New Partnership Structure Emerges
RSM’s US and UK leadership have established a new transatlantic partnership that offers member firms across the global accounting network an alternative to private equity investment, according to reports. The agreement between RSM US and RSM UK creates a unified leadership structure with Brian Becker, chief executive of RSM US, heading the combined entity.
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Expanding Investment Capacity
The partnership will reportedly allow greater cross-border investment and help the firms compete more effectively against larger rivals. Sources indicate the structure was specifically designed to accommodate additional member firms from the global network seeking capital for expansion., according to according to reports
“A lot of member firms need the capital to build consulting, advisory or other services, and we have the capital together to do all the investments that we need,” Becker told the Financial Times, according to the report.
Open Door Policy for Member Firms
Rob Donaldson, chief executive of RSM UK, emphasized that the arrangement isn’t exclusive. “We don’t want them to think this is some closed arrangement that they can’t participate in if they wish. The door is open. It is an alternative to outside investment,” he stated in the report.
The partnership comes at a time when rival accounting networks including Grant Thornton, KPMG and BDO are also consolidating member firms, analysts suggest.
Scale and Regulatory Considerations
The transatlantic deal combines RSM US, which reportedly generated $4 billion in revenue with nearly 17,000 employees, with RSM UK’s approximately £600 million revenue and 5,400 staff. The partnership will account for roughly half of the $10 billion in annual revenue reported by RSM International network., according to related news
The structure reportedly addresses regulatory concerns about maintaining local control of sensitive audit operations while avoiding complications from integrating UK partners into the complex US tax system., according to related coverage
Strategic Objectives and Future Possibilities
Codenamed Project Bamboo for its “fast-growing, flexible and resilient” qualities according to sources familiar with the process, the partnership will establish a combined leadership board that dictates compensation and profit-sharing arrangements while directing funds toward new investments.
“The big picture objective is to drive more collaboration, better client experience and more talent opportunity,” Donaldson stated in the report.
While RSM member firms have resisted private equity investments thus far, neither executive ruled out external capital in the future. Donaldson noted that “there’s been more change in our profession in the last five years than in the previous 25 years, so who knows what happens next?” adding that a significant acquisition might require private equity partnership.
Becker reportedly suggested that a stock market flotation could eventually become an option, stating they were “keeping our options open” regarding future capital strategies.
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References
- http://en.wikipedia.org/wiki/RSM_US
- http://en.wikipedia.org/wiki/United_Kingdom
- http://en.wikipedia.org/wiki/2011_San_Marino_and_Rimini_Riviera_motorcycle_Gr…
- http://en.wikipedia.org/wiki/Accounting_network
- http://en.wikipedia.org/wiki/RSM_UK
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