Accounting Firms Embrace IPOs Amid Shifts

The accounting profession is on the cusp of a notable transformation, as more firms look towards initial public offerings (IPOs) as a viable alternative to traditional partnership structures and private equity investments. This shift marks a significant strategic change, driven by recent successful IPOs and the limitations observed in private equity ownership models.

Historically, accounting firms operated predominantly as private partnerships, sharing profits internally among partners. However, the landscape changed notably with the collapse of RSM Tenon in 2013, the UK's first publicly listed accounting firm. Overleveraged from acquisitions and marred by accounting scandals, its demise discouraged firms from pursuing public listings for nearly a decade.

However, interest in IPOs has resurged, sparked by the recent flotation of MHA, the UK and Ireland arm of the Baker Tilly International network. Listing on London's AIM market in April 2025, MHA chose an IPO over private equity, raising $98 million by selling a 36% stake. The firm's stock has since risen 24%, providing tangible evidence that public market capital can offer meaningful growth potential.

Rakesh Shaunak, CEO of MHA, highlighted the strategic advantages of being publicly traded, particularly the freedom from the short-term profitability pressures typical of private equity firms, which often demand rapid returns. IPOs enable a more flexible approach, allowing firms to prioritise long-term strategic goals like technological investments and international expansion, demonstrated by MHA’s recent acquisitions in Cyprus and Greece.

This successful IPO has prompted other firms to reconsider public listings as a credible alternative to private equity. Julian Morse, co-chief executive of Cavendish, the investment bank that advised MHA, stated that more accounting firms are now actively weighing IPOs.

Private equity had been dominating mid-market accounting firms, particularly in the US, where significant investment by major private equity groups has reshaped the sector. Firms like Citrin Cooperman recently transitioned from one private equity owner to another, marking a critical moment where the limits of this ownership model became clear. Allan Koltin, a respected advisor in the American accounting sector, anticipates multiple mid-sized US firms will soon explore IPOs as viable exits from private equity.

Indeed, Hellman & Friedman, a leading private equity firm owning Baker Tilly US, recently indicated that an IPO would be its preferred exit route. Following Baker Tilly's acquisition of Moss Adams, the combined entity has become one of the largest firms in the US, heightening anticipation around potential public offerings.

However, regulatory scrutiny remains an important consideration. Accounting firms providing audit services must maintain independence and ethical integrity. Bodies such as the Institute of Chartered Accountants of Scotland have expressed concerns about the potential conflicts of interest arising from different ownership structures, including public listings.

The Financial Reporting Council, the UK's regulator, echoed these concerns, emphasising the inherent risks associated with changing ownership structures. It remains vigilant, particularly regarding firms with substantial audit practices.

Despite these cautions, the momentum towards public markets seems robust. Proponents argue that public listings provide greater transparency and financial flexibility than private equity. Additionally, being publicly traded offers diversified investor bases and strategic latitude that private equity ownership often lacks.

Nevertheless, doubts persist, grounded in memories of past public market failures like RSM Tenon. Rob Donaldson, CEO of RSM UK, remains sceptical, suggesting the partnership model could ultimately prevail, given its historical resilience and stability.

What's Next

The next few years will be decisive for the accounting industry. Firms considering IPOs will need to navigate regulatory complexities and investor expectations carefully. As more accounting firms test the waters of public markets, the success or failure of these early movers will significantly shape the industry's strategic direction, potentially redefining the conventional partnership model forever.