Case Study 41: EisnerAmper and the Test of the Second Ownership Cycle

In March 2026, TowerBrook Capital Partners completed a continuation vehicle transaction for its investment in EisnerAmper. Carlyle AlpInvest led the transaction, Hamilton Lane served as co-lead, and TowerBrook continued as sponsor. The transaction provided liquidity to investors in TowerBrook Fund V and to participating EisnerAmper partners, while the firm continued under the same chief executive and broad strategic direction. TowerBrook described it as a “significant realization event.” It was not, however, a conventional sponsor exit. (TowerBrook, EisnerAmper)

For some investors, the transaction represented a complete exit. For others, it provided partial liquidity while preserving exposure to future growth. TowerBrook transferred the investment into a new vehicle that it continued to manage. EisnerAmper partners also received liquidity, although the public announcements do not disclose how much equity they sold, how much they retained, whether existing incentive equity vested, or whether a new incentive programme was created.

This places EisnerAmper at the beginning of a more difficult ownership cycle. The 2021 transaction rewarded partners for value built under the traditional partnership model. The 2026 transaction raises the question of what happens after those partners have received their first liquidity event. Who still owns enough of the future to build the next period of value, and how does the firm create a credible ownership proposition for people who did not share equally in the first payout?

Who Actually Exited?

A continuation vehicle is a transaction between investment structures. The original private equity fund sells the asset to a new vehicle managed by the same sponsor. Existing limited partners are generally offered a choice between receiving liquidity and continuing their exposure, while new investors provide the capital needed to fund those who sell. The structure allows a sponsor to hold a business beyond the life of the original fund without forcing a sale to another sponsor or taking the company public. (Skadden)

For TowerBrook Fund V and the limited partners electing cash, the EisnerAmper transaction was a realisation. For Carlyle AlpInvest, Hamilton Lane and other incoming investors, it was an entry at a newly agreed valuation. For TowerBrook, it represented continued management of the investment through a new vehicle. For participating EisnerAmper partners, it created liquidity, although the extent and conditions of that liquidity remain undisclosed. (TowerBrook, EisnerAmper)

The transaction consequently had a different meaning for each participant. Describing it as no exit would ignore the investors and partners who received cash. Describing it as a complete exit would ignore TowerBrook’s continued role and the possibility that partners retained or rolled equity. The economic consequences depend on who sold, how much they sold, what remained invested and what new conditions were attached to participation in the next cycle.

The First Transaction Monetised the Old Partnership

TowerBrook’s original investment was announced in August 2021. The parties called it a “strategic investment” and did not disclose the valuation, ownership percentage or detailed partner economics. They did disclose a significant capital infusion, an Alternative Practice Structure separating the licensed CPA firm from the advisory and non-attest business, and committed debt financing from Deutsche Bank. EisnerAmper’s FY2021 net revenue was approximately $456 million. (TowerBrook, Inside Public Accounting)

One interpretation is that the transaction converted value accumulated inside a traditional partnership into liquid capital. Partners who had spent years building the firm could realise part of that value without retiring and without requiring the next generation to finance the full internal buyout. The business simultaneously gained access to capital for acquisitions, technology, talent and expansion. Partner liquidity and institutional investment could happen through the same transaction.

There is an alternative interpretation. A private equity investor does not pay simply for value stored inside the firm at the date of acquisition. Its valuation is based on the cash flows, earnings growth and exit value expected in the years that follow. The liquidity distributed to current partners is therefore financed by transferring a claim on earnings that partners and employees must produce in the future. From this perspective, the transaction does not merely unlock value created in the past. It allows one generation to sell part of the value expected from the next generation. I explored the same tension in Case Study 38: Crowe, KKR and the End of the Generational Contract.

The two interpretations produce different views of succession. Under the first, private equity provides a more efficient way to reward retiring or established partners while funding the institution. Under the second, it separates the generation receiving the proceeds from the generations responsible for delivering the future earnings used to justify those proceeds. The long-term viability of the model depends on whether enough future value and ownership remain available to motivate those later generations.

