long-term incentives remain a challenge.
by 卡塔尔世界杯常规比赛时间 research
for some reason the advent of private equity and other alternative investment in cpa partnerships isn’t receiving much media attention though it is quickly setting in motion an extensive overhaul of the traditional partnership structure.
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asked what they expect to see in the next 12 months, several experts opining in the rosenberg national survey of cpa firms statistics identify increasing outside investment in cpa firms and consequent new business models.
gale crosley, at crosley+consulting, is one who sees a major upheaval in the offing.
“our homogenous profession consists of firms with similar ownership and governance structures and business models,” crosley writes. “looking forward we’ll see an increased variety of approaches. many will look more like the corporate world, where ownership is not just in the hands of equity partners. governance structures will include a c-suite of non-cpa players.”
greater pressure on traditional firms
matt rampe, with the rosenberg associates, says, “private equity investments will continue at large- to midsized cpa firms. investors will make their capital deployed productive through transforming their portfolio companies (e.g., acquisitions, technology, hiring), putting greater pressure on traditional firms to compete.”
marc rosenberg himself says “private equity is showing signs of trickling down to sizable local firms in the $15-30 million range.”
terry putney, at transition advisors, isn’t so sure private equity will work out. some observations indicate maybe, others maybe not.
“the private equity model is still unproven in the minds of many cpa firm partners as there are no examples of a secondary market for the investors of cpa firms,” putney explains. “private equity investors in other professional disciplines like veterinary, dental and engineering have experienced success with attracting secondary and tertiary investors. until we see that happen in
accounting, there will remain some skepticism about the viability of this business model. it is not my skepticism. but accounting firms that are considering private equity are expressing that as one of their concerns.”
putney also brings up the very valid concern about how the private equity-backed model will work for the next generation of leaders who didn’t benefit from the initial investment. today’s leaders will have to create long-term incentives.
carrie steffen, at the whetstone group, sees private equity first changing the ownership structure, then splitting practices into distinct entities that focus on target markets and deeper specialization.
complicating the issue, she says, is a crackdown on audit deficiencies by the private company accounting oversight board just as the profession starts considering lowering standards for cpas so that more students go into a career in accounting.
one response to “private equity leading to corporate-style cpa firms”
frank stitely
i’m curious what their roi is going to be. we saw something similar in the 1990’s with private rollups like amex. they ultimately didn’t work because the roi wasn’t enough.