Private equity has spent the last decade dismantling one of the most persistent assumptions in professional services: that partnership-based firms are structurally resistant to external capital. What began as isolated investments has evolved into a pattern, and then into momentum. In the United States alone, private equity firms have taken stakes in an increasing share of mid- and upper-tier accounting firms, while more than $50 billion of capital has flowed into the sector globally. Transactions such as the investment by Hellman & Friedman into Baker Tilly, the deal between New Mountain Capital and Grant Thornton, and the acquisition of Citrin Cooperman by Blackstone show how quickly the model has moved from theoretical possibility to practical reality (Blackstone acquires stake in Citrin Cooperman, Accountancy Europe: Private equity in accountancy).
At the same time, the entry playbook has become standardized. Firms are acquired, advisory businesses separated from audit to meet regulatory constraints, and growth driven through consolidation in a fragmented market. This logic is visible across the transactions explored in The Seven Ways Private Equity Is Breaking Into the Big 10 and in case studies such as Baker Tilly, Grant Thornton, and PwC’s Monday. The sector has moved beyond whether private equity can enter professional services. The question now is how quickly and at what scale that entry can be replicated.
But the model only works if it can be completed. Private equity is not designed to hold assets indefinitely. It requires exits, typically within three to seven years, to return capital and generate performance. That is where professional services becomes structurally difficult. These firms are regulated, partner-driven, locally embedded, and dependent on people who can leave with clients, knowledge, and revenue. What appears externally as a unified firm is often a collection of distinct economic units internally. Entry has become repeatable. Exit remains conditional on factors that are far harder to control.
The Cleanest Exit: Selling to Another Sponsor
The Citrin Cooperman transaction in early 2025 provides the clearest example of a successful exit under current market conditions. Blackstone acquired its stake from New Mountain Capital, transferring ownership of a scaled accounting platform from one sponsor to another without requiring a public listing or a strategic buyer. The firm, serving more than 15,000 clients globally, continued to pursue the same growth strategy after the transaction, indicating that the change in ownership did not materially alter its direction (Blackstone acquires stake in Citrin Cooperman).
This type of exit depends on prior transformation. What was once a partnership-based organization has been reshaped into a platform with centralized operations, acquisition-driven expansion, and the ability to deploy capital across a fragmented market. In this form, the business becomes legible to financial buyers, who can assess it using frameworks applied to scalable services companies rather than traditional professional-services firms. The exit is not simply a transaction. It reflects a prior shift that aligns the firm with the expectations of capital.
At the same time, the transaction exposes a structural limitation. The buyer is not a strategic acquirer integrating the firm into a broader industrial context. It is another capital provider, albeit one with greater scale and flexibility. The exit works because a subsequent buyer is willing to continue the same model. This creates a dependency on the availability of capital at increasing levels of scale. One successful sponsor-to-sponsor transfer shows that the mechanism works. It does not prove it will hold as more firms attempt similar exits.
The Reset Exit: Merging Instead of Selling
The Baker Tilly–Moss Adams combination in 2025 illustrates a different approach to the exit challenge. Reuters reported the transaction at approximately $7 billion, creating one of the largest advisory-focused CPA firms in the United States, with combined revenues of around $3 billion and ambitions to scale further. The deal followed Baker Tilly’s earlier private equity investment, described as the largest in the U.S. CPA sector at the time, reinforcing the scale and ambition behind these transactions (Reuters: Baker Tilly–Moss Adams deal, Baker Tilly investment announcement).
The merger looks strategic. It is also structural. Scale changes the exit equation. Larger firms are easier to finance, easier to position, and more likely to attract a broader set of buyers, including public markets. Executives involved in the transaction have pointed to a potential IPO as the firm grows, suggesting the merger is not only about operational benefits but also about creating an exit pathway that would not exist at a smaller scale.
