differentiate GPs. A reputable partner provides an extra layer of insurance, which is especially important if a GP’s internal capabilities aren’t substantially built out.

Even more, third-party valuations are often considered the gold standard. GPs can seamlessly upkeep a reporting cadence without concern of inherent bias. Third-party providers can place financial statements and cash flow tracking documents directly into the hands of LPs quickly, while also ensuring GPs are aware of any discrepancies that might make the difference for getting a fund allocation.

Accuracy is just one part of their overall approach to mitigating risks, as LPs are increasingly looking for GPs who embrace technological innovation and data-driven strategies. Strong digital capabilities are now a hallmark of a trustworthy GP.

“From a cybersecurity perspective, if you do have an internal team who’s looking after your IT infrastructure, it’s a good idea to have a third party come in and kick the tires because they’re independent. They can do an internal-external penetration test and double check the controls and security you have around the system.” — Elizabeth Ferry, Director, Operational Due Diligence at StepStone

Cybersecurity, for one, is a top focus for investors. Just like views have changed on how a GP selects a bank, a manager’s cybersecurity capabilities are paramount. In terms of remediation, managers prepared for ODD can provide their LPs with clear plans, including details about treasury management reporting in the event of a crisis.

Tech Stack Tipping Point

Elite GPs are noted for their tech stacks. The technology enhances the speed, accuracy, and depth of their due diligence processes. This extra edge is even more important as private market investments dwindle, making them stand out and enabling them to exceed LP expectations.

GPs looking for new LPs to allocate or existing LPs to reallocate must create a modernized tech stack to maximize operational due diligence practices that can evolve alongside a changing industry. An enhanced tech offering can help provide insights into complex risks mitigated by operational due diligence, from cybersecurity to ESG reporting.

“They [LPs] are looking to understand the steps that you’re taking in your ODD process and, as the GP, what you’re telling your investors about your ability to protect data, the security you put around it, and technology that you’re utilizing in that regard.” — Jeff Gendel, Principal at Gen II Fund Services

In such a competitive market, prioritizing ODD enables GPs to stay ahead of investor requests, deploy trusted tech, mitigate risks effectively, and ultimately produce returns in an uncertain environment. Not only will ODD continue to remain a key part of the LP-GP dynamic, but GPs who leverage LP feedback and findings during this phase will find they can improve their internal processes, even after handshakes have been made.

In an ever-changing financial landscape, the approach to tax compliance is a critical component for businesses. Kevin Zeman of Gen II offers unique insights into this dynamic field. Drawing from his extensive experience, Zeman shares the transformation of Gen II’s tax department, emphasizing a client-centric approach and the importance of adapting to regulatory changes. His perspective reflects the evolving nature of the client–service provider relationship and underscores the significance of innovation and strategic planning in staying ahead of regulatory challenges.

Q: How has Gen II’s approach to tax compliance evolved?

A: At Gen II, we’ve significantly transformed our tax department. This isn’t just a tactical change but a fundamental shift in our philosophy. The result is a client-centered approach, tailoring our services to the individual needs and business models of our clients. This pivot is about deepening our understanding of each client’s unique circumstances and putting less emphasis on the returns and a greater focus on creating and delivering access to the data used to create them.  This shift allows Gen II to create a continued presence throughout the year to assist with strategic tax planning and operational tax management to achieve the desired result.

Q: What is at the core of Gen II’s client engagement strategy?

A: Our core strategy is deeply rooted in personalization. No two clients look the same from a resource or needs standpoint. We focus on understanding the distinct aspects of each client’s business model. This approach goes beyond traditional tax compliance. We commonly find discussions that begin with tax compliance requests and end with bespoke operational solutions designed to address the client’s specific challenges. By staying ahead of changes, we can adapt strategies to provide our clients with the most effective, forward-thinking solutions.

Q: What challenges does Gen II face in the tax industry?

A: The tax industry is constantly changing, especially with the rapid evolution of tax regulations and the increased focus on investor reporting. Our biggest challenge is staying ahead of these changes. This requires a proactive stance, not just vigilance. We’re always forecasting future trends and adapting our strategies accordingly. Our goal is to ensure that our clients not only keep up with these changes but are also positioned to respond quickly to changing circumstances.

Q: What has been key to your success in the tax profession?

A: My success in the tax profession is attributable to a mix of continuous learning, adaptability, and a relentless focus on client needs. This approach has been integral to the philosophy of Gen II. Our mission is to embody these values in everything we do, ensuring that we deliver not just tax services, but excellence and innovation in our solutions. This client-focused strategy is what sets us apart in the industry.

Kevin Zeman’s insights provide a unique viewpoint on the dynamic world of tax compliance. Gen II’s focus on a customized, client-centered approach highlights the necessity of evolving strategies in response to the ever-changing tax landscape. His perspective underscores the importance of innovation and strategic foresight. Tax data management is proving essential for businesses seeking to increase the quality of their LP experience and effectively navigate the complexities of modern tax regulations.

In the ever-evolving landscape of private equity, Gen II underscores the necessity of integrating advanced technology for sustainable growth and improved operational efficiency. Embracing Canoe Intelligence, we are poised to offer significant advantages to private equity fund administrators and their clients, driving an environment of enhanced productivity, accuracy, and strategic expansion.

Emphasizing Automation in Manual Processes: Gen II leverages Canoe to automate time-intensive manual alternative investment processes. This shift allows institutional investors, asset servicers, capital allocators, and wealth managers to refocus on core activities and strategic growth.

Boosting Operational Efficiency & Scale: Canoe empowers Gen II with operational scalability and business optimization. It facilitates efficient scaling of data entry processes, which is vital for detailed portfolio analysis and future growth preparation.

Advancing Data Management Capabilities: With Canoe, Gen II effectively manages large volumes of documents and data. This capability is crucial for timely, accurate, and scalable client reporting, offering efficiencies beyond traditional outsourcing.

Enhancing Data Access & Accuracy: Canoe ensures prompt and precise data access, a critical need for institutional investors and capital allocators dealing with vast alternative investment documents and data.

Optimizing Resource Allocation & Cost Efficiency: Gen II uses Canoe to automate analysis and reporting processes for capital allocators. This leads to better resource allocation and cost efficiency, allowing a refocus on business performance and growth.

Through this integration with Canoe, Gen II advances its commitment to technological innovation, offering a comprehensive solution that enhances data management processes in private equity. This partnership is a strategic move towards increased operational efficiency and data accuracy, essential in today’s competitive market.