Andersen Group – a beneficiary of bureaucracy and box-ticking culture

Taxes, compliance requirements and regulation mostly move in one direction – up.

The US tax code contains 3.4m words and has more than tripled in size since 1975.

That's not even to mention all the ancillary paperwork, such as the growing amount of compliance work required for banking relationships.

The increasing complexity of taxes and regulation is not limited to the US – it is a global phenomenon.

Andersen Group is quietly benefiting from this trend, and its stock has more than doubled since listing half a year ago.

"Wait, THAT Andersen?"

Until the early 2000s, Arthur Andersen LLP was widely known as an American accounting firm providing auditing, tax advisory, consulting, and other professional services to large corporations.

It was one of the "Big Five" accounting firms, alongside Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers.

In the late 1990s, the firm's fast-growing consulting arm was separated. Following a long-running internal dispute and legal proceedings, that business ultimately became fully independent. After a 2001 rebranding from Andersen Consulting to Accenture (ISIN IE00B4BNMY34, NYSE:ACN), it has since grown into a publicly listed global giant.

The remaining core business of Arthur Andersen did not fare as well.

In 2002, the firm was heavily implicated in the fraudulent collapse of Enron, the Houston-based energy trading company. Its role in enabling Enron to report fictitious revenues of USD 100bn led to clients and partners deserting the firm en masse. The US government subsequently charged the firm with obstruction of justice for shredding documents related to its audit work.

Although the conviction was later overturned by the Supreme Court, the damage had already been done. By that time, Arthur Andersen had shrunk from 28,000 employees to 200. The government chose not to pursue a re-trial, as there was effectively nothing left of the firm.

Many former employees and partners went on to establish new firms. One such group began operating under the name Wealth & Tax Advisory Services (WTAS), a name previously used within Arthur Andersen. Initially, it had just 23 partners.

Fast forward to 2025, and WTAS had grown substantially and acquired the rights to the Andersen brand. While Andersen Group is not a direct successor to Arthur Andersen LLC, it chose to leverage the legacy brand to benefit from over 100 years of strong recognition and perceived technical excellence. In 2014, it acquired the brand from a defunct entity.

Seemingly, the strategy worked.

Despite a relatively low-profile IPO that attracted some criticism, the stock has more than doubled to USD 34 since listing at USD 16 in December 2025.

What has driven this performance, and can it continue?

Helping wealthy clients stay compliant

Today, Andersen Group is one of the leading US providers of independent tax, valuation, and financial advisory services. Its clients include high-net-worth individuals, family offices, businesses and institutional investors.

The company operates across four main areas:

• Private client services (~50% of revenue): advisory services to families and family offices, including multigenerational wealth planning, charitable giving, and trust and estate planning.
• Business tax services (~35%): integrated tax related consulting and compliance services for businesses.
• Alternative investment funds (~10%): fund structuring, accounting and administration.
• Valuation services (~5%): independent valuation analyses.

Crucially, the firm does NOT provide auditing services. The business line that contributed to Arthur Andersen's downfall has been deliberately left out, which brings some notable advantages. Besides enhancing independence, this also decouples the firm from auditor independence restrictions, giving it a clear differentiation and (at least in some regards) competitive advantage relative to the Big Four. It also saves a heck of a lot of money for indemnity insurance.

Never mind the company's evident focus on delivering high-quality services and real value to its clients. Based on the metrics published by the firm, Andersen Group appears to be excelling due to:

• A genuinely service-led culture, where clients have significant facetime with partners and managing directors.
• Strong loyalty among managing directors, meaning clients can typically work with the same advisor for many years.
• As a result of the first two points, strong client loyalty as well. Nearly three-quarters of revenue is generated from clients that have been with the firm for more than three years.

Typical clients are principals of family offices, private equity funds, and trusts.

Everyone knows that taxes, compliance, and admin work are only ever increasing. The principals of Andersen Group recognised that this provided the right backdrop to take the company public as a growth play on professional services.

