AFTER 50 YEARS one of the largest international networks BDO is going from strength to strength with mergers in Vietnam, China, India, the US, UK and Australia. Firmly placed at the helm to develop the organisation’s expansion is Anders Heede.
Having never been an accountant or qualified as one, you’d think taking on the managing partner role or heading the development of an international accountancy network would be outside his area of expertise, but you’d be mistaken.
As CEO of network development and CEO for Europe at BDO International, Heede has come a long way in his seven years with the group.
He initially joined the organisation as managing partner of BDO Denmark which grew from €70m (£60.4m) to €110m (£95m) in three years under his tenure. The growth was such that BDO overtook Big Four firm EY to become the fourth-largest accountancy firm in that region. “They are not called the Big Four everywhere,” Heede muses.
After his impressive performance in Denmark, Heede took on the roles of network development and European CEO nearly two years ago.
According to the Accountancy Age Top 35 Networks, BDO International reported a 6.2% increase on annual total income to just more than $6bn (£3.9bn) in 2013; has expanded into 138 countries, up from 135 a year ago; and has held onto its fifth placed ranking, behind the Big Four.
Heede doesn’t go as far as to say he believes the network will break into the Big Four, but does surmise that there must be consolidation in the market both nationally with firms and internationally with networks.
“We will see a profession that will adapt to challenges and we’ll have a different composition. Just as we have seen in the Denmark market it will do the same in the international network,” he says. “Just looking at the mid-market networks there is a clear need for consolidation.”
However, in the longer term, Heede expects to “only see about two to three mid-tier networks across the industry”.
“There is surplus capacity so consolidation is ripe at the moment”, Heede says, though he doesn’t think it “makes sense to have that many smaller international networks”.
He could be on the road to realising that ambition. During Heede’s tenure the firm has been active in the acquisition market. Earlier this year it obtained Dutch organisation HLB Schippers which has four firms and 170 staff, while in June it admitted Ethiopian firm Next Consult, now to trade as BDO, which has maintained a 15% annual growth rate over five years.
Heede also picked up a slew of acquisition from America where the network admitted more than 250 staff, including 24 partners from three different firms. Chief among the mass influx was the largest Alaskan firm Mikunda, Cottrell & Company with more than 100 staff. Minneapolis-based firm Moquist Thorvilson Kaufmann brought with it 60 staff, while banking practice ParenteBeard delivered more than 95 employees and 12 partners on joining the network.
Heedes’ hometown of Brussels saw a new strategic alliance in the form of Zaventem, which had about 20 people, as well as admitting Indian firm MZSK & Associates, an amalgamation of two established firms in Mumbai and Pune. There were also new entrants from Israel, Mongolia, Morocco, Australia, Turkey, Jordan, and Vietnam, in the last 12 months.
The chase for PKF
Chief among BDO International’s acquisitions was its gains from the merger between BDO and PKF in the UK. In the 2012 Accountancy Age Top 50 survey, PKF ranked 12th with a fee income of £103.3m with BDO pulling in £281.5m. In the latest Top 50 results, BDO submitted its 12 months figures which included just three months of PKF’s fee income attached, giving it a grand total of £302.6m. The combined firm will operate out of 24 offices and employ about 300 partners.
The chase for PKF by BDO International has been raging for some time. In November last year BDO International announced a deal with PKF China to join BDO’s Li Xin, which saw about 350 PKF partners and staff join the network, strengthening BDO’s position in Beijing, Shenzhen and Wuhan.
In October 2012 BDO completed a merger with PKF Business Advisers PTY Ltd in Adelaide, Australia, and recruited PKF’s Hanoi firm in Vietnam in the same month. BDO also announced earlier this year that former PKF International’s regional director of Asia Pacific, Stephen Darley would join BDO as CEO of Asia Pacific.
Though it might appear a scattergun approach, there is a method behind the catalogue of firms joining the network, with Heede earmarking the biggest growth in the Asia Pacific region. The region has had about 49% growth and although it accounts for about 15% of overall revenues, he believes that will rocket to about one third in the next few years.
With Darley on the case, Heede hopes to continue announcing mergers and acquisitions in abundance, but when pushed on what captures his attention he confides that people, strong leadership, reach and vision are what he searches for.
“Size matters, profitability matters as well as leadership; they are essentially pre-conditions. However, what really differentiates a practice is the people. Who has the future in front of them and not the best behind them?”
This August the international network turns 50. To celebrate the occasion the network is holding its global conference in Hamburg, the network’s birthplace. It will also be attended by one of the founding fathers, Dr Otter who put the O in BDO. Otter still has close ties with the firm, his son is managing partner at the German firm, and is set to make a speech. However, Heede keeps the rest of the celebratory activities a closely guarded secret, much like which firms he will be chasing next.
Anders Heede CV
2011 – Present: CEO EMEA, global head of network develop and advisory, BDO International
2008 – 2011: CEO, BDO Denmark
2005 – 2008: EVP marketing and development, Tvilum Denmark
2001 – 2005: Senior managing director, Ferrosan Denmark
1996 – 2001: Associate Principal, Mckinsey & Co Scandinavia
1991 – 1996: Business manager, Rockwool International Canada
Internal auditors are earn more than external consulting auditors, analysis by salary-bench marking site Emolument.com has found
BDO has announced two key international appointments as the firm continues to expand in its private client business across the BDO global network
Online accountancy firm, My Accountant Friend (MAF), has opened its latest office in Birmingham and recruited new partner, Richard Ingledew
KPMG has announced the appointment of Sarah Willows as chief financial officer and head of operations