KPMG’s revenues boosted by private equity work

Auditing and consulting giant KPMG Europe has witnessed a 20 percent rise in revenues from its private equity practice in the year to September 30, according to the firm’s 2010 annual report. The firm billed €130 million from private equity clients during the 12 month period.

The firm captured greater attention from its private equity clients as a result of increased deal competition in the industry and less opportunity for financial engineering, the firm stated in its 2010 annual report. The shift in strategy meant GPs gave greater focus to portfolio companies’ operational improvement, a strategy KPMG offers advisory services on.

Some notable transactions the firm has played part in include Kohlberg Kravis Roberts’ January acquisition of Pets at Home, a UK retail chain, for £955 million (€1.1 billion; $1.5 billion) from private equity firm Bridgepoint; and the £2 billion sale of RBS’s WorldPay business to Advent International and Bain Capital in August.

“While the private equity industry is feeling optimistic that deal volumes will continue to grow in 2011, there has been a fall off in distressed asset sales and accordingly asset prices remain high,” said Rustom Kharegat, head of private equity at KPMG in an email exchange. “The disparity between buyer and seller price expectations resulted in some deals falling over in 2010 and this is likely to continue into 2011.”

KPMG Europe reported total turnover of €4.06 billion for the year, an increase of 16 percent compared to 2009 (€3.5 billion). However, on a like-for-like basis, accounting for the firm’s recent mergers and expansion, revenues for 2010 were  €4.3 billion, a three percent decline on the prior year.

KPMG Europe, operates in 16 countries across the greater European region, most recently admitting partners in Norway and Saudi Arabia under the umbrella last month.