Ever since the rise of the big agency networks, being “an indie” has had a certain David v Goliath cachet.
But the past five years have changed the landscape. Network groups have cooled on acquisitions. In their place, private equity (PE) firms have moved in… fast. Bringing capital, expectations and, in the main, a very different kind of independence.
Short-term returns, long-term compromises
PE investors don’t typically think like the networks of the past 20 years. Where a network might have been happy with a 10–20% return, PE houses tend to work to five-year cycles. They expect to at least triple or quadruple their initial investment before exiting. That means steady organic growth won’t cut it. They’ll look to drive revenue through bolt-on acquisitions and cut costs aggressively.
This isn’t necessarily a bad thing. PE funds offer founders a route to exit and realise the value they’ve built – something the industry has long lacked. But let’s be clear: agencies with PE backers are no longer as “independent” as they once were. As far as I can see, their operating models, incentives and values shift from the moment the investment closes.
PE firms typically look for scalable IP, reliable income and operational leverage. That’s not most agencies. Indie values – creativity, culture, talent development – only survive under PE when they serve the short-term value equation. And that’s rarely the priority.
A cooling market and a looming gap
PE interest in the UK marketing sector only really took off in 2021. Some early investments have been success stories. But we’re still in the early stages, with few exits and no clear picture of long-term impact. Whether the model benefits the industry over time is still an open question.
Meanwhile, the wider PE market has changed. According to Bain & Co’s Global Private Equity Report, the total value of PE deals rose by 35% in 2024 – but almost all of that was driven by exits, not new capital. New fund inflows dropped by 23%. The era of endless dealmaking may be stalling.
If agencies start to lose their shine for PE investors, that leaves a gap. Who steps in? With fewer buyers, some founders may face messy exits or declining valuations.
Time for new models of growth
But the industry has always adapted. Talent flows back into start-ups, clients follow the talent, and founders go again. This could be a strong moment for agency leaders to break away and rebuild and for existing indies to scale by focusing hard on clients.
New financial tools may also support them. This month, the UK government is launching PISCES (Private Intermittent Securities and Capital Exchange System), backed by the London Stock Exchange. It aims to help smaller businesses, including agencies, attract capital while retaining control.
On its own, this might just streamline angel investors' work. But paired with the Mansion House Accord – which commits large UK pension funds to significant domestic investment – it could create a meaningful alternative. One where founders can take some money off the table without giving up their independence.
Either way, how agencies are valued, bought and sold is shifting again. What the landscape looks like in five or ten years is anyone’s guess.
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