The attractions of private equity, mid-market buyouts, and M&A in professional services

_{Daniel Venn, Partner, and Katie Ballardie, Director, August Equity}

Daniel Venn is a partner at August Equity, where he leads investor relations and helps develop the firm’s strategy. It’s focused on lower mid-market UK deals (£30–60mn enterprise value) and recently closed its £350mn Fund VI, backed by investors from across the US, Asia, and Europe. Daniel previously worked at BC Partners, Ashmore Group, and KPMG.

Katie Ballardie is a director who works on deals in healthcare software and professional services, and with portfolio companies on expansion, M&A, and value creation. She joined August Equity in 2018 from Barclays Investment Bank.

Shaun Beaney, Editor of Preqin First Close, asked them why global investors are interested in the UK’s mid-market, what is an ‘essential service’, and why there’s so much M&A in accountancy and law right now.

Tell us a little about August Equity’s approach to private equity.

Daniel Venn: August at its core is a mid-market, UK-focused investor. We invest broadly in four thematic areas, so we aren’t sector-specific. However, we invest in primary, controlled buyouts in that mid-market space across healthcare, technology, compliance-led business models, and education. There’s an increasingly overlapping Venn diagram where we see these things coming together.

We grow companies using a combination of organic growth – with all the levers that we’ve developed over the years – and strategic M&A to accelerate that growth and provide scale for the platforms.

Is buy-and-build part of the plan for most lower mid-market deals?

Daniel: Historically, it would have been described as a pure buy-and-build strategy. There’s now a greater focus on organic growth. If you roll the clock back a few years, we started looking at slightly different business models. Instead of doing scale-driven, homogenous roll-ups of end-market care delivery businesses, for example, there’s a much more thoughtful organic-growth focus, where you do seven or eight acquisitions that bring scale, but they have to bring organic growth as well. It could be market expansion, some internationalization, additional management support, or cross-selling opportunities. That’s the shift we’ve made. But there's always an element of buy and build in what we do.

What is it about the UK mid-market that’s attracted investors to your new fund?

Daniel: The mid-market in general is attractive. Clearly, there’s the breadth of the opportunity set. The UK is the second-largest market for private equity outside of the US. You’ve got thousands and thousands of SME businesses, founder-owned, founder-managed, opportunities to create platforms from scratch. Alongside that, you get greater exit opportunities. If you create platforms of £25mn at the EBITDA level, your exit window is either to sell to trade, which we always consider, but also to large-cap PE looking for their version of alpha value.

You focus on what you describe as ‘essential services’ and B2B software. What does that mean?

Katie Ballardie: We like markets underpinned by regulatory and compliance requirements, or businesses that can support the operational challenges and needs of other businesses. For example, in healthcare, we’ve got a long history of investing in social care. Some of the biggest challenges for those businesses are around staffing – access to educated, quality staff, retaining them, and then also delivering care of the best quality and in the most efficient manner with the staffing resources that you have.

Therefore, we invested in a services business called Impact Futures, which provides training and apprenticeships to staff in healthcare, to give them a career path and support retention and quality delivery. We also invested in a software business called One Touch, which provides care management software. It’s a testament to our approach of investing in adjacent markets and businesses that address operational and compliance needs.

You previously invested in an accountancy firm, AAB, and you recently bought out law firm Higgs. What’s so attractive about professional services?

Katie: We class accounting and legal, and broader professional services, as essential because they’re not luxuries. It’s required for businesses and individuals to access that sort of support and advice from regulated advisors. What’s attractive about those markets is that they’re very fragmented. For example, there are about 9,000 legal practices in the UK.

Partnership models are traditional in these spaces. Historically, that’s meant people get promoted up to a level and then have to put up a lot of capital to buy into a partnership. They take on a lot of risk. There’s a changing risk appetite among people coming through in that sector, and it’s more difficult to access a loan to buy into a partnership. People have a different set of priorities and a different willingness for that risk and that kind of step up.

Is the classic partnership model of ownership in accountancy and law firms on its way out?

Katie: What we’ve been able to do is invest in AAB and in Higgs to set up structures that enable people to access equity, incentivization, and future proceeds as a result of delivering growth within a business, without having to take on any of that traditional kind of partnership capital and partnership liability risk.

As a result of the really fragmented market, we’re looking to bring together businesses delivering similar clients and similar service lines. For example, if you look at AAB, we made 16 acquisitions, each of which added new regional presence within the UK, gave access to new kinds of clients, brought new skill sets and new specialisms, and enabled us to cross-sell services.

The thing that’s really driving a lot of consolidation in accountancy and law is a huge amount of technological change and adoption. Partnership models historically meant that people were taking profits, so there was less incentive to invest profits back into a partnership for technology. We have the ability to invest in best-in-class systems, bring on board people who have specialist capabilities in building AI to support, and enable people in professional services firms to spend more time on clients, delivering the specialist kind of high-value-add parts of their jobs.

What about legal and regulatory barriers to deals in professional services?

Katie: Regulation is a positive thing because it drives a need for high compliance and high barriers to entry in the sector. One of the things that we can deliver is investment in central services, better technology, and more people for central functions, which helps improve governance and ensure you’re remaining compliant, in line with regulations.

What’s the exit potential for these businesses?

Katie: When we think about AAB on the exit, we had a huge amount of inbound interest from international buyers, particularly US private equity firms. There’s been quite a lot of consolidation in the US, and they are full steam ahead with things. There's been a lot of private investment in these sectors already.

They’re now looking at the UK as a really attractive market to move into. Businesses might be smaller than their average starting point or ticket size, but it's such an attractive sector, and there’s so much opportunity here from a consolidation standpoint. It's also a gateway to Europe and provides access to the broader European market for US investors.

Shaun Beaney is Editor of Preqin First Close. It’s quick, easy, and free to subscribe here.

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Special thanks to Katy Horrocks at August Equity and Lilla Schmikli at BlackRock.

_{The views expressed are the opinions of August Equity, provided as of November 2025. They do not constitute an endorsement, recommendation, or any other advice, and are subject to change. The content does not necessarily express the views of BlackRock, Preqin, or any of their affiliates. August Equity is not affiliated with Preqin.}