Historically, appetite for investment in accountancy firms has been largely limited due to regulatory restrictions, business model constraints, and scalability challenges. However, this is changing. In the US private equity (PE) investment in audit and accountancy firms has grown significantly in the last decade; it is estimated that PE firms now have stakes in 10 of the 30 largest accountancy firms by revenue.

The consensus is that accounting’s wave of consolidation fuelled by PE funding has now migrated to the UK. This has been showcased by several high profile deals, such as Grant Thornton and Cinven, and Evelyn Partners and Apax Fund.

Another example of this trend is illustrated by our recent involvement in an interesting PE exit deal at Dains Accountants, an SME accounting and business advisory specialist, employing 765 people, which was acquired by European PE firm, IK Partners.