This dynamic reflects the broader transition from network to platform. The merger does not resolve the structural challenges of exiting a professional-services firm. It reframes them by increasing the size and coherence of the asset. The expectation is that scale will make the firm more transferable. Whether that holds depends on factors beyond size, including governance, regulatory structure, and the ability to present the business as a unified, comprehensible entity to potential buyers.
The Non-Exit: Recapitalization Instead of Realization
The Vialto case provides a counterpoint to more optimistic exit narratives. The business was carved out of PwC in 2022 and acquired by Clayton Dubilier & Rice as a global mobility platform. At the time, the asset appeared well suited to private equity ownership: specialized, globally integrated, and structurally separated from audit. These characteristics suggested it could be scaled and eventually exited in line with the standard investment model (PwC sells mobility business).
By 2025, the anticipated exit had not materialized. Instead, Vialto announced a recapitalization that included new equity and a significant reduction in debt, while the original sponsor remained in control. This indicates that the initial assumptions on timing and structure were not fully met. The recapitalization was framed as a strengthening of the balance sheet, but it also reflects the need to adjust the capital structure to operational and market realities (Vialto recapitalization announcement).
The significance lies in what this reveals about the model. Even where a business is relatively clean and well positioned, the transition from carve-out to scalable platform can introduce complexities that delay or complicate exit. The loss of network support, combined with leverage and growth expectations, creates conditions that must be actively managed. Recapitalization does not represent failure, but it shows that exit depends on factors that extend beyond the initial investment thesis.
The Clean Exit: Carve-Outs That Can Be Sold
If broad, hybrid firms are difficult to exit, the market is quietly showing what does work. Interpath Advisory provides a clear example. H.I.G. Capital acquired KPMG’s UK restructuring business in 2021, carving out a focused advisory capability that could operate independently from the broader audit and tax ecosystem. From the outset, the positioning was different. This was not a full-service firm with overlapping mandates and regulatory constraints, but a specialist platform in a high-value segment with clear demand cycles and a distinct identity (H.I.G. acquires KPMG restructuring business).
By 2026, H.I.G. agreed to sell Interpath to Bridgepoint for around $1 billion. The path from entry to exit was not effortless, but it was coherent. The asset had been expanded geographically, strengthened operationally, and positioned as a leading independent restructuring firm. Most importantly, it was legible to the next buyer. The business could be understood as a standalone entity, with clear economics, limited regulatory entanglement, and a governance structure independent of a broader partnership model (H.I.G. sells Interpath to Bridgepoint).
This is the part of the story often overlooked. Private equity works in professional services when the asset can be isolated, simplified, and presented as something closer to a conventional business than a professional-services network. Interpath is not just a success story. It is a boundary condition. It shows that exits become viable when complexity is removed rather than managed. The more a firm resembles a bundle of separable capabilities, the more it behaves as an investable and transferable asset. The more it remains a tightly integrated partnership, the harder it becomes to exit cleanly.
The Aspirational Exit: IPO
The idea of taking a professional-services firm public has a strong hold on investors and executives because it offers a clean resolution to a structurally messy problem. An IPO promises liquidity, valuation uplift, and a permanent capital base that removes the pressure of a fixed investment horizon. In private equity-backed accounting and consulting firms, it also represents something more subtle: the transformation of a partnership into a corporate asset that can be priced, traded, and owned at scale. That logic underpins many large-scale combinations, including the Baker Tilly–Moss Adams transaction, where executives have pointed to a potential future listing as the firm grows (Reuters: Baker Tilly–Moss Adams $7bn deal).
The example that anchors this narrative is Accenture, whose 2001 IPO raised approximately $1.7 billion and marked one of the most successful transitions from partnership heritage to a publicly traded consulting company. But this outcome was not simply the result of scale or timing. It required restructuring into a business public markets could understand: standardized operations, clear governance, and earnings visibility most professional-services firms lack. Accenture did not just grow. It simplified itself into a form that could be owned broadly without relying on the cohesion of a partnership model (SEC filing: Accenture IPO).