A 2025 academic study prepared for the PCAOB’s Conference on Auditing and Capital Markets, based on 39 interviews with 41 professionals, found an inherent tension between funding immediate partner payouts and investing in growth. It also found that the post-transaction partner proposition can differ materially from traditional partnership. Senior partners may receive substantial upfront proceeds, retain some equity or deferred consideration, and move from profit distributions towards salary plus performance-based compensation. The first transaction therefore changes both the ownership of the firm and the economic meaning of partnership. (PCAOB conference paper)

Twenty-Seven Acquisitions Created More Than Scale

Between the 2021 investment and the 2026 continuation transaction, EisnerAmper completed 27 add-on acquisitions. The firm says it grew to more than $1.2 billion in revenue, 4,700 professionals, 475 partners and 43 US offices, with a presence in nine countries. TowerBrook attributes this expansion to organic initiatives, acquisitions and investment in talent, technology, AI and higher-value advisory services. (TowerBrook, EisnerAmper)

Twenty-seven acquisitions also introduced multiple entry dates, valuations and transaction agreements. Some acquired-firm partners may have received cash plus rollover equity. Others may be subject to earnouts, retention payments or performance conditions. Partners promoted inside EisnerAmper after 2021 did not participate equally in the value monetised in the first transaction. Future leaders may enter only after much of the platform’s growth has already been incorporated into its valuation.

Acquiring firms is not the same as creating one economically and operationally integrated institution. A roll-up can consolidate revenue and ownership more quickly than it can integrate technology, governance, delivery models, client relationships and partner incentives. The experience of Xeinadin and Sumer illustrates how the valuation of an accounting platform ultimately depends on whether acquired scale becomes integrated and transferable scale. (Case Study 37: Xeinadin, Sumer and the Hidden Assumption Behind Accounting Roll-Ups)

The enlarged EisnerAmper contains at least four economically different partner populations:

EisnerAmper’s partner arrangements are not public, so the degree of alignment between these groups cannot be assessed externally. The disclosed acquisition strategy nevertheless creates a clear governance challenge. One firm can contain partners with different liquidity histories, entry prices, vesting schedules and personal time horizons. Retaining them under the same brand does not automatically make their economic interests compatible.

The Second Transaction Resets the Equity Clock

The 2026 transaction did more than extend TowerBrook’s investment period. New investors entered the continuation vehicle at a valuation agreed in 2026, and existing investors chose whether to realise or continue their exposure. The value created between 2021 and 2026 was crystallised for transaction purposes. New partner or management equity issued for the next cycle will generally participate in value created above this new base.

Continuation transactions make the treatment of management equity particularly important. Depending on the governing documents and negotiations, existing incentive equity may vest, remain outstanding, be partially cashed out, convert into invested equity or become subject to renewed vesting. A transaction can also function as a synthetic exit in which existing awards are settled or rolled and a new incentive programme begins. Management may be permitted to sell proportionately, encouraged to roll most of its equity, or required to retain a minimum investment. (Debevoise & Plimpton)

EisnerAmper’s announcements confirm partner liquidity but do not disclose which of these mechanisms applied. The ownership consequences depend on how much partner capital rolled into the new vehicle, whether existing equity had to re-vest, who can participate in any renewed incentive pool and what value must be created before new awards become economically meaningful. (TowerBrook, EisnerAmper)

The valuation reset also raises the hurdle for the next generation. Legacy partners participated in the firm before the revenue expansion from approximately $456 million to more than $1.2 billion. Newly promoted and future partners begin their ownership journey after that growth has been priced. Their potential return depends on creating substantial additional value from a larger, more complex and more highly leveraged platform.

What Happens When the Golden Handcuffs Come Off?

The 2025 interview study provides useful evidence of what commonly happens after a first private equity investment in an accounting firm. Partners often receive a meaningful upfront payment, while part of the remaining consideration or equity is tied to a multi-year lock-in. Interviewees described this deferred value as a “golden handcuff.” Partners work to increase enterprise value and expect another payment when a later transaction occurs. (PCAOB conference paper)

The continuation transaction may represent that later event for some EisnerAmper partners. If so, a retention mechanism created in 2021 may have reached its economic purpose. Partners who have received substantial liquidity once, or possibly twice, occupy a different personal position from partners whose wealth remains concentrated in the firm. Their willingness to contribute does not necessarily disappear, but the balance between financial necessity, professional identity, leadership ambition and future upside changes.

The next ownership cycle needs its own proposition. Meaningful rolled equity, new performance equity, deferred consideration, long-term vesting and leadership opportunity can all play a role. The design must go beyond keeping individuals at the firm for a defined period. It must encourage them to build capabilities, relationships and leadership systems that will remain after they leave. Golden handcuffs can postpone departure. They cannot renew institutional ownership on their own.

The Next Generation Did Not Sell the Firm

The traditional partnership model contained an intergenerational bargain. New partners bought into the firm, shared in annual profits, helped build enterprise value and eventually realised their capital or retirement entitlement. The financing burden moved from one generation to another, but so did ownership. The incoming generation had a credible claim on future value because it became the next owner of the firm.

