Stone Point Capital LLC is poised to back a key Midwestern ally to fundsters, even as the target's current private equity backer stays on, too.

Gary Tenkman Ultimus Fund Solutions CEO

Last week (on April 23), Collin Roche, co-CEO and managing director at GTCR, and Jim Carey, co-CEO of Stone Point, revealed that Greenwich, Connecticut-based Stone Point (which already backs a big 401(k) recordkeeper) has agreed to invest in Cincinnati-based Ultimus Fund Solutions alongside Chicago-based GTCR. GTCR Fund XIV will also invest in Ultimus, while GTCR Fund XII will exit, leaving GTCR and Stone Point in joint, equal control of Ultimus.

Pricing and terms of the deal have not been disclosed. The deal is expected to close in the fourth quarter of this year.

Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC advised Ultimus on the deal. Ardea Partners LP and Broadhaven Capital Partners advised GTCR, while Latham & Watkins LLP provider GTCR with legal counsel. Simpson Thacher & Bartlett LLP provider legal counsel to Stone Point, while Paul, Weiss, Rifkind, Wharton & Garrison LLP provided debt financing counsel.

Ultimus is a fund administration provider with a team of about 1,200 people, a spokesperson for Ultimus confirms, and they serve more than 450 clients and more than 2,100 funds with more than $600 billion in assets. The spokesperson notes that those funds include about 925 private funds, about 700 "complex funds," and about 475 traditional funds.

Roche lauds Ultimus as "the preferred partner for fund managers across asset classes and vehicle structures looking for a high quality, independent provider with excellent technology and service quality."

"We look forward to partnering with the well-recognized financial services specialists at Stone Point and continuing to work with Gary Tenkman and the Ultimus management team to execute on the Company's next phase of growth," Roche states. "We believe there is significant opportunity to further scale the business through strategic acquisitions and additional organic initiatives, including capitalizing on our unique ability to serve the rapidly growing retail alternatives market."

Carey applauds Ultimus CEO Gary Tenkman and his team for building "an exceptional business with a strong track record of growth."

"Ultimus is well positioned to capitalize on the increasing demand for fund administration services, particularly in complex, high growth areas such as retail alternatives, where we believe the Company's expertise and capabilities are unmatched," Carey states. "We look forward to supporting Ultimus's continued success."

Michael Hollander, managing director at GTCR, puts the Stone Point deal and GTCR's continued backing of Ultimus in the context of the asset management industry's "period of rapid innovation and expansion, especially within private markets, alternatives, and active ETFs."

"At the same time, managers are constantly seeking ways to improve investor experience with best-in-class operational infrastructure, while enhancing efficiency," Hollander states. "Ultimus's unique platform and technology stack, coupled with its experienced team and commitment to client service, enable the Company to address all these needs for asset managers, including private equity, private credit and retail alternative fund administration."

Tenkman highlights the "years of dedication and hard work by the entire Ultimus team."

"With the support of both Stone Point and GTCR, Ultimus is uniquely positioned to further accelerate our growth trajectory while continuing to deliver industry-leading capabilities and tailored solutions to our clients," Tenkman states. "I am confident that this partnership will enable us to further enhance our offerings and solidify our position as the premier fund administration provider across both public and private markets."

News of the Stone Point-GTCR-Ultimus deal comes about five years after GTCR acquired both Ultimus and the Gemini Companies and combined them together. At the time, the combined firms had more than 500 employees serving more than 840 funds with more than $150 billion in assets. 

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