A more sobering counterpoint is KPMG Consulting, later BearingPoint, which followed a similar path but filed for Chapter 11 bankruptcy in 2009. Parts of the business were subsequently sold, showing how quickly the promise of a scalable consulting platform can unravel when complexity, governance challenges, and market expectations collide. The contrast between Accenture and BearingPoint is not an anomaly. It is a boundary condition. IPO is not a natural end state for professional-services firms, but a demanding transformation only a few can sustain. In that sense, IPO is less a base case than a narrative device supporting the investment thesis, even when the required conditions are only partially in place (SEC filing: KPMG Consulting IPO).
The Structural Constraint: Regulation
Regulation does not prevent private equity from entering professional services, but it shapes how firms can be owned, governed, and ultimately exited. The growing use of alternative practice structures illustrates this tension. In transactions such as the investment by New Mountain Capital into Grant Thornton, advisory and non-attest services are separated into a capital-backed entity, while audit remains within a regulated partnership. This preserves independence requirements and enables external investment, but it also breaks the firm into components that no longer share a single ownership logic. What appears as a unified brand is, in reality, a set of legally and economically distinct entities, each with its own constraints and incentives (Grant Thornton / New Mountain transaction).
This fragmentation becomes critical at exit. A firm structured to allow capital in cannot easily be sold as a whole, because its components are governed by different regulatory regimes and ownership rules. Advisory businesses may be transferable to financial buyers, while audit practices remain restricted, locally governed, and resistant to consolidation. The result is not a single asset, but a portfolio of interdependent businesses that may need to be separated or partially divested to achieve any form of realization. The mechanisms that enable entry also constrain exit, embedding structural complexity from the outset (AICPA APS Independence Discussion Memo).
This dynamic is not theoretical. It is visible across the largest firms in the industry. The failed attempt by EY to separate its audit and advisory businesses under Project Everest showed how difficult it is to disentangle these structures even without external capital. The evolving structure of Grant Thornton reflects how private equity accelerates a process already underway. These are not isolated governance challenges. They are structural constraints that define what can ultimately be sold (EY Project Everest case study).
The Realistic End State: Capital Passing Between Capital
The most revealing development in recent transactions is not that exits are happening, but who is buying. When Blackstone acquires a stake in a firm such as Citrin Cooperman from another sponsor, the transaction does not represent a transition from financial ownership to strategic or public ownership. It reflects a transfer between layers of capital, each with its own time horizon, return expectations, and capacity to support further growth. The firm does not leave financial ownership. It moves within it, from one sponsor to another, often continuing the same underlying strategy (Blackstone acquires stake in Citrin Cooperman).
This pattern suggests that the traditional private equity exit model, in which an asset is sold to a strategic buyer or taken public, does not fully apply to professional services. Instead, the sector is moving toward a different equilibrium, where firms are scaled, professionalized, and transferred to larger or more patient pools of capital. These buyers are less constrained by fixed horizons and better positioned to manage structural complexity. At the same time, the endpoint of the investment shifts from independence to continued integration within a broader ecosystem of capital ownership.
The implications extend beyond individual transactions. If the most likely buyers are other financial sponsors or capital platforms, firms are shaped for that outcome from the outset. Governance structures, operating models, and growth strategies begin to reflect the preferences of capital rather than the logic of partnerships or the requirements of strategic acquirers. The exit is no longer a discrete event. It becomes part of a continuous process in which ownership changes, but the underlying model remains intact.
Closing Thoughts
Private equity has introduced a new logic into professional services, emphasizing scale, capital deployment, and consolidation in a sector historically defined by partnerships and local autonomy. The entry strategies behind this shift are now well understood and increasingly standardized. Firms are acquired, restructured, and expanded with clear objectives, and capital continues to flow into the sector as investors target its recurring revenue and fragmented structure (Accountancy Europe: Private equity in accountancy).
The exit strategies that complete this model are far less developed. While some transactions show that sponsor-to-sponsor transfers are possible, and others demonstrate that focused carve-outs can be built and sold, these examples do not establish a broadly applicable path to realization. Instead, they highlight the conditions required for exit: structural clarity, regulatory separation, and the ability to present the business as a coherent, transferable asset. Where these conditions are absent, exits become more complex, more indirect, and more dependent on capital availability than on the underlying quality of the firm.
