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The US consulting firm Alvarez & Marsal is planning to poach “hundreds” of partners and staff from the Big Four accounting groups in a new push to expand its work on corporate mergers and acquisitions.
Co-founder Bryan Marsal said the firm was “like a hungry dog outside a butcher’s shop window” as it saw an opportunity to capitalise on the upheaval and strategic uncertainty plaguing rivals.
A&M is set to announce on Thursday that it has hired six senior deal advisers from KPMG, including the global head of its integration and separation practice, Preston Parker, who will run a new business at A&M targeting M&A work for US and multinational companies.
A&M has historically been focused on private equity deals, which account for close to 90 per cent of its deal advisory business. Transactions work represents a little over a third of A&M, with the rest of the 9,000-person business focused on giving restructuring and performance management advice. With year-on-year growth of more than 20 per cent in its fiscal year ending October, it is on course to top $4bn in collections, a revenue equivalent, for the first time this year.
The firm said it expected to hire hundreds of partners and staff over the next five years from the Big Four and other rivals to expand Parker’s business doing corporate M&A work such as financial, commercial and operational due diligence and advising companies on tax structures for deals.
Marsal said A&M was appealing to partners and staff frustrated at working within Big Four firms that have large audit businesses. Regulators around the world have been stepping up their scrutiny of potential conflicts of interest between audit and consulting work, and some officials and even accounting firm executives have questioned whether the two sides of the business should continue to be under the same roof.
EY tried last year to split itself completely in two, but the idea faltered amid internal recriminations.
“We find ourselves in a world of massive disruption and that creates opportunity for us,” Marsal said. “If I’m a partner [at a Big Four firm], I worry about how that struggle is going to work out . . . Nothing’s wrong with KPMG, nothing’s wrong with EY. There’s an inherent problem in the industry.”
Parker said consultants at the Big Four firms were finding themselves conflicted out of working on deals involving audit clients.
“If you’re an advisory partner, effectively 25 per cent of the market is no-go for you because of audit relationships, so coming here is like a breath of fresh air.”
A&M has also raided the Big Four outside the US. Last year, it poached five partners from KPMG in Australia, including its private equity head, and KPMG’s UK corporate finance head, plus a 40-strong transactions team from EY in China.
The creation of A&M’s US corporate transactions group is a countercyclical bet, Parker said. The Big Four and other consulting firms have laid off staff to account for the slowdown in M&A activity, unsettling partners in those areas whose teams have been affected.
“We have a belief that the transaction markets [will] come back strong in calendar year 2025, and we’re going to be ready to go and ready to rock.”
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