At a glance:
- Private equity investment is rapidly changing the global accounting sector’s ownership structure.
- It funds growth, technology adoption, and provides succession options for firm partners.
- The trend brings growth opportunities but also raises ethical and cultural concerns.
A surge in private equity investment is starting to change the face of the global accounting sector, and shows no signs of stopping.
The United States has led the way. But more and more accounting firms in markets such as the United Kingdom, Europe and Australia are accepting private equity-backed deals as they seek to fund growth, navigate a technology revolution and address succession challenges. A profession once built on partner-owned firms is increasingly embracing corporate patterns.
Essex accountants Ian Hornsey FFA FAIA and Ermal Krutani FFA FAIA are well acquainted with the trend. Both ambassadors of the IFA, they for decades ran Devonports LAS Accountants with colleague Tim Howard. The firm had offices in Southend-on-Sea and Maldon. In 2024, after receiving three other offers, they opted to join private equity-backed Xeinadin, a top-20 accountancy and business advisory entity in the UK and Ireland. Xeinadin Group is structured as a company; it was formed by the merger of over 100 small to medium-sized accountancy practices.
Krutani says he and Hornsey had seen the direction of the accounting sector and wanted to be “early movers”. They wanted to draw on the power of private capital and expertise to maximise growth and access the latest technology in an era of AI. “We decided to get embedded in a bigger practice so we had more resources and bigger opportunities,” Krutani says.
Hornsey, a board member of the IFA and chair of the IFA Council, adds that the Devonports deal underlines the value of IFA firms and their appeal to private equity firms. “It’s a very positive message for our members.”
Structural shift
Private-equity investment typically targets successful, privately held businesses with strong histories and cash flow. The investors aim to enhance value over a set period before exiting through a sale or public listing.
Typical models for investment are:
- growth capital – funding aimed at supporting organic expansion, such as digital transformation, or developing new services;
- consolidation strategies – buying small or mid-sized firms to form larger platforms; and
- management buyouts, where existing management teams acquire the firm using private equity backing.
In the past decade, accounting has emerged as a new frontier, with private equity firms aggressively acquiring stakes in mid-tier and large accounting networks in particular. The UK has in recent years witnessed a string of high-profile private equity accounting firm deals, including Azets (backed by HG Capital and PAI Partners), Moore Kingston Smith (Waterland) and Xeinadin (Exponent).
The latest analysis from Accountancy Europe also notes significant growth in private investment in theEuropean accountancy sector from 2015 to 2025. Activity was “limited” from 2015 to 2020, with annual transactions ranging from 10 to 20. But in 2023 transactions topped 100, almost triple the 2022 figure. And 2024 saw about 200 transactions. (2025 figures are not yet available.)
August 2021 is widely regarded as a watershed moment for the private equity accounting movement. This was the month when TowerBrook Capital Partners – an investment management firm headquartered in London and New York – announced its investment in EisnerAmper, a major global accounting and tax firm.
Then in 2024, Grant Thornton and Baker Tilly – both global top-10 accounting firms by revenue – also secured private-equity backing. Those deals confirmed that large-scale private equity investment in accounting businesses was genuinely attractive to investors. In closing the sale of a stake to a group led by New Mountain Capital, The Wall Street Journal reported that Grant Thornton had become the biggest accounting firm to sell a slice of itself to private equity investors.
Conway: Private equity has arrived
Speaking in Australia at the IPA National Congress 2025 late last year, IPA Group CEO Andrew Conway FIPA noted that the accounting profession is experiencing dramatic changes in areas such as tax reform and anti-money laundering regulation, with AI transformation on the horizon.
Given such an environment, Conway says, firms must consider their growth and operational options – including the role of private equity. The rise of private equity in the accounting profession is now occurring at “a staggering pace”, he says. And he points out that this is not just a big-end-of-town phenomenon.
“The vast majority of these transactions are taking place at … small and medium practice level,” Conway says. “So be aware … that it’s coming. Be thinking about it before you get a knock on the door. And [consider] ‘what’s in it for me?’ and ‘what do I want out of this?’”
“We decided to get embedded in a bigger practice so we had more resources and bigger opportunities.”
Ermal Krutani
The appeal of accounting firms
Private equity’s enthusiasm for accounting firms is driven by several factors.
- The industry is largely recession-resistant, which creates stable, predictable and recurring revenue streams.
