KPMG in talks to sell pensions unit to private equity house

James Phillips reports...

KPMG has confirmed it has entered into exclusive talks with Exponent Private Equity to sell its pensions advisory unit.

The audit and advisory firm said it is proceeding with a “view to progressing a sale” of the circa £200m business, which advises on pension assets worth more than £50bn.

The sale comes amid a wider restructuring of the big four auditor after the competition watchdog earlier this year called for a shake-up of operations, with audit and consultancy work due to be split into distinct businesses.

KPMG said: “Following significant interest in our market-leading pensions practice, we can confirm we have entered into exclusive talks with Exponent with a view to progressing a sale.”

The firm said it would not comment further while negotiations continued.

KPMG has been seeking a buyer for the pensions advisory arm of the business since at least June, when Sky News reported a number of businesses had expressed an interest in the purchase.

Exponent is the current owner of discount website Wowcher, daily newspaper The Racing Post, and sightseeing organiser Big Bus Tours. It has also previously owned vegetarian food producer Quorn.

Last year, KPMG UK chairman Bill Michael banned the firm from taking on consulting work for companies where it already provides audit work.

In its review of the audit market earlier this year, the Competition and Markets Authority said poor-quality audit work could “risk people’s jobs, their pensions, and their savings”, noting, in particular, the collapses of BHS and Carillion.

As well as calling for the division of the audit and consulting businesses, it made a number of recommendations, including introducing a “mandatory joint audit” where challenger firms worked alongside the big four and are jointly liable for the results.