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Phase Two of Private Equity in Professional Services
Wilton and Bain Senior Associate, Natalie Reynolds, explores the shifting landscape of Private Equity in Professional Services.
Private equity is no longer the newest story in professional services. What feels new today is the impact it is beginning to have on the firms it owns.
Whether it is acquisitions, new platform investments, or the next wave of consolidation, private equity has become one of the defining forces shaping the sector. Much of the conversation has understandably centred on the what: which firms are being acquired, where the next platform investment will be made, and how buy-and-build strategies or consolidation can unlock value. The first wave of private equity investment in professional services was about scale.
However, I believe the conversation is shifting. The focus is moving beyond what private equity is investing in and towards how it is reshaping the sector. The next wave is about building businesses that look fundamentally different. It is about how capital can be deployed not only to support acquisitions, but also to accelerate investment in technology, AI, leadership, talent, and new operating models. Even more importantly, it is about how these investments are changing the wider ecosystem in which professional services firms operate, from the way they deliver services and compete for talent to how they create long-term value for clients.
In many ways, private equity is not creating these trends from scratch; it is accelerating changes that were already underway. The firms that recognise this are beginning to evolve from traditional partnerships into technology-enabled, commercially driven businesses with a greater focus on scalability and recurring revenue to work towards sustainable growth.
In this article, I explore what I see as Phase One and Phase Two of private equity investment in professional services, reflect on the key shifts that distinguish the two, and conclude with some thoughts on what a potential Phase Three could look like over the coming years
Phase One: Building Scale (c.2017–2024)
The first phase of private equity investment in professional services was defined by scale. Between roughly 2017 and 2024, investors were drawn to the sector by its fragmented nature and resilient demand. Also, in many markets, there were hundreds of high-quality regional and specialist firms operating independently, creating an ideal environment for buy-and-build strategies.
The playbook was relatively consistent. Firms were acquired and integrated into larger platforms, which expanded geographic reach and broadened service offerings, creating opportunities for cross-selling across a more diverse client base. Alongside acquisitions, there was a strong focus on improving operational efficiency through more standardised processes and a more professional approach to governance. Investments in finance, technology, and central support functions helped create businesses that were better equipped for sustained growth and, ultimately, more attractive to future investors.
Financial performance was naturally a key focus. Enhancing EBITDA through a combination of operational improvements and greater commercial discipline became a central part of the value creation strategy as firms scaled. While the specifics of each investment differed, the broader ambition remained the same, to transform fragmented firms into larger, more structured businesses capable of sustained growth.
The success of this approach is reflected in the number of platform businesses that emerged during this period. However, despite becoming larger and often more profitable, many firms still operated in fundamentally the same way. They remained largely partner-led organisations, generating the majority of their revenue through traditional project-based services.
Mayer Brown recorded just 19 PE-backed acquisitions of UK professional services firms in 2020, and, one year later, that number had jumped to 53. By 2024, business services had become the largest sector for UK PE deal volume representing 43% of all UK private equity deal volume, with professional services (particularly accounting) at the centre of the activity. Then, in 2024, Grant Thornton became the largest UK professional services firm to take external equity investment.
That is why I see this period as Phase One. It was about changing the ownership structure and increasing scale. The next phase, however, is less about making firms bigger and more about making them different.
Phase Two: From Building Scale to Building Different Businesses (2024–Present)
I believe we are now entering a second phase of private equity investment in professional services that is less focused on what firms own and more focused on how they operate.
I am seeing conversations shift away from acquisitions alone and towards the capabilities required to build more resilient and differentiated businesses. Leadership is a good example. Firms are investing in the people and capabilities needed to support the next stage of growth. Leadership itself is becoming more institutional, with firms broadening their executive teams and looking beyond traditional partnership succession.
Technology also appears to be taking on a different role. Instead of being viewed primarily as a means of improving efficiency or reducing costs, investment is now focused on transforming how services are delivered. AI is becoming embedded within delivery models rather than being marketed as a standalone offering, while managed services and recurring revenue propositions are becoming strategic priorities as firms look to build deeper client relationships and more predictable income streams.
The market is also entering a second cycle of ownership, with platforms including Azets (2023), Evelyn’s professional services business (2025), Cooper Parry (2025), and Affinia (2026) already having moved through a second transaction, as new sponsors provide capital for the next phase of growth.
Perhaps most notably, success is no longer measured simply by the number of acquisitions completed. More and more, the emphasis appears to be on successful integration and execution as firms look to deliver long-term value beyond the initial transaction. Acquiring businesses remains important, but the differentiator is becoming what firms do after the deal is complete. To me, the defining characteristic of Phase Two is fundamentally changing how firms are built and how they create value, instead of simply growing them.
The Key Shifts Between Phase One and Phase Two
While no two firms or investments are identical, I believe there are several clear shifts that distinguish today’s investment landscape from that of the last decade. Together, they illustrate how value creation in professional services is evolving.
Shift One: The Rise of Revenue Quality
In Phase One, growth was largely driven by acquisition. Firms expanded into new geographies, added complementary service lines and built scale through consolidation. Revenue growth was a key measure of success.
While those priorities remain important, I believe the emphasis is shifting towards the quality and resilience of earnings. Investors are placing greater value on recurring revenue, stronger client retention, increased wallet share, and more predictable cash flows. Investors appear to be placing less emphasis on growth for growth’s sake and more on the strength and resilience of the underlying business.
This subtle change has significant implications for strategy. It is one of the reasons managed services are becoming a strategic priority, supporting a shift towards business models built on predictable, long-term revenue streams.