- The market remains highly fragmented. Thousands of small and mid-sized firms operate independently, providing obvious opportunities for consolidation.
- Accounting is ripe for tech adoption. The rapid emergence of AI, automation and cloud-based platforms requires substantial capital investment that traditional partnerships may not be able to deliver.
- Succession challenges play a role. Many accounting firms face ageing partner groups with limited internal succession options. Private equity transactions can offer senior partners a partial or full cash-out while ensuring a firm continues to grow.
Hornsey and Krutani acknowledge that being rewarded for their hard work and securing an exit was part of the appeal of accepting the Xeinadin offer.
“We’re in business and, for Ermal and myself, we’ve put a lot of hard work and hours into the business and it a way of having an exit strategy for us,” Hornsey says. “But it’s also about the growth opportunities for the firm.”
With anti-money laundering obligations and Making Tax Digital both expanding, accounting firms face an ever-growing compliance burden. That was a key factor in Devonports’ decision to join Xeinadin. So was the pressure to invest in new AI and software platforms.
“That can be daunting for a smaller firm,” Krutani says. “But now we have the buying power through Xeinadin to get such technology at a much better price.”
Xeinadin CEO Derry Crowley says he believes that buying Devonports will “bring us closer to being an advisor and overall result in a better service for clients.”
Just as accountants tell their clients to take calculated risks if they want to succeed and thrive, Krutani says firms must be similarly willing to consider growth opportunities.
“A lot of accountants are risk-averse,” he says. “So my message would be for IFA members to always be prepared to take a bit more risk when it comes to these sorts of growth scenarios. You always need to have an exit plan, to know the value you have created and how to realise it, and to know what your plan is for the future.”
Risks and concerns
Of course, the rise of private equity ownership has not been without its critics. Despite the list of benefits, some firms are wary of doing deals. They worry about cultural impacts, short-term return-on-investment pressure, and possible client service implications.
The International Ethics Standards Board for Accountants (IESBA) has warned of “possible ethical and independence implications arising from private equity investment in accounting firms”. The board emphasises the importance of firms “maintaining ongoing monitoring for changes in clients, services, business and network relationships, and other relevant factors with potential ethics and independence implications, both during the pre-investment phase and after completion of the private equity transaction”.
Cultural integration is another potential challenge. Corporate structures can replace consensus-based partnership models with a top-down management approach. Senior accountants and partners who are accustomed to having a direct voice in firm governance may feel sidelined. And regulatory complexity also increases, especially around audit independence and conflicts of interest.
Hornsey acknowledges such concerns, noting that potential partners must do their due diligence to ensure they are the right fit with any partner. As someone who has always been his own boss, he says it has been a “learning curve” to have to factor in the views of new colleagues. “(But) the good thing with Xeinadin is that we are left to get on with the job. And what the client sees and experiences, apart from the firm’s name change, stays the same.”
What comes next?
Despite recent global economic headwinds, the private-equity trend still seems to have room to run. The Financial Times has projected that up to one-third of America’s top 30 CPA firms “could soon be in private equity hands”, with similar dynamics likely to play out in other countries.
What is clear is that private equity is no longer a niche presence in accounting. It is becoming a defining force in accounting’s ownership structures, investment priorities and the future trajectory of the profession.
Rather than baulk at the changes, the IPA’s Conway encourages accounting firms to ask relevant questions and prepare for the private equity surge. What impact will it have on regulatory frameworks? How will an international private-equity entity be regulated after it invests in a firm? Who is the principal in such cases, and who effectively controls the firm? Do those principals have the appropriate skills and qualifications to hold that status? And how is all this regulated while intersecting with the relevant codes of ethics?
“Thinking about private equity as a significant trend taking place, from a growth mindset perspective, I think, is really important,” Conway told the IPA National Congress. “So are you thinking about these trends?”
The private equity phenomenon is not to be feared; rather, it requires accountants to think, plan and prepare. Says Conway: “I think there’s many more upsides than downsides when it comes to those growth opportunities and the private equity opportunities that are taking place.”
For Hornsey, an industry veteran, the timing of Davenports’ deal with Xeinadin has been perfect. And he has no doubt that private equity offers the founders of many small and medium-sized firms an attractive exit strategy that also empowers firms.
“As the world changes with AI and digitalisation, this is about the future.”
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