KPMG UK books £115m profit from pensions business sale

KPMG UK made £115m from the sale of its pension business in a private equity-backed management buyout last year, its latest accounts have revealed.

Twenty partners and some 500 staff transferred to the new business, branded Isio, in March 2020 following the sale backed by Exponent Private Equity.

KPMG’s accounts for the year to 30 September 2020 showed the net consideration it received for the sale of the business was £128m, and, adjusting for costs, the final profit was £115m.

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KPMG UK was contacted for comment.

KPMG has since also sold its restructuring business in another private equity buyout, this time backed by HIG. Rival Deloitte offloaded its restructuring arm this year to professional services group Teneo.

There is widespread speculation among those in the sector that more business units could look to break away from the Big Four, attracted by the lure of private equity cash and the desire to escape the conflicts thrown up by other parts of the business such as audit.

KPMG’s accounts showed that the firm’s highest paid partner received an estimated £2.1m in 2020, up from £1.9m the previous year.

However, overall estimated profit for key management was £17.6m, down from £21.3m the previous year. Average partner distribution in 2020 also fell to £572,000, down from £640,000, the accounts showed.

The firm’s chair and senior partner Bill Michael resigned from his roles in February, later leaving the firm, after making insensitive comments in an internal town hall meeting regarding mental health and burnout during the pandemic.

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He was replaced as chief executive by former audit head Jon Holt in April, with Bina Mehta taking on the role of chair.

KPMG UK’s 2020 revenue fell from £2.4bn to £2.3bn, while operating profit grew from £308m to £421m, which the firm said reflected a fall in expenses due to the pandemic.

To contact the author of this story with feedback or news, email James Booth

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