Will private equity set its sights on accounting firms after the Baker Tilly deal? (2024)

Will private equity set its sights on accounting firms after the Baker Tilly deal?

Some industry insiders believe the Baker Tilly deal will mark a step change in PE investment in accounting and in professional services more broadly. Baker Tilly faces challenges common to many professional services firms. It has a steadily growing and profitable business, but is also capital-constrained.

How long do private equity firms keep companies?

Private equity investments are traditionally long-term investments with typical holding periods ranging between three and five years. Within this defined time period, the fund manager focuses on increasing the value of the portfolio company in order to sell it at a profit and distribute the proceeds to investors.

Why are PE firms buying accounting firms?

There are reasons why CPA firms have become a popular investment for private equity: Individuals and businesses rely on their accountants in good times and bad, clients are extremely loyal, and the breadth of services CPA firms can offer continues to grow.

Did RSM take over Baker Tilly?

Following the purchase of RSM Tenon in April 2014, Baker Tilly became a member firm of RSM Global having served notice on Baker Tilly International, the international network to which it previously belonged.

What rank is Baker Tilly?

What is the average return of a private equity firm?

According toCambridge Associates' U.S. Private Equity Index, PE had an average annual return of 14.65% in the 20 years ended December 31,2021. In comparison, theCambridge Associates U.S. Venture Capital Index found that VC returns averaged 11.53% in the same 20-year period.

What is the lifecycle of a private equity company?

Although every deal is different, the life cycle for most private equity (“PE”) investments follows a similar path: (i) invest/acquire (ii) build, manage, enhance; and (iii) exit.

Is CPA good for private equity?

Private equity is rapidly reshaping the public accounting landscape, with projections indicating that 20% of CPA firms may be private equity-sponsored in the near future. Private equity firms are targeting CPA firms ranging from $10 to $50 million in size, injecting cash for aggressive growth strategies.

What private equity firms are buying CPA firms?

In 2021 and 2022, PE firms bought stakes in EisnerAmper (18th largest by revenue), Citrin Cooperman (23rd), and Cherry Bekaert (26th). Then in February, Hellman & Friedman and Valeas Capital Partners bought a reported majority stake in Baker Tilly (10th largest).

Can accountants get into private equity?

Some firms hire accountants with specialized skills, such as investor reporting, tax planning, or forensic accounting experience. Private equity firms often focus on specific segments of the market, so prior experience with a particular industry may also be useful.

Is Baker Tilly growing?

The global accounting network said Thursday it has grown its global revenue by nearly 30% since 2020 to reach record levels last year. On a regional basis, Europe grew at the fastest rate in 2023 at 17% in U.S. dollar terms, followed by Latin America (16%), North America (11%) and Asia-Pacific (3%).

Why did Baker Tilly CEO resign?

Alan Whitman, chairman and CEO of Baker Tilly US, resigned after disagreeing with the firm's other top leaders on how to advance an aggressive and unique business strategy.

Why work with Baker Tilly?

At Baker Tilly, our purpose is to unleash and amplify the talent of our amazing team members. We foster an environment that allows our people to discover their strengths, sharpen their skills, deepen their knowledge and explore possibilities as they soar to new heights at our firm.

How much is Baker Tilly worth?

Baker Tilly International is a consulting and public accounting firm. It is currently the 9th largest accounting network in the world by revenue with 43,000 people in 700 offices across 141 territories with combined global revenues of $5.2bn.

Does Baker Tilly have unlimited PTO?

One of the many benefits of working at Baker Tilly Digital is the unlimited PTO.

How many people work at Baker Tilly?

What is a good IRR for private equity firms?

The hurdle rate is the lowest IRR that an investment must obtain to justify the risks involved. Given the illiquidity of their investments and risks, PE investors frequently set a specific threshold for projected returns — typically 20% or higher.

Is private equity a good career?

A role in private equity is a very competitive yet rewarding career path. Getting started in a profession in private equity (PE) requires strong analytical and networking skills to jumpstart a career at a PE firm.

Does private equity beat the S&P 500?

The top 3 private equity stocks have outperformed the S&P 500 by 9.6% over five years. And they're cheap right now too.

How long do people stay in private equity?

What is the timeline of a private equity deal?

Is there work life balance in private equity?

Work-life balance is a challenge for many professionals, but especially for those in private equity (PE). PE is a demanding and competitive field that requires long hours, frequent travel, and high performance under pressure.

What kind of CPA makes the most money?

Is private equity a risky job?

Private equity funds are illiquid and are risky because of their high use of debt; furthermore, once investors have turned their money over to the fund, they have no say in how it's managed. In compensation for these terms, investors should expect a high rate of return.

Is it harder to get into private equity?

Yes! Private equity is one of the most competitive jobs to get – period. Not just in finance, but across the board. Private equity firms have very specific requirements for their hire candidates, both for entry-level analyst positions and for higher-level job openings.