Private equity can improve elements of this model. It can release capital earlier, professionalise investment decisions, reduce the financing burden on incoming partners and widen participation below partner level. The PCAOB-hosted study found that some firms use earlier equity or performance incentives to make financial participation more attainable for younger professionals. It also found that partners can become employees receiving salary and variable pay while holding equity that does not determine their annual compensation. Partner title, current remuneration and long-term ownership then become three separate elements. (PCAOB conference paper)

Newly promoted and future EisnerAmper partners did not sell the business in 2021. They are nevertheless being asked to build value above a price established after several years of private equity-backed expansion. If they receive only variable compensation, partner gradually becomes a professional title rather than an ownership proposition. If their equity begins above an unrealistic valuation hurdle, the ownership may have little motivational value.

A sustainable second cycle therefore requires the firm to keep redistributing meaningful claims on future value. Those claims do not have to reproduce the traditional partnership model. They do need to be large enough, attainable enough and broadly distributed enough to convince future leaders that they are building an institution in which they will participate as owners rather than only as highly paid employees.

Growth Is Not Yet Institutionalisation

EisnerAmper’s expansion from approximately $456 million of FY2021 revenue to more than $1.2 billion by March 2026 is impressive. The 27 acquisitions added geography, clients, partners and capabilities. Revenue growth alone does not reveal organic growth, acquisition returns, integration quality, partner retention or deleveraging. It also does not show whether the enlarged organisation operates as one institution rather than as a collection of acquired businesses under one financial platform. (TowerBrook, EisnerAmper, Inside Public Accounting)

In September 2025, Fitch affirmed Eisner Advisory Group at ‘B’ with a stable outlook before withdrawing the rating for commercial reasons. Fitch expected EBITDA leverage of approximately 5.5 to 6.0 times in fiscal 2025, compared with pro forma leverage of 6.5 times in fiscal 2024. This does not indicate that the firm was in distress. It shows that the next ownership cycle begins with a meaningful debt burden and that revenue growth cannot be used as a proxy for equity value or institutional strength. (Fitch Ratings)

Institutionalisation requires common technology and data, integrated delivery and quality systems, a coherent client portfolio, aligned partner economics, transparent performance measures and credible leadership succession. It also requires client relationships, knowledge, reputation and professional judgment to become sufficiently embedded in the firm that they remain valuable when individual partners leave.

Professional services roll-ups face a transferability problem because many of their most valuable assets sit inside people and relationships rather than systems that can simply be acquired. Revenue can be consolidated through transactions. Institutional trust has to be preserved and renewed across offices, partner groups and generations. The gap between those two processes can remain hidden during rapid acquisition-led growth and become visible only when the platform is valued for its next transaction. (The Transferability Problem: Why Professional Services Roll-Ups May Be Discovering That Institutional Trust Is Harder to Scale Than Revenue)

TowerBrook and EisnerAmper say they invested in technology, AI, talent and higher-value services. Public information does not show how fully these investments have been integrated across the acquired platform. The next cycle will increasingly depend on that integration. Acquisitions can create scale quickly, but they cannot by themselves create a common institution capable of producing value independently of the partners and practices originally acquired. (TowerBrook, EisnerAmper)

What Citrin Cooperman Shows

Citrin Cooperman provides a useful, although not identical, comparison. New Mountain Capital invested in the firm in 2021 at a reported enterprise value of approximately $500 million. In January 2025, a Blackstone-led group agreed to acquire New Mountain’s stake at a valuation exceeding $2 billion. The Financial Times reported that revenue had grown from approximately $350 million to $850 million, largely through acquisitions. Citrin became the first large US accounting platform to move from one private equity ownership cycle into another through a conventional sponsor sale. (Financial Times, Blackstone)

The reported partner arrangements provide more insight than the headline valuation. According to the Financial Times, Citrin partners would receive liquidity by selling some shares but roll over the majority of their ownership. Management was expected to increase its stake through future performance awards. The second cycle therefore combined a reward for value already created, continuing exposure for existing owners and a mechanism through which future performance could produce additional ownership. (Financial Times)

Citrin’s structure does not prove that the generational problem has been solved, and its conventional sponsor sale differs from EisnerAmper’s continuation vehicle. It does provide a public example of what a second-cycle proposition can contain: partial liquidity, substantial rollover and renewed performance equity. EisnerAmper’s disclosures confirm partner liquidity but reveal little about the ownership system that followed it.

