What do accountancy firms stand to gain from IPOs?

MHA is the latest accountancy firm to announce plans to list on AIM, targeting a £269m share placing in its Initial Public Offering (IPO), which could happen as soon as this week. While MHA isn’t the first firm to take this step – and won’t be the last – the move is notable given how few accountancy firms have chosen to go public. That’s not to say that external investment in the sector is new. Firms like Grant Thornton, Cooper Parry, and Dains have recently sold stakes to private equity, according to a Times article from December 2024. Others, such as Sumer and Evelyn Partners, have also attracted significant backing. While PE has long been the preferred route, IPOs may now represent the next frontier in this broader shift toward external ownership. For many, private equity and public listings are two sides of the same coin: vehicles to raise capital fast, fuel growth, and stay competitive in a consolidating market. But both paths are transformative – and come with risks. When MHA announced its intention to list, the firm said the IPO would strengthen its market position, boost its profile, and help attract talent. Clearly, there’s a lot to gain. But is listing the best route – or just the most lucrative in the short term? Many firms are eager to scale fast by acquiring regional practices, investing in AI, and expanding services. But that ambition costs money. Jessica Middleton, the founder and CEO of South Wales-based Middleton PA Services, urges caution. “I have to be honest, I’ve got mixed feelings about accountancy firms going public,” she says. “On paper, it might look like a bold growth move, but when you dig into what that really means for the profession – it gets murky.” Many firms are eager to scale fast by acquiring regional practices, investing in AI, and expanding services. But that ambition costs money. Corrine Staves, partner at law firm CM Murry who advises on all aspects of partnerships, LLPs and professional practices law, says external investment can be an attractive option for firms that don’t want to rely solely on partner contributions. “If you’ve got big ambitions [as a firm] – want to do more for clients, scale up, transform – then you do need a big pot of cash. And [an IPO] is one way to get it,” Staves says. “Otherwise, you’re asking partners to put in their own money, and many are not comfortable with that.” But the money comes at a cost. Public markets bring new pressures: governance shifts, transparency requirements, and investor demands. And yes, senior stakeholders often benefit financially. “If I’m being cynical about these things, you could say that the windfall is a great appeal for decision-makers,” Staves adds. “I’m sure people are thinking long and hard before they make such a big move – listing is no small thing. But short-term personal benefit might be influencing some decisions, and that’s worth noting.” While Middleton echoes similar concerns, she also sees deeper risks in such a deal: “The move from partnership to PLC changes everything – governance, culture, even how partners are incentivised. It can create a real disconnect between the professional identity of the firm and the commercial demands of the market.” The traditional partnership model – where profits are shared internally and growth is slow and organic – may be shifting. External capital was once seen as a last resort, but attitudes have evolved. While IPOs grab headlines, private equity has become the dominant force behind the scenes. Staves describes “a huge amount of chat” in the sector, with many firms weighing the benefits of fast capital and strategic backers. “Private equity is desperate to invest in the accountancy sector right now,” she says. And it’s clearly happening. Staves shares: “Mark Wade, who leads the professional practices team at RSM said that, of the top 40 accountancy firms 10 years ago, only three of them were backed by private equity. Now it’s 17. That’s nearly half – a substantial increase.” The traditional partnership model – where profits are shared internally and growth is slow and organic – may be shifting. External capital was once seen as a last resort, but attitudes have evolved. Still, PE deals come with strings. “PE needs an equity exit after three to five years (for professional services: four to eight),” Staves says. “That will lead to IPOs eventually.” That ticking clock means firms often face a final, public destination. Staves explains, “You sell up 10%, that’s round one, then the other one, and then the other one. But that can't go on forever, because the deals will get bigger and bigger. And if you start with a firm like Grant Thornton, which has obviously accepted private equity quite recently — that's already huge. Finding the sort of secondary buyer in that deal is massive.” Which raises the question: where does that road end? “The answer is probably a listing, isn’t it?” Staves says. “So I think we probably will [see more IPOs], but not yet.” While IPOs offer firms the promise of growth, visibility and investment that they crave, these deals are far from a guaranteed win — and the accountancy sector has been down this road before. Staves aptly puts it like this: “Not all accountancy firms are listed – and if it had worked really well, we’d probably see more of them listed by now.” Speaking as the founder of an accountancy firm, Middleton says that the industry has always been built on trust, integrity, and long-term relationships. Ultimately, that raises the deeper question: not just “can we do this?” but “why are we doing this?” and what does it mean for the people inside these firms? The answer depends, Staves says, on whether the business succeeds. “If you actually achieve the model that these sorts of structures rely on, then there's enough to go around. Everybody's very happy,” she explains. “You've got these shares that are growing in value because it's been incredibly successful – which you wouldn't have had as a partner [in a traditional model].” In theory, everybody wins. The firm grows. Staff are resourced. Shareholders are paid, and junior employees might even get equity – a rarity in LLP structures. “It’s exciting. It’s driving, it’s growing. That’s where people want to go. Good, strong, ambitious people go there because they think it’s good,” Staves says. But, she notes, success is not guaranteed. “If the growth isn’t there, if the profits aren’t there, that pot is, by definition, smaller,” she says. And that can create discontent – particularly for younger partners who weren’t there for the initial payout. Staves continues: “You might see a situation where the original partners get a cheque on day one – some stay, some leave – and the next generation of partners has to spend their entire career splitting profits with external shareholders. Meanwhile, the previous generation never had to do that. That changes the whole proposition. Why would you want to be a partner in that kind of setup? Why not just join a firm that’s still fully owned by its partners?” Speaking as the founder of an accountancy firm, Middleton says that the industry has always been built on trust, integrity, and long-term relationships. However, she voices some concerns: “When you bring in public shareholders, you introduce a whole new layer of pressure – performance targets, short-term returns, external expectations. And I can’t help but ask: at what point do shareholder interests start to outweigh client care or compliance standards?” If the balance is struck, clients may benefit. But if not, they may feel sidelined in favour of shareholders. In this way, listing can unintentionally create a two-tier system: those who reaped the initial rewards versus those who inherit the altered economics – but not the payout. And then there’s the client question. Does a new ownership model improve client service, or complicate it? Staves’ answer is, yet again, nuanced. On one hand, external investment can scale services and technology in ways that benefit clients. On the other, the pressure to deliver year-on-year growth can alter how firms operate. Staves says: “People are suddenly faced with a much more targets-driven, much more aggressive environment than perhaps they were used to.” That can affect the culture within firms, and the service received by clients. “You also hear stories about people thinking, ‘Well, let's drive the work down to the cheapest people and then not have a slice of expensive people in the middle,’” Staves says. “Clients are sometimes reluctant to see that change.” If the balance is struck, clients may benefit. But if not, they may feel sidelined in favour of shareholders. So, while MHA’s move might not start a new wave of IPOs in the industry, the door is clearly open – especially with private equity so active. Middleton offers a final word of warning, saying: “Could it set a trend? Possibly. But whether that’s a good thing or not is still up for debate. If more firms follow suit, we might see a shift in the soul of the profession – and I’m not sure that’s something to celebrate.” “For any firm thinking about an IPO, the key isn’t just legal or financial readiness,” she adds. “It’s asking the deeper questions: What do we stand for? What are we willing to compromise on? And who do we really want to serve?”