A survey by Kingsley Napley indicates that 46% of UK accounting companies are open to private equity investment.  

Of the 22 respondents from the top 60 UK accounting practices, 27% have already received private equity funding, while 19% are considering it in the future.  

The survey highlights the growing interest in private equity within the sector. 

A total of 86% of the respondents reported receiving approaches from private equity houses or other external investors in 2024.  

Meanwhile, 54% of respondents expressed no interest in private equity investment, either currently or in the future.  

It highlights a divided stance within the industry regarding private equity involvement, the UK-based law company said.  

Kingsley Napley partner specialising in accounting regulatory Julie Matheson 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.”    

Kingsley Napley explored attitudes towards private equity investment due to the increasing interest from private equity funds in the UK accounting sector.  

The London company said it has been actively involved in related transactions, assisting parties with transactional documentation, legal due diligence and regulatory steps. 

The primary attraction of private equity investment, as cited by respondents, is the opportunity to invest in new technology.  

Additional advantages include funding for geographical expansion and succession planning.  

However, concerns about loss of strategic or operational control, identity and partner retention were noted as internal fears. 

External risk factors identified by respondents included the potential loss of clients, conflicts of interest, and concerns about regulatory compliance and increased regulatory attention.  

Kingsley Napley’s survey white paper highlights the need for accounting practices and private equity houses to find the right match, considering their differing strategies, objectives and priorities. 

Matheson concluded: “Without doubt private equity is reshaping the accounting sector, not just at the larger firm end but in the mid-market and smaller firm market too. Our survey shows many accounting firm leaders see the benefits and believe this funding option is here to stay.  

“It also suggests we are not yet at the peak of the deal curve. It will be very interesting to see how the market develops from here – how firms which choose to embrace private equity capital evolve and how those who decide to differentiate themselves by a traditional funding model respond on the other hand.”