The private equity wave isn't slowing down anytime soon — but neither are the rest of the investors eyeing accounting firms.
While private equity tends to dominate the conversation surrounding accounting firms taking outside capital, firm owners actually have an expansive and diverse range of investors to choose from: family offices, wealth management firms and RIAs, venture capital, pension funds, sovereign wealth funds, and more.
The PE craze began in earnest in 2021 when Top 25 Firm EisnerAmper took an investment from Tower Brook Capital Partners and, later that year, Citrin Cooperman took an investment from New Mountain Capital. Fast forward to January 2025, Citrin Cooperman announced it would receive an investment from Blackstone, which would acquire a majority stake in the firm from New Mountain, marking the first instance of an accounting firm transferring private equity ownership from one group to another in the U.S. (New Mountain then went on to make investments in Top 10 Firm Grant Thornton, and Top 25 Firm Wipfli.)
"In the past four years, over 250 of the 750 largest CPA firms in the country — over 33% — have combined with a PE platform," said Allan Koltin, CEO of Koltin Consulting Group. "My guess is this number isn't going to decline, given the success that the majority of the platforms have had to date."
Accounting firms have much to consider when choosing an outside investor beyond PE. Experts say they should consider factors like valuation, deal dynamics, capital for growth, operational control, and culture, while characteristics of the practice itself — like its size, the services it offers, whether it performs audits for public companies — should also inform the decision.
"It goes back to what the accounting firm is looking to accomplish," said Steve Shein, cofounder of Franklin Alliance. "Are they looking for capital for growth? Are they looking to be a part of a collective for knowledge sharing? Are they looking for operational support? Are they looking for an investor with an embedded succession plan?"
Venture capital
Generally speaking, experts suggest that a venture capital investor may be best for smaller, tech-oriented firms that are earlier in their lifespan.
Franklin Alliance is a VC-backed platform that has made three acquisitions since it launched in December 2024. It partners with firms with less than $10 million in revenue, providing resources to address issues like succession planning, recruiting, and technology adoption.
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Shein previously told Accounting Today that as an operating company, the typical pressures of a private equity relationship are removed. There is more flexibility, longer timelines, and more opportunities for liquidity by way of being funded by venture capital. And as a VC-backed company, Franklin Alliance doesn't necessarily need more funding, unlike many other startups.
"We are in a different situation because these businesses that we partner with are all profitable," Shein explained. "We don't burn cash. We raise capital from investors to partner and acquire pieces of all these firms. So we're creating an engine that is cash flow-positive, and we can reinvest that capital in more firms."
Other notable venture capital players in the accounting space include Bessemer Venture Partners and Thrive Capital, which both back accounting and advisory network Crete Professionals Alliance.
Family offices
Family office investors generally have the advantage of a longer time horizon with more passive management, or what is called "patient capital."
"What really drew me to family office capital was the alignment around the long-term value creation versus a quick five-year flip," said Sanjay Agarwal, CEO and managing partner of Elevate. "In talking to family office investors, they understood that horizon very well and had demonstrated it with their own investments in other industries and with other platforms."
Elevate is an accounting, tax and advisory platform, backed by long-term family office investors, that launched in August. It targets firms across major metropolitan markets with $2 million to $20 million in revenue and takes a majority stake while the firms retain their names and brands.
"Value creation is such a huge topic with other industries. And I think on the accounting side, because it's new, nobody's really gotten a strong grasp of that," Agarwal said.
By value creation, Agarwal means how an investor deploys the capital they bring to the table, how they deploy strategic resources, and how they create value for the employees, partners and investors within the firm.
"That takes time," he said. "You can't necessarily implement all of that if you know that you have a shorter window to exit, and some of it maybe wouldn't even come into play because of your exit horizon."
However, Phil Whitman, CEO of Whitman Advisors, noted a disadvantage of patient capital for certain kinds of owners: "Let's say I'm 65 years old, and I want to go another five years, and there isn't a planned liquidity event because they're a long-term holder. So then the question is, if I'm only selling some of my equity, how do I liquidate the remaining balance that I have?"
Windsor Path is another family office-backed platform, launched earlier this year, looking to acquire firms with $3 million to $35 million in revenue.
Wealth management and RIAs
Wealth management and RIA investors allow firm owners to maintain a majority stake but tend to lack the same level of operational support as other investors.
"The difference that comes in partnering with wealth management firms is you're not getting all the support that family office, venture-backed, private equity groups give," Whitman said, emphasizing the lack of practice management backing like HR, technology, marketing, finances and administration support.
But typically, according to Whitman, these kinds of investors buy a minority interest — say, 35% or less — so owners maintain about 65% of their firm at close.
"The RIA or wealth management model is ideal for someone that simply wants to, one, take chips off the table — meaning, at closing, receive a significant sum of cash — and two, have not done well the building of a wealth management practice," he said.
Examples of these investors include independent advisory firm Choreo buying Top 25 Firm Cherry Bekaert's wealth management business in November 2022, and Sequoia Financial group buying Top 25 Firm Eide Bailly's wealth management arm in August 2024.
All the rest
But that's just the beginning. Pension funds, sovereign wealth funds, and international buyers are also players in the game. Even ex-PE investors, like accounting platform Sainvus, are getting in on it. Experts had varying perspectives on whether all of the buyers have already entered the accounting space, or if there are more to come.
Koltin thinks they're all already here: "It's almost as if the question today is, who's not investing?" he said. "The problem is there's not enough sellers. There's not enough accounting firms that want to go the way of private equity.'
Meanwhile, Whitman anticipates additional entrances that will fall into these categories but with different models: "We've seen significant change in the past three years, and I honestly think we haven't scratched the tip of the iceberg."
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One thing is for certain: No one expects this to slow down anytime soon, especially as valuations and multiples have continued to skyrocket.
"The longer you wait, the more valuable you can become," Whitman said. "I don't think this is going away anytime soon."
Looking ahead, Whitman sees increased competition in the coming year for smaller firms: "Now that the Cretes and the Ascends have 30 platform firms, they're going to look to pop these smaller firms into the platform firms that they already have, and I think there's going to be a frenzy that goes on, and these smaller firms are going to have major choices: Do I want to keep my name, my culture and be the leader, or do I want to abdicate that to somebody else and just roll into a larger platform and not have to worry about any of that?"
Koltin concluded, "We thought there was lots of change and transformation in the past four years, and there was more in the last four than the 40 years before that. But when I now go into the crystal ball, when I look to the next four years, I think it's going to be more change than even the last four years."
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