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Introduction
2025 saw a surge of private capital interest in professional services firms. Will we see that trend continuing through 2026 and beyond?
Consolidation opportunities in fragmented markets, the push to grow non-audit businesses and demand for technology and gen-AI investment are all driving investment activity in the professional services sector.
To get a better insight into what firms really think about external investment, we commissioned an independent survey of 150 equity partners from legal, accounting and consulting firms across the UK.
The results of that survey suggest there is significant interest in external investment amongst professional services firms.
In this report, we take a closer look at:
- the drivers for seeking external investment and how that differs across sectors and size of firm;
- generational differences in attitudes towards private capital; and
- how to navigate some of the unique features of transactions involving professional services firms.
75%of respondents very likely to consider (or already have) external private capital
67%of respondents believe external capital is critical or important for competitiveness
1 The size and sector effect
Investment into the professional services sector has been steadily increasing over recent years. We wanted to understand if firm size and sector impact partner attitudes towards external investment.
Does firm size change perceptions?
Our survey results suggest there is an inverse correlation between size of firm and interest in external private capital investment. Firms with revenues below £25m show the strongest interest, which may reflect tighter resource constraints and more pressing growth priorities. But it is worth noting that of the larger firms (revenues over £500m) who responded to the survey, almost half would consider external investment in the next five years. That suggests significant appetite right across the sector.
As well as providing funding for investment in technology, expansion plans and M&A, a number of respondents cited the insights that institutional investors can bring to delivering M&A strategies and operational efficiency programmes as further benefits of external capital. Just over a quarter of firms would look to private capital to help provide succession planning solutions.
Most of the partners we surveyed recognised the potential value that external investment could unlock with 67% of partners believing that external capital is critical or important for competitiveness.
The perceived benefits of external capital also vary by firm size. Technology investment remains the top priority for smaller firms. Larger firms cited funding for acquisition of talent and pursuing M&A and expansion opportunities as the key reasons they might look to external investment.
Technology is clearly a rapidly evolving and developing area which can be difficult to keep pace with, especially for smaller firms as it requires significant investment.
For many larger firms, building scale – particularly international – remains a key driver for growth. Being able to access external capital provides firms with another source of funding to help them deliver those expansion plans.
Does sector change perceptions?
Across legal, accounting and management consulting we are seeing varying levels of investment activity in the market. We wanted to understand from our respondents whether attitudes toward investment vary across each sector.
The UK legal market opened to external investment in 2012, but private equity activity has largely been focused in the small to lower mid-market to date. It appears that may be changing. Law firm partners surveyed showed the highest interest in private capital of any professional services segment we surveyed.
Appetite also polled strongly in the accounting sector, which to date has seen a number of high-profile deals amongst larger accountancy firms including Grant Thornton, Azets and S&W alongside consolidation of smaller firms.
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