Interpath and beyond: The surge of private equity investment in professional services
It was revealed this morning that Big Four giant KPMG’s former restructuring division, Interpath Advisory, was in exclusive negotiations with Bridgepoint to acquire a majority stake in its business, the latest in a string of private equity deals in the professional services sector.
KPMG sold the arm to private equity group HIG Capital in 2021 for £400m. The businesses reported revenue increased in the most recent financial year from £163.6m to £198.9m. But it also had a pre-tax loss of £11m for the 12 months to 28 March 2025.
Mark Raddan, CEO of Interpath, said, “[Bridgepoint]’s investment will empower us to continue attracting exceptional talent and accelerate our expansion into new geographies.”
Charles Welham, partner at Bridgepoint, noted that Interpath is a “differentiated advisory platform” operating in a growing market with significant opportunity for further share gains.
James O’Dowd, CEO of recruitment firm Patrick Morgan, stated that PE firms see an upside in professional services because of “branded advisory platforms with credible heritage, international ambition and a willingness to absorb short-term losses in pursuit of long-term equity value.”
He added, “2026 is likely to be characterised by persistently high pricing for these assets”.
Mergers, acquisitions, and ambitions
Private equity firms have swooped on the professional services sector over the past two years, with a particular focus on the mid-tier accountancy sector.
Cinven bought Grant Thornton UK for a reported figure of £1.5bn in December 2024. As a result of the investment, the firm bucked the sector trend by announcing it would hire 160 new partners over the next two years.
New Mountain Capital acquired a majority stake in its US arm in May 2024 for around £2bn.
Also in the US, Hellman & Friedman bought a majority stake in Baker Tilly. However, its UK and Irish arm, MHA, opted against the trend of PE funding and instead listed on the London Stock Exchange last April.
The surge of interest in professional services firms has even reached the legal sector, as law-based PE funders have acquired some smaller and mid-tier firms.
The professional and business services sector accounts for 12 per cent of the UK’s total economic output, with a collective turnover of £277bn. Many non-cyclical businesses offer reliable workflows and revenue streams, making them a top priority for PE.
A trend that is expected to continue into the new year. “Now is not a bad time to have ownership in a professional services firm,” O’Dowd added.