BusinessCorporate FinanceBig Four face staff exodus

Big Four face staff exodus

The withdrawal of the Big Four from regional corporate finance work has created a vacuum which mid-tier firms are keen to fill.

But this has not prevented them from muscling in on individual deals – last week Accountancy Age reported how one big player had undercut the fees of a mid-tier firm by 50%.

Until recently, Big Four corporate finance practices wouldn’t look at deals with fees less than £250,000, but now relatively minor deals, with a fee of around £100,00 are attractive.

But these still tend to be the exception rather than the rule, and there is a growing trend of Big Four staff moving to the mid-tier firms.

‘Weåre very busy,’ said Stephen Bourne, national head of corporate finance at BDO Stoy Hayward. ‘Headcount is up, and the withdrawal and retrenchment of the Big Four has opened up new opportunities.’

Ian Smart, managing partner of corporate finance at Grant Thornton, said: ‘There’s a slight but increasing trend for buyers of corporate finance services to feel less bound to their audit providers, and they’re feeling increasingly happy about exploring beyond the Big Four.’

Mark Lister, Leeds-based corporate finance partner with PKF, believes the minimum fee structure of the Big Four has ruled larger firms out of the running for many regional deals.

‘There’s a trend towards more realism in pricing incoming deals which the Big Four can’t, or won’t, support,’ he explained. ‘In any case there’s been an exodus of expertise from the large firms towards the middle tier which means they don’t have many resources left with which to compete.’

Ewan Grant, Edinburgh-based corporate finance partner with Baker Tilly, confirmed that the UK’s corporate finance market was being redefined, with a credible second force emerging behind the Big Four.

‘The Big Four have chosen to service a global market which is, of course, their choice, but it means that buyers are increasingly inviting mid-tier firms to take on work which would previously have been the exclusive preserve of the global firms.’

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