Photo: Pexels (Pixabay)

---

 

Why Private Equity Is Investing

Over the past 18 months, the UK professional services have become an increasingly attractive sector to private equity. With software and technology markets largely consolidated and competition for the remaining quality assets increasing, funds are focusing on lower-multiple, cash-generative sectors such as legal, accountancy, wealth management and insurance advisory [BDO 2025].

 

Professional services combine reoccurring revenue, strong client relationships and room for operational improvement, making them well-suited for platform growth and consolidation strategies. Ultimately, the scalability of these models depends on leadership depth and the ability to attract and retain senior talent capable of leading integration and transformation. Investors are increasingly prioritising leadership capability early in the investment cycle, recognising that the right team can accelerate value creation far beyond operational levers alone. With strong leadership and tech-enablement, firms can scale into data-driven and tech-enabled service platforms.

 

 

What’s Driving Growth

These “people-led” businesses attract private equity because they’re founder-owned and built largely on strong client relationships. As founders step back or transition into advisory roles, leadership succession becomes a defining moment in the investment journey. Appointing new leaders who can preserve client trust while introducing commercial and operational discipline is often the key differentiator between incremental growth and platform-scale success.

 

Additionally, their fragmented structure offers consistent bolt-on potential, while stronger management unlocks scale and margin growth. Mid-market service firms typically trade around 4–7x EBITDA, offering capacity for integration, operational improvements and more effective use of technology [BDO 2025].

 

Outside London, regional founder-led firms offer attractive partnership opportunities. Client relationships are largely built on local trust and so roll-ups typically expand region by region. Funds that can operate at pace are able to build scalable, integrated platforms that are difficult to replicate. This is because they are supported by experienced leadership, deep local connections and a culture that takes time to establish. Increasingly, investors are building leadership benches in these regional hubs - identifying managing partners, COOs, M&A and finance leaders who can bridge local client relationships with their growth ambitions.

 

 

Accountancy: A Proven PE Play

The Accountancy sector has been a primary focus for private equity. The sector is large and highly fragmented, with the UK accounting and auditing services market valued at £37 billion in 2024 (IBISWorld). There are ~40,275 firms across the UK (NimbleFins), the majority of which are small or founder-led - 46% generate less than £100,000 in annual revenue (NimbleFins).

 

This structural fragmentation, combined with reoccurring revenues, compliance-driven demand and long-term client relationships, has made accountancy a proven platform for private equity investment. Successful roll-up platforms include:

•Azets (PAI Partners & Hg) – over 100 acquisitions in the UK and Europe.

•Xeinadin (Exponent) – 27 acquisitions as of May 2025.

•Sumer (Penta Capital) – 34 acquisitions as of September 2025.

 

PE-backed accounting platforms centralise back-office functions, invest in technology and expand into payroll, audit and advisory - creating integrated offerings that improve client retention and profitability.

 

Investment Thesis:

•Roll up regional firms into scalable national platforms.

•Capture efficiencies through shared infrastructure and consistent branding.

•Boost margins with digitalisation and cross-selling.

At current entry multiples, accountancy is one of the most accessible routes for mid-market funds to build predictable, tech-enabled service portfolios. [ICAEW 2024]

 

 

AI and the Next Phase of Roll-Ups

The next phase of consolidation is being shaped by AI and data – the “Roll-Up 2.0.”

 

Private equity has traditionally focused on operational consolidation through scaling, centralising systems and streamlining delivery. Now, automation and analytics are enhancing productivity and driving additional value.

 

Research from PwC shows that most knowledge-work tasks can be automated [PwC 2024]. The goal isn’t to replace staff; the goal is to streamline workflows so teams can focus on higher-value activities.

 

Examples include:

•AI accounting tools used for automating bookkeeping and reporting.

•Chat and voice systems- improving call-centre efficiency.

•Legal process automation- for faster contract review and compliance.

 

When integrated effectively, these tools make operations more efficient and allow for better visibility of business data, improving margins and exit valuations. However, the integration and risk management are important to ensure tools enhance productivity without disrupting client relationships or operational continuity. Digital change only succeeds when leaders drive adoption and integrate new tools into daily practice.

 

 

How Investors Win

Success in UK professional services depends on both structure and leadership. Strong management teams maintain client relationships while putting the right processes in place to allow for scale. The alignment between investor strategy and leadership capability is increasingly viewed as a core value driver. The most successful platforms are those where

 

leaders combine financial discipline with empathy for legacy culture - ensuring that growth and integration preserve client service standards.

Funds that perform well:

•Lead and retain clients and staff.

•Introduce operational discipline, scalable systems and tech-enablement.

 

This balance produces businesses that are easier to manage, generate predictable cash flow and are attractive for further acquisitions or exit. In a competitive market, funds that move quickly, close high-quality deals effectively and use technology to improve scalability will gain a leading edge.

 

 

Key Takeaways

UK professional services is a strong focus for private equity. Competition for high-quality platforms is growing, making speed and execution key. Consolidation and integration remain the main value driver, but operational improvements and selective AI adoption provide additional upside. Ultimately, funds that invest in both people and process will continue to outperform in this market.

 

References

•BDO (2025). UK Professional Services Market Report 2025.

•ICAEW (2024). Mid-Market Accountancy Sector Review.

•IBISWorld (2024). UK Accounting and Auditing Services Market Size.

•NimbleFins (2024). Number of Accounting Firms in the UK.

•PwC (2024). AI and Automation in Professional Services.