Ascend CEO challenges traditional private equity model

The CEO of private equity-backed Ascend, which has invested in three regional accounting firms this year, says he operates in opposition to the “big-to-big” model of large private equity firms pouring capital into large accounting firms.

“What private equity is generally doing ­– and this is what they do in any industry – is they look for a big business with scale that they can invest in that has a leadership team that they can back,” CEO David Wurtzbacher said in an interview with INSIDE Public Accounting (IPA). “And the private equity firm’s role is to sit in the ivory tower and call some plays down every now and then.”

While these large private equity firms are good at developing budgets, arranging debt financing and analyzing financial statements, “they don’t really care about the people,” he says. “They’re just looking to squeeze out a return for themselves.”

Wurtzbacher, who says he is fascinated by essential professions that are considered boring, such as accounting and dentistry, spoke with IPA about why he believes his firm’s model is different. He also discussed the goals of Ascend, which is backed by private equity firm Alpine Investors.

So far, Ascend has invested in the non-attest businesses of Vancouver, Wash.-based Opsahl Dawson, San Antonio-based ATKG and IPA 300 firm LMC of New York (FY22 net revenue of $19.2 million). Wurtzbacher says he is targeting additional entrepreneurial firms with revenues of roughly $10 million to $50 million that concentrate their services within one region. His goal is to add five more firms in a year and 25 cities in five years, all while focusing on the employee experience.