Nearly half of UK accountancy firms open to PE deals, survey finds

Nearly half of UK accounting firms are open to private equity investment, according to a survey by law firm Kingsley Napley.

Of the 22 respondents from the top 60 UK accounting firms surveyed in May, 27% said they had already secured private equity funding, while a further 19% indicated they would consider it in future. Just over half – 54% – said they were not interested in private equity investment now or in the future.

The survey also found that 86% of respondents had received approaches from private equity firms or other external investors during 2024.

Kingsley Napley, which has advised on several recent transactions, commissioned the survey to examine attitudes towards private equity amid what it described as “hot” interest in the UK accounting sector.

Julie Matheson, partner specialising in accounting regulatory matters at Kingsley Napley, said: “Our survey confirmed that UK accounting practices are aware of the various benefits private equity investment can bring but also wary of the risks, particularly in relation to regulatory compliance. It shows the potential for private equity in the sector, yet it also identifies where further education and confidence building is required to make decision makers comfortable with this new funding model.”

The most frequently cited attraction of private equity investment was the ability to invest in new technology. Other perceived benefits included funding for geographical expansion and succession planning.

John Young, partner in the corporate, commercial and finance team at Kingsley Napley, added: “The popular view of why accounting firms are welcoming private equity investment is that a major injection of funds to make a step-change difference in tech will help to future-proof practices, without having to rely on raising partner capital or obtaining loans or overdrafts from a bank for such. And our survey results concur with this.”

Respondents also highlighted internal risks such as loss of strategic or operational control, loss of identity and difficulties in partner retention. External risks cited included the potential loss of clients, conflicts of interest, and regulatory challenges.

Kingsley Napley said the survey highlighted the importance of finding the right fit between investors and firms, given the diversity of strategies, concerns and priorities on both sides.