Closing Thoughts

TowerBrook’s 2021 investment demonstrated that external capital could enter a Top 20 accounting firm through an Alternative Practice Structure and finance rapid expansion without acquiring the licensed attest entity. EisnerAmper subsequently achieved a level of growth that would have been difficult to finance through partner capital alone. (TowerBrook)

The 2026 continuation vehicle begins a harder phase. The first transaction converted the economics of a firm built under the old partnership model. The second cycle has to demonstrate that the new model can produce future owners, renew incentives and preserve institutional continuity after established partners have already received liquidity.

Repeated transactions can refinance ownership. They do not automatically regenerate it. EisnerAmper’s longer-term test is whether it can continually create enough meaningful ownership for the people who did not participate equally in the previous payout but will be responsible for producing the next period of value.

What This Means for Boards

Boards should treat a second liquidity event as a redesign of the firm’s internal ownership system rather than only as a transaction for the sponsor and its investors. They need to understand how value, risk and time horizons are distributed after the transaction. A headline figure for total partner ownership will provide little insight unless it is broken down by partner cohort, service line, age, entry date and leadership role.

Retention is not a sufficient measure. A partner can remain contractually tied to the firm while reducing discretionary effort, avoiding long-term investments or protecting a local practice rather than helping to build the wider platform. Boards need to separate contractual tenure from institutional commitment and individual production from institution-building. Equity, compensation, performance measurement, succession and investment decisions must reinforce the same long-term objectives.

At minimum, boards should be able to answer eight questions:

1. Liquidity: How much value has each partner cohort already realised, and how much personal exposure remains?
2. Rollover: What proportion of invested and incentive equity moved into the next cycle, and on what terms?
3. Vesting: Did the transaction accelerate, preserve or restart vesting, and what replaces the original retention mechanisms?
4. Entry price: At what valuation and hurdle do newly promoted partners and future leaders begin to participate?
5. Breadth: Is meaningful ownership concentrated among legacy partners and executives, or is it being renewed across the future leadership population?
6. Economic compatibility: How different are the arrangements for legacy, acquired, recently promoted and future partners?
7. Institutional contribution: Do compensation and equity reward integration, talent development, knowledge creation, quality and platform building, or primarily individual revenue and EBITDA?
8. Next transaction: If another liquidity event occurs in three to five years, who will have created the value, who will receive the proceeds and who will still have a reason to build the cycle after that?

The first private equity transaction can monetise a firm built by a partnership. The second ownership cycle reveals whether the new system can create its own next generation of owners.

Sources

1. TowerBrook Capital Partners, “TowerBrook Announces Continuation Vehicle Transaction for EisnerAmper,” 25 March 2026.
2. EisnerAmper, “EisnerAmper Announces Continuation Vehicle Transaction with TowerBrook,” 25 March 2026.
3. Skadden, Arps, Slate, Meagher & Flom, “Continuation Funds: What You Need to Know,” May 2024.
4. TowerBrook Capital Partners, “EisnerAmper Announces Investment by TowerBrook Capital Partners,” 3 August 2021.
5. Inside Public Accounting, “EisnerAmper Acquires Fellow IPA 100 Firm,” 16 June 2022.
6. Vivian Yinqing Mao, Miguel Minutti-Meza, Zeyu Ou and Aleksandra B. Zimmerman, “A Primer for Understanding and Researching Private Equity Investments in the Accounting Industry,” paper prepared for the PCAOB Conference on Auditing and Capital Markets, 8 August 2025.
7. Henrico Dolfing, “Case Study 38: Crowe, KKR and the End of the Generational Contract,” 22 June 2026.
8. Henrico Dolfing, “Case Study 37: Xeinadin, Sumer and the Hidden Assumption Behind Accounting Roll-Ups,” 15 June 2026.
9. Debevoise & Plimpton, “Management Equity Issues in Continuation Funds,” May 2024.
10. Fitch Ratings, “Fitch Affirms and Withdraws Eisner’s ‘B’ Rating; Outlook Stable,” 9 September 2025.
11. Henrico Dolfing, “The Transferability Problem: Why Professional Services Roll-Ups May Be Discovering That Institutional Trust Is Harder to Scale Than Revenue,” 2026.
12. Financial Times, “Blackstone Joins Private Equity Deal Wave in US Accounting Sector,” 7 January 2025.
13. Blackstone, “Citrin Cooperman, a Leading Professional Services Firm, to Receive Significant Investment as Blackstone Acquires Stake from New Mountain Capital,” 7 January 2025.