Moulton slams cowardly accountants
Moulton says firms have become too scared to offer meaningful opinions on deals, and are hiding behind disclaimers and boilerplate statements
Jon Moulton, one of the most influential personalities in private equity, has
issued a harsh critique of the corporate finance work done by accounting firms,
accusing them of shying away from their brief.
Accountants have been among the main beneficiaries of the boom in private
equity activity and stock market floats, but Moulton said firms had become too
scared to offer meaningful opinions on deals, and were hiding behind disclaimers
and boilerplate statements.
‘Accountants now disclaim everything, validate little and waste a lot of time
on engagement letters. It is a great shame because their opinions are valuable,’
Moulton said in a speech at the ICAEW corporate finance faculty annual dinner.
The founder of Alchemy Partners, who has completed more than 100 transactions
worth £1.25bn with the partnership, also warned that the liquid debt markets
that have supported the high level of private equity transactions were on the
brink of collapse.
‘The leveraged debt markets are very extended. A collapse, driven by the
fragile market players, such as the hedge funds, is likely,’ he said.
He added that the growing burden of regulation was placing dealmakers under
increasing pressure.