Half of accountants consider private equity route

Half of accountants consider private equity route

By Simon Read, Owner of www.accountantsforsale.co.uk

Mid-tier firms need to pay attention as private equity investors target low hanging fruit, selling the opportunity to scale fast but finding the right partner is crucial, explains Simon Read, managing director of Accountants for Sale

The UK accountancy sector has been undergoing a seismic shift for a number of years now. Private equity, once the preserve of the very largest firms, is now turning its attention to mid-tier practices with serious ambitions for growth. Recent research reveals that almost half of UK accountancy firms are open to private equity investment, while an astonishing 86% have already been approached by external investors in 2024.

For mid-tier firms, this is no longer a distant possibility. It is a live conversation happening in boardrooms today, and one that partners can ill afford to ignore.

Why private equity is targeting mid-tier firms

The motivations behind this surge in investor interest are clear. Mid-tier firms often combine a strong regional presence with loyal client bases and an agility that larger firms can struggle to match.

Investors see significant opportunity in backing practices that with the right capital can modernise rapidly, expand into new markets, strengthen their service offering, or even pursue acquisition-led growth strategies.

For many firms, private equity also provides a timely solution to succession planning and partner retirement, areas that traditional partner capital or risk-averse bank lending cannot always address.

In short, private equity offers ambitious firms access not only to funding but to the expertise needed to scale fast.

Opportunities and challenges

Of course, the benefits of private equity must be weighed against some important considerations. Any firm taking on external investment will need to carefully assess how much control it is prepared to share over operational and strategic decisions.

Regulatory compliance in areas such as audit or probate licensing adds another layer of complexity to deal structures. Just as crucial is cultural alignment: the goals of the investor must sit comfortably alongside the values and long-term vision of the firm.

That said, the right private equity partner can bring far more than money to the table. They can offer deep sector expertise, experience in executing acquisitions, and a strategic clarity that accelerates transformation.

Timing issues

Timing is critical. Private equity activity in the accountancy sector has not yet peaked, but the level of interest in mid-tier firms is already intense. Investors are actively seeking out practices with strong growth potential in underserved regions, niche specialisms, ambitious leadership teams, and a clear appetite for transformation.

Competition is driving valuations higher, but this surge of activity will not last forever. The most attractive deals are being struck now, while demand is at its strongest.

Preparing to engage

For firms that are considering private equity, preparation is everything. Partners must first clarify their objectives: is the aim to raise capital for expansion, to prepare for a future exit, or perhaps to achieve both?

Understanding the firm’s value – its financial performance, client mix, and growth potential – will determine how it is positioned in negotiations. Investors are drawn to practices that can demonstrate solid revenue and profit growth, a scalable business model, and a capable leadership team.

Equally important is the choice of partner. Not all investors are alike, and the wrong fit can derail long-term goals. Firms should seek out investors with a proven track record in the accountancy sector, supported by experienced M&A advisors and specialist legal counsel who understand the nuances of private equity.

Negotiations can be lengthy and complex, and having the right guidance at every step is essential. Protective terms, aligned milestones, and robust systems and talent strategies are all part of ensuring the deal delivers sustainable value.

This is where specialist guidance can make the difference between success and regret. Navigating private equity investment requires preparation, connections, and skilled negotiators who understand both the sector and the investor landscape.

The right advisor can position a firm effectively, identify the most suitable investors, and manage negotiations discreetly while keeping the process firmly aligned with long-term strategic goals.

Mid-tier accountancy firms are perfectly placed to take advantage of a wave of private equity interest that is reshaping the profession. Those who act now by preparing, positioning, and engaging with the right partners stand to gain not just access to capital, but the strategic leverage to play at a higher level.

About the author

Simon Read is managing director of Accountants for Sale