Nearly half of UK accounting practices are considering external investment, according to a new survey by law firm Kingsley Napley.
Private Equity Interest on the Rise
Of the 22 firms surveyed—drawn from the top 60 UK accounting businesses—27% have already secured private equity funding, while another 19% would contemplate it in the future. Overall, 46% of respondents indicated openness to such investment, and a striking 86% reported receiving approaches from private equity houses or other external investors during 2024. By contrast, 54% said they have no plans to seek private equity either now or down the line.
Julie Matheson, Partner and head of Accounting Regulatory at Kingsley Napley, noted:
“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.”
Drivers and Deterrents
Technology investment emerged as the chief attraction for those firms open to private equity. John Young, Partner in Kingsley Napley’s Corporate, Commercial & Finance team, explained:
“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.”
Other cited benefits included funding for geographical expansion and succession planning.
However, some partners fear losing strategic or operational control, diluting their firm’s identity, or facing higher staff turnover under a private equity model. Externally, concerns centre on potential client loss, conflicts of interest, and heightened regulatory scrutiny.
Young added:
“Older partnerships tend to be the most favourably disposed to private equity investment, whereas younger partners may have different priorities and be wary of a remuneration model where the future earn out is more difficult to predict.”
Matheson emphasised that regulatory hurdles, while significant, are manageable:
“Several examples exist of where firms have successfully managed regulatory requirements and embedded a new management structure and governance model in a compliant manner.”
Matching Partners for Success
Kingsley Napley’s white paper warns that, just as private equity houses have varied investment strategies, accounting partnerships hold diverse priorities and concerns. Young stressed the importance of early alignment:
“It is important for each party to be very clear with each other up‑front about their drivers, motives and concerns so as to help maximise the chance of a good‑fit deal and to avoid discussions being aborted, with the wasted time and cost implications that can involve for both sides.”
Matheson concluded:
“Without doubt private equity is reshaping the accounting sector… Our survey shows many accounting firm leaders see the benefits and believe this funding option is here to stay. It will be very interesting to see how the market develops from here.”
