Interpath Advisory commences life as independent business

Having rebranded in March, the former restructuring practice of KPMG UK is formally launching as an independent firm. Private equity-backed Interpath Advisory becomes the UK’s largest privately-owned restructuring unit.

Blair Nimmo, who headed KPMG’s restructuring wing before the buy-out, commented, “This is a significant moment for our business, and comes at a time when business leaders, boards and stakeholders are grappling with a myriad of issues, from overcoming financial and operational stress and distress, to recovering and protecting value.”

“As an independent, conflict-free business with an experienced team at the helm, we will have the freedom to anticipate and react to the challenges faced by our clients with even greater agility. We’ve already had an overwhelmingly positive reaction to news of our sale from our clients and our people, and we are looking forward to hitting the ground running.”

KPMG’s decision to sell its lucrative restructuring business was driven by the significant changes in the insolvency and restructuring market in the UK. With the nation’s audit watchdog the Financial Reporting Council (FRC) having issued a de facto ban on the Big Four of KPMG, Deloitte, PwC and EY from conducting advisory work for audit clients, the quartet were left worried that the issue would inhibit the future growth of restructuring operations for as long as they are owned by them – even as the demand for restructuring continues to spike across Britain.

In the end, KPMG cashed out in early 2021, having brokered a £400 million carve-out backed by H.I.G. Europe, the European affiliate of investment firm H.I.G. Capital. At the time, it was announced that what would become Interpath Advisory would be led by KPMG UK’s top restructuring partners.

Now it has been confirmed that in line with this, new CEO Nimmo will be joined by Will Wright and Mark Raddan on the firm's board, having collectively led this transaction for over one year.

Raddan remarked, “We would like to thank KPMG for their full support throughout this transaction, and we part as firm friends. Moving forward with H.I.G.’s backing and our team of extraordinary people, we’re looking forward to continuing to help organisations large and small navigate the challenges ahead and ultimately, help them find their right path.”

Now, according to comments Nimmo made to the Financial Times, the firm will look to “settle” in the coming months, before “we will crack on and pursue that growth,” involving a mixture of hiring individuals and teams from other firms as well as buyouts.

However, the size and scale of KPMG means the move has already created the largest independent corporate turnaround firm in Britain. Interpath Advisory carried over some 22 partners and circa 528 staff to its operations initially, and at launch 19 of those staff have been promoted, meaning it moves forward with 43 Managing Directors.

As the firm looks to make a strong start to its independent life, news has also broken that John Connolly, former CEO of Deloitte UK and Chairman of the Deloitte Global Board of Directors, has been appointed Chairman of the Board of Interpath. He arrives having chaired a number of PE backed companies, currently including G4S.

Connolly said, “In the highly complex markets which will face many companies in the years ahead Interpath is strongly positioned to support businesses with its broad range of skills and deep experience. The team are highly motivated to build the business as an independent company creating a position of distinction in its chosen markets.”

Deloitte itself was rumoured to be mooting a sale of its restructuring wing in late 2020. While the firm’s global leadership initially vetoed the move, the continued saga took another turn in February 2021, when public relations advisory Teneo was tipped to be on the verge of purchasing the practice for “hundreds of millions of pounds.”