Shift Two: Leadership
One area where this evolution is particularly visible is leadership. During Phase One, many firms remained founder-led or relied on long-serving Managing Partners, with succession typically coming from within the partnership.
In Phase Two, leadership teams are becoming broader and more institutional. Firms are appointing external CEOs, commercial leaders, and executives with backgrounds in transformation, technology and growth. Roles such as Chief Revenue Officer, Chief Transformation Officer and Chief Digital or Technology Officer are becoming more common, reflecting the increasing complexity of these organisations.
As professional services firms continue to scale, leadership is evolving beyond technical expertise alone. Success now depends on leaders who can help reshape how professional services businesses are built and run. In many cases, executive teams are beginning to resemble those of technology companies or other private equity-backed businesses, rather than traditional professional partnerships.
Azets appointed Chris Horne as UK CEO following PAI’s investment in 2023, while Xeinadin appointed David Baines as Group CEO following Exponent’s investment. Horne was not a traditional accounting-firm founder/Managing Partner; he came from a senior corporate leadership background, including roles at Alliance Boots and British Airways. This demonstrates the shift from a traditional partner-led model towards professional executive leadership as platforms scale.
Shift Three: Value Creation Starts on Day One
In Phase One, firms were often acquired because they were already high-quality businesses with strong market positions and attractive growth potential. The role of private equity was largely to accelerate an existing trajectory through investment, consolidation, and operational improvements.
Today, however, value creation begins from the moment an investment is made. Firms are investing heavily in digital transformation, pricing optimisation, operating model redesign, technology implementation, AI, and commercial capability. International expansion remains important, but it is instead now supported by a broader transformation agenda rather than growth alone.
Rather than simply acquiring excellent businesses, investors are actively shaping what those businesses become. In my view, this shift from buying excellence to creating it is one of the defining characteristics of Phase Two.
Shift Four: Talent as a Competitive Advantage
Another clear change is the role that talent now plays in the investment story. During Phase One, firms typically hired to strengthen established practices or replace key leaders. Now, they are hiring to create entirely new capabilities.
Cooper Parry provides a striking example. Following Waterland’s investment in 2022, headcount grew from more than 475 to 1,450 by late 2024, more than tripling in just two years, alongside 11 acquisitions.
Demand has grown for leaders who can establish and scale capabilities in areas such as AI advisory, cyber, value creation, deals, managed services, ESG, and data. These hires are not simply filling leadership gaps, but they are helping define the future direction of the business.
Investment is being directed towards capabilities that did not previously exist within the business. Hiring the right leader is often the catalyst for building those capabilities, making executive talent an integral part of the value creation plan rather than a downstream hiring decision.
Shift Five: The Partnership Model
Perhaps the least discussed shift is the evolution of the partnership model itself. While partnerships remain at the heart of many professional services firms, private equity ownership is prompting a broader conversation about how these businesses should be structured and governed.
ICAEW’s 2026 research found that 46% of the 35 UK mid-tier accountancy firms surveyed had secured private equity investment, up from 25% in 2025 and 12% in 2024.
Firms appear to be wrestling with questions that would have been less common a decade ago. How much autonomy should partners retain? How should equity and incentives evolve? Should senior leaders always come from within the partnership, or can external executives bring greater value?
The growing prominence of these discussions reflects a broader evolution in the partnership model, as firms adapt to become larger, more commercially sophisticated organisations. It is another sign that Phase Two is reshaping professional services from the inside out.
Shift Six: Technology
Much of the current discussion around technology in professional services centres on AI. While AI is undoubtedly an important catalyst, I believe the broader shift is that technology is no longer viewed simply as a support function or an operational cost.
Technology is influencing almost every aspect of how firms compete. It is shaping service delivery, pricing models, client experience, recruitment, knowledge management, managed services, and the way firms create and leverage data assets. Rather than sitting behind the business, technology is becoming embedded within it.
PwC has committed $1.5 billion globally to AI initiatives, becoming OpenAI’s largest enterprise customer and first reseller of ChatGPT Enterprise in 2024. KPMG has followed a similar path, committing $2 billion to AI over five years and subsequently announcing a global alliance with Anthropic to embed Claude into its global client-delivery platform.
This represents a significant difference from Phase One. Investment in technology is no longer just about improving efficiency; it is becoming a source of competitive advantage, enabling firms to differentiate their propositions and scale more effectively. Technology is evolving from a business enabler into a commercial engine.
Towards a Potential Phase Three
If Phase One was about building scale and Phase Two is about transforming operating models, then Phase Three may be defined by the long-term consequences of those changes.
By 2030, I would not be surprised to see more non-accountants leading accounting firms, so that executive committees are made up of a broader mix of operating executives and commercial leaders. Recurring revenue is likely to become even more valuable than traditional project income. AI may become so deeply embedded in service delivery that it is no longer marketed as a differentiator, but simply expected. Equally, the gap between technology-enabled platform firms and more traditional partnership models could continue to widen as technology becomes a greater source of competitive advantage. In turn, this will create a more distinct divide across the professional services market.
Conclusion
The first wave of private equity investment changed who owned professional services firms. The second wave is changing what those firms are becoming. Long-term success will depend on how effectively firms adapt their leadership, operating models, and technology to meet changing client demands. The firms that thrive over the next decade may not be those that complete the most acquisitions, but those that successfully evolve into modern professional services platforms.
If you would like to connect with Natalie about this piece, please get in touch.
Natalie Reynolds | Senior Associate