This imbalance is unlikely to disappear soon. It reflects a deeper tension between financial ownership and the characteristics of professional-services firms, which remain shaped by regulation, partnership structures, and human capital. Private equity can reshape these organizations, but it cannot remove these constraints. The result is a model increasingly effective at entering the sector, but still searching for a scalable way to exit it.
What This Means for Boards
Boards evaluating private equity involvement in professional-services firms often focus first on valuation, growth potential, and strategic positioning. Those factors matter, but they do not fully address the central question of how the investment is ultimately expected to be realized. The credibility and structure of the exit path need to be considered from the outset, because they shape not only the eventual outcome, but also the operating logic of the firm throughout the investment lifecycle itself.
A business being prepared for a sponsor-to-sponsor transaction is often managed differently from one targeting a public listing, long-term independence, or strategic integration into a larger platform. Over time, the anticipated exit path begins influencing investment priorities, operating-model decisions, acquisition strategy, organizational design, and even the types of capabilities the firm chooses to emphasize.
This influence gradually becomes visible in the structure of the organisation itself. Firms oriented toward future sponsor exits often prioritize scalable and transferable revenue streams, acquisition-led growth, platform integration, and the development of business units that can be separated, valued, and transacted more easily. Activities that are difficult to carve out, difficult to standardize, or heavily dependent on local partnership structures may become strategically less attractive over time. The expected exit model therefore starts shaping the internal architecture of the firm, even when that influence is not discussed explicitly.
The risks become most visible when the anticipated exit path proves more difficult than originally expected. As the Vialto example illustrates, even large and well-structured carve-outs may ultimately require recapitalization rather than a clean realization event, extending investment horizons and changing incentives inside the business. At the same time, fragmented regulatory structures, local ownership requirements, and network-based governance models can materially limit the pool of potential buyers and complicate integration economics.
Boards are therefore not simply deciding whether to accept external capital. Increasingly, they are also influencing how the firm will evolve operationally, how it will allocate investment, how it will organize itself structurally, and under what conditions ownership may eventually change again in the future. In markets where exits remain possible but rarely predictable, the economics of the eventual exit can begin shaping the firm long before any transaction actually occurs.
I work with boards and executive teams on independent perspectives across professional-services transformation, governance, operating models, private equity dynamics, platform economics, and large technology programs. If your leadership team is working through similar questions around ownership structure, operating-model evolution, strategic dependency, or investment governance, feel free to reach out.
Sources
Primary Sources
- Blackstone acquires stake in Citrin Cooperman
- Baker Tilly secures strategic investment led by Hellman & Friedman
- Vialto Partners completes recapitalization transaction
- H.I.G. Europe to acquire KPMG’s UK restructuring business (Interpath)
- H.I.G. to sell Interpath Advisory to Bridgepoint
- Grant Thornton and New Mountain Capital close growth investment
- PwC announces sale of Global Mobility business (Vialto)
- Accenture IPO filing (SEC, Form S-1 excerpt)
- KPMG Consulting IPO filing (SEC)
Secondary Sources
- Reuters: Baker Tilly and Moss Adams set to merge in $7bn deal
- Accountancy Europe: Private equity investment in accountancy firms
- AICPA: Alternative Practice Structure (APS) Independence Discussion Memo
Referenced Articles
- The Seven Ways Private Equity Is Breaking Into the Big 10
- Case Study 27: Baker Tilly and Private Equity – When a Network Starts Becoming a Platform
- Case Study 26: Accenture – The Success Story That Was Never Meant to Happen
- Case Study 24: PwC’s Monday – How a $20bn Spin-Off Fell Apart
- Case Study 23: The Fragmentation of a Global Firm – How Private Equity Is Reshaping Grant Thornton
- Case Study 22: The Failed EY Split – Project Everest