At a glance:
- Private equity investment in global accounting firms has been surging.
- Firms seek capital for growth, technology upgrades, and succession planning.
- Investors are attracted by stable revenues and a fragmented market.
- A recent failed UK deal raises questions about the trend’s future.
A surge in private equity investment has been changing the face of the global accounting sector. 2026 is likely to tell us how durable it can be.
More and more accounting firms in the United States and other international markets have been accepting private equity-backed deals. The firms have been seeking to fund growth, navigate a technology revolution and address succession challenges. To do it, they have been willing to replace a partner-owned structure with a corporate one.
At the start of February 2026, though, one event has observers asking whether this trend can continue. That event is the failed sale of a private equity-backed firm called 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. As late as December 2025 it was still buying up other firms. Its part-owner, UK buyout group Exponent, was also arranging to sell it for more than £1bn (A$2 billion). Then on 2 February, the Financial Times newspaper reported that Exponent had failed to get takers at that price.
The question now is whether the Xeinadin incident will be a mere blip, or whether it represents a major turn in private equity’s involvement with accounting.
Behind the private equity boom
Speaking at the IPA National Congress in late 2025, Institute of Public Accountants CEO Andrew Conway explained the drivers for accounting firms to sell to private equity investors. He noted that the accounting profession is experiencing dramatic change in areas such as tax reform, anti-money laundering regulation and AI adoption. In such an environment, he said, firms must consider their growth and operational options, including the role of private equity.
Conway noted that the rise of private equity in the accounting profession has been occurring at “a staggering pace”. And he pointed out it has not been just a big-end-of-town phenomenon. “The vast majority of these transactions are taking place at … small and medium practice level,” he reminded his audience.
Private equity-backed acquisitions have been slower to materialise in the Australian market compared with the big three accounting areas – the United States, the United Kingdom and Europe. But if the global trend continues, rather than pausing, Australian accounting seems to have room for further growth in private equity investments.
The 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).
UK accountants Ian Hornsey FFA FAIA and Ermal Krutani FFA FAIA are well acquainted with the trend. For decades they ran Devonports LAS Accountants with colleague Tim Howard. In 2024, after receiving three other offers, they opted to join Xeinadin.
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 Institute of Financial Accountants and chair of the IFA Council, adds that the Devonports deal underlines the value of firms and their appeal to private equity firms. “It’s a very positive message for our members.”
The appeal of accounting firms
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, Grant Thornton had become the biggest accounting firm to sell a slice of itself to private equity investors.
The latest analysis from Accountancy Europe also notes significant growth in private investment in the European 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.)
Australia has been slower to embrace the trend, but momentum is growing. In the past two years, for example:
- Pemba Capital Partners has partnered with Stannards, a Melbourne-based professional services firm offering accounting, taxation, audit and advisory services;
- Count Limited’s equity partner firm, Kidmans Partners, has acquired the client book of Business Accounting Melbourne; and
- Brisbane-based growth capital firm Fortitude Investment Partners has bought a majority stake in ASF Audits, Australia’s largest independent SMSF audit firm.
Why private equity targeted accounting
Private equity’s enthusiasm for accounting firms has been 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.
The appeal for firm owners
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’s a way of having an exit strategy for us,” Hornsey says. “But it’s also about the growth opportunities for the firm.”
UK accounting firms face an ever-growing compliance burden: increasing regulatory reforms, anti-money laundering obligations, and the UK’s Making Tax Digital regime that enters a new phase in April 2026. That was a key factor in Devonports’ decision to join Xeinadin, as was the pressure to invest in new AI and software platforms.”We decided to get embedded in a bigger practice so we had more resources and bigger opportunities.”
“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 … 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.”
“We decided to get embedded in a bigger practice so we had more resources and bigger opportunities.”
Ermal Krutani
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.
Some major Australian firms have expressed scepticism about the merit of private equity partnerships. BDO Australia chief executive partner Tony Schiffmann told the Australian Financial Review in late 2025 that “we don’t see a need for external capital”. And RSM Australia chief executive partner Robert Miano reported that “we’re not contemplating it”.
The International Ethics Standards Board for Accountants (IESBA) has also 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?
Before Xeinadin’s deal fell through, the Financial Times 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. But after Xeinadin said it would delay the sale, the publication said some investors now fear valuations have risen too high. Accountancy Age reported “whispers” in the London deal-making community that investors worried Xeinadin would need to spend a lot of cash “integrating such a fragmented footprint”.
What is clear is that private equity is no longer a niche presence in accounting. It has emerged as a force in accounting’s ownership structures, investment priorities and the future trajectory of the profession.
Andrew Conway has been encouraging accounting firms to ask relevant questions about 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 ultimate extent of the private equity phenomenon is not yet clear. But it does require accountants to think, plan and prepare.
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