Private equity’s deepening influence on accounting firms is prompting a new wave of IPO discussions, as more players seek alternative funding paths and long-term strategic flexibility.

The shift follows MHA’s $98m listing on London’s AIM exchange, the first by a UK accounting firm in over a decade. Instead of selling out to private equity like peers Grant Thornton UK and Evelyn Partners, MHA opted for a minority stake sale, retaining control and leveraging its stock to fund acquisitions in Cyprus and Greece.

MHA CEO Rakesh Shaunak said the IPO route allows firms to escape the “singular pressure” of earnings-driven private equity ownership. “We didn’t want to be totally motivated by EBITDA,” he told the Financial Times. The listing, he argued, offers greater autonomy and a broader investor base.

That message is resonating across the sector. Julian Morse, Co-CEO of Cavendish – the bank advising MHA – said the deal has shifted market perception, with other firms “actively considering the possibility of an IPO as a credible alternative to PE investment.”

In the US, private equity now owns stakes in more than half of the country’s mid-market firms. Blackstone’s recent acquisition of Citrin Cooperman from New Mountain Capital marked the first PE-to-PE exit in the sector. Hellman & Friedman, the backer of Baker Tilly US, also sees public markets as the most likely exit route after expanding through its acquisition of Moss Adams.

Still, some firms remain unconvinced. Rob Donaldson, CEO of RSM UK, which absorbed the bankrupt RSM Tenon in 2013, said, “In the long term, it might be that the partnership model wins out.”

Regulatory scrutiny over non-traditional ownership is intensifying. The Institute of Chartered Accountants of Scotland recently called for an urgent review of who can own audit firms, warning of “undue influence” driven by commercial pressures.

Whether IPOs will prove more sustainable this time around remains to be seen. But as valuations grow and private equity exit strategies evolve, capital markets are once again opening up for the accountancy profession.

Source: Financial Times

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