Accountants should be whizzes at working out how best to structure and fund their firms. Instead, it turns out there's a great deal of trial and error. Take RSM, the fifth biggest of its breed by revenue in the US and seventh globally, now mulling a flotation. It has been here before. The US business spent a decade on the stock market as part of H & R Block. Meanwhile, RSM Tenon was publicly traded in London until it met with insolvency and a quiver of fines.
If that doesn't deter RSM from going public again, there are other things that should at least give it pause — including the tyrannies of regular earnings updates, market gyrations and fickle owners. Consider the example of CBIZ, an accountancy firm of three decades' standing. Its shares have been in a tailspin for much of the past two years, pummelled by earnings disappointments. Grant Thornton in the US, backed by private equity firm New Mountain Capital, swooped earlier this year with a takeover offer.
Other clients may use technology, be it AI or simpler apps, to do more of the work themselves. For companies that want to grow briskly, private equity ownership stacks up better. Look, for example, at the managers who branched out of Big Four firms to launch their own boutiques. Indeed Grant Thornton in the UK, majority owned by private equity group Cinven since 2024, is even pulling ahead in the talent wars by offering graduate trainees higher salaries than they'd receive at the Big Four.
Source: Financial Times Companies · Summarized by HeadlinesBriefing