Accounting companies and personal fairness: The forefront of a brand new period

As I replicate on the present state of the accounting career, the sense of a sea change is ubiquitous. For these of us who love what we do, worth the colleagues and purchasers with whom we work, and are pleased with the companies we offer, there may be extra alternative than ever to assist them succeed as the standard CPA agency mannequin is energized and reworked by new capital, methods and improvements.  

A significant contributor to this transformation has been the rising variety of partnerships between accounting companies and personal fairness traders. Accounting has attracted the eye of PE because of the progress potential of various enterprise advisory companies, together with the significance of stalwart attest companies in a quickly evolving enterprise world. It is no shock, then, that PE has partnered with our agency, Eisner Advisory Group LLC, in addition to a number of different top-tier companies.

Whereas opinion varies as to the impression of PE partnerships on the career, I can say that Eisner’s expertise has been very optimistic.

Increasing shopper companies and accelerating progress   

Partnering with PE permits accounting agency leaders to speed up the evolution of their service choices, enhance funding in expertise and expertise, and develop capability for each natural progress and focused mergers and acquisitions. The capital supplied via PE traders can also drastically improve the standard and capability of core companies (tax and audit) on which companies reminiscent of ours had been based. Consequently, PE companies ought to profit from the robust progress projected for our trade, with the potential to create strong ROI.  

Our career has an admirable observe document of serving to companies enhance their efficiency by streamlining operations, managing threat publicity and advising on optimizing tax effectivity, whereas sustaining purchasers’ monetary integrity. Moreover, our practitioners have a robust sense of mission: A milestone report by the American Institute of CPAs discovered overwhelming settlement that the career’s core goal stays: “Making sense of a altering and sophisticated world.” Basically, we’re about making the advanced easy for purchasers. Becoming a member of forces with a PE associate is a strategic transfer that enables our companies to additional that mission, particularly throughout financial uncertainty and disruption. 

From EisnerAmper’s perspective, I might even transcend the phrase “partnership.” To borrow an iconic line from the film Casablanca, it has been “… the start of a wonderful friendship.” Our PE partnership has met our each expectation. EisnerAmper operates underneath another apply construction: EisnerAmper LLP, a licensed CPA agency offering attest companies; and Eisner Advisory Group LLC, offering purchasers enterprise advisory and nonattest companies. Our mission stays unchanged (with our CPAs because the professionals driving our fame as trusted advisors), however we have gained entry to a robust new means to meet that mission. 

TowerBrook’s funding has enabled EisnerAmper to launch new apply areas, reminiscent of ESG, cryptocurrency and household workplace expertise companies, whereas scaling up M&A exercise, with a watch towards companies that search companions to allow them to serve their purchasers’ quickly evolving wants.   

Any accounting agency considering a PE partnership ought to perceive that, as in any enterprise transaction, there might be some challenges and complexities. There might be bumps within the street. That mentioned, there are some classes realized that I can supply on this rising mannequin and its promise for our career. 

 Pillars of a profitable PE partnership 

First, companies should correctly articulate their imaginative and prescient for the longer term and the way an funding would additional their long- and short-term targets. A transparent, shared imaginative and prescient will allow the agency to decide on its future path and allocate capital most successfully. It’s important to have that imaginative and prescient earlier than embarking on the journey. 

Second, a agency should assess how a deal may impression its tradition. We nonetheless have the identical core tradition of collaboration, innovation and collegiality we have had in years previous, and whereas our agency will look radically totally different 10 years from now, we’re assured our tradition will endure. 

Third, and eventually, a agency should assess how the funding association will additional its skill to draw one of the best and brightest expertise, enabling nice shopper service and accelerated innovation.

Prior to now yr, we efficiently accomplished a number of combos of companies that permit a extra diversified vary of labor experiences. This not solely permits us to develop our expertise base, develop our footprint and improve our shopper choices, but additionally permits budding expertise to construct on their experience and discover new alternatives and new markets.

These alternatives will solely proceed to develop as we make investments even additional in expertise and innovation. Not way back, the accounting career was primarily a two-lane street of tax and audit. At this time, it’s a superhighway of cybersecurity, outsourced options, digital well being companies, compensation consulting and far more. For the agency, its practitioners and purchasers, the locations and alternatives are limitless. In a rising subject of service supplier companies not rooted in, nor certain by the standard CPA possession mannequin, our new construction and these new service choices will make us extra aggressive. 

Over the previous yr, many companions from historically structured companies and different nontraditional opponents have joined EisnerAmper due to our new possession mannequin, a myriad of sources and the chance to acknowledge the worth they create because the agency grows. Capital from our PE companions permits for additional funding in expertise and coaching to unlock potential with a “can-do” perspective, serving to our professionals notice their full potential as trusted enterprise advisors — the apex of shopper service. 

 A brand new mannequin for a brand new technology of expertise

Moreover, the incoming workforce technology reveals much less curiosity within the conventional accounting agency possession mannequin and dealing as a associate for 25-plus years earlier than realizing the worth they’ve created. The pandemic-unleashed distant and hybrid work mannequin has additional moved the pendulum for accounting professionals, and they’re much more prone to work at a variety of companies and in several companies throughout their careers. Accounting companies should construction themselves creatively to proceed to achieve success. 

An infusion of capital permits for the brand new potentialities of expanded product service choices and dovetails with the purpose of attracting and sustaining key expertise; it offers extra arrows in our quiver, extra instruments to supply various and adaptive careers, which additionally makes the sky the restrict for our employees. 

A considerable non-public fairness funding in an accounting and consulting agency is not shopping for into a reputation, a roster of purchasers or a geographic apply space. It is an funding in probably the most highly effective of all sources: folks.