Half of UK accountancy firms open to private equity

Nearly half of the UK’s leading accountancy firms are open to private equity investment, according to new research by law firm Kingsley Napley,  underlining a growing appetite for external capital in a traditionally partnership-led sector.

The survey, conducted in May 2025, canvassed senior leaders from 22 of the UK’s top 60 accountancy firms. It found that 27% of respondents had already accepted private equity funding, while a further 19% would consider doing so in future. Only 54% said they had no current or future interest in this type of investment.

According to the report, the results reflect a period of heightened interest from private equity houses in the UK accounting profession. Eighty-six percent of firms surveyed reported being approached by external investors in 2024 alone.

Julie Matheson, partner and head of accounting regulatory at Kingsley Napley, said the findings highlight both the opportunity and unease surrounding private equity involvement in the sector.

“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,” she said.

“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.”

Technology investment a key driver

Among firms open to investment, the most commonly cited motivation was the desire to fund technology upgrades.

“The popular view of why accounting firms are welcoming private equity investment is that a major injection of funds to make a step-change difference in tech will help to future-proof practices,” said John Young, partner in Kingsley Napley’s Corporate, Commercial & Finance team. “Our survey results concur with this.”

Other frequently cited drivers included accessing capital for geographic expansion and enabling succession planning.

Regulatory and cultural concerns remain

Despite the growing interest, the findings also revealed considerable hesitancy, particularly around issues of control and compliance.

Internal concerns included the risk of losing strategic or operational autonomy, the dilution of firm identity, and potential partner retention challenges. Younger partners, in particular, were said to be more cautious about earnings uncertainty under new ownership models.

“In our experience older partnerships tend to be the most favourably disposed to private equity investment,” said Young, “whereas younger partners may have different priorities and be wary of a remuneration model where the future earn out is more difficult to predict.”

Externally, respondents pointed to the risk of client loss, potential conflicts of interest, and fears that external capital could trigger increased scrutiny from regulators.

Matheson acknowledged these regulatory concerns but stressed that they are manageable within existing frameworks.

“There are strict rules to protect the independence of audit functions and also prescribed requirements for probate and other licences,” she said. “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 capital with culture

One of the report’s broader conclusions is that mutual understanding is crucial to any successful deal.

“It is important for each party to be very clear with each other up-front about their drivers, motives and concerns,” said Young. “That helps maximise the chance of a good fit deal and avoids discussions being aborted, with the wasted time and cost implications that can involve for both sides.”

Matheson added that the role of private equity is unlikely to diminish anytime soon.

“Private equity is reshaping the accounting sector, not just at the larger firm end but in the mid-market and smaller firm market too,” she said. “Our survey shows many accounting firm leaders see the benefits and believe this funding option is here to stay.”