Rallying share price despite criticism

In December 2025, Andersen Group raised USD 176m of growth capital from an IPO led by Morgan Stanley and UBS.

The Wall Street Journal was not among the cheerleaders for the listing. In a 29 December 2025 article, it claimed: "Andersen's IPO Makes It Hard for Investors to See Straight".

The newspaper advised that "anyone thinking of buying the stock should be sure to read the fine print. … The professional-services firm, which specializes in tax and accounting services, has a complex corporate structure that gives priority to pre-IPO insiders over public shareholders. It has disclosed having weak internal accounting controls, which is no small irony. And the business model, which relies primarily on hourly billing, could be vulnerable to disruption by artificial intelligence. "

Indeed, Andersen Group has an unusual corporate structure. It is a holding company with just a single significant asset: an 11% stake in a partnership called AT Umbrella. Insiders (= partners) own the remaining 89% through a holding company called Andersen Aggregator. What's more, insiders control 99% of the voting rights in Andersen Group, the listed equity.

However, such a structure is not all that unusual and is designed to optimise taxes. If you aren't yet familiar with the increasingly popular Tax Receivable Agreements (TRAs) that underpin quite a few US IPOs, you can read my 14 November 2025 article "Tax Receivable Agreements – an emerging asset class?"

That article also highlights the mind-boggling complexity of today's financial and regulatory environment. Helping clients navigate both the challenges and opportunities created by this complexity is Andersen Group's core business.

Still, The Wall Street Journal wouldn't have any of it. Pointing to the firm's disclosure about weak internal accounting controls – one of the areas Andersen Group advises clients on – it described the situation as a reminder of "the old proverb about the shoemaker whose children go barefoot."

Never mind the potential threats posed by AI, which could theoretically complete in minutes work that once took consultants weeks. Right?

So far, the market appears to think otherwise.

The factors that have driven the share price to more than double its IPO level include:

• The prospect of cross-selling multiple services within its existing client base – effectively growing revenue without signing up new clients.
• Using AI to reduce costs on more routine tasks and free up consultant time for higher-value, more complex work.
• Opportunities to grow market share in the US and internationally, given that these advisory markets remain highly fragmented while clients increasingly demand one-stop solutions.
• Plans to use the shares as currency for acquisitions.

Despite the structural questions and other concerns, the market – for now at least – seems willing to give the company the benefit of the doubt. This does not seem unreasonable, given that WTAS / Andersen Group has delivered average revenue growth of 15% p.a. over 23 years, alongside average net income growth of 24% p.a. over the past 16 years as a private company.

With 300 partners, 2,500 employees and several tens of thousands of professionals across partner firms, Andersen Group has reached meaningful scale, but it remains a minnow relative to the overall industry. Globally, consulting of this type represents a total addressable market of nearly USD 500bn, compared to Andersen Group's annual revenue of around USD 700m. As a listed entity with scale and a valuable acquisition currency, it is now well positioned to pursue inorganic growth.

And to mention it once more, all of this benefits from a structural tailwind: the world is drowning in ever more regulation, compliance, and paperwork. As the firm puts it in its investor presentation, an "increasingly complex operating environment creates greater financial and operational uncertainty".

Put another way, rising tax, compliance and regulatory burdens are likely to drive organic demand for the firm's services. Add a sprinkle of inorganic growth, and Andersen Group may be able to sustain double-digit growth for many years.

2026 guidance and broker target

The company last reported in March 2026, when it released Q4/2025 results alongside guidance for 2026.

As house broker UBS noted in an 18 March 2026 report:

"… earnings report delivered a strong Q425 BEAT with +19.6% YoY revenue growth + 2026 guidance that is well above Street. The outperformance was driven by new customer wins, higher volume and new offerings. … 2025 saw adj. EBITDA ~$226.3m as we saw margin expansion ahead amid operating leverage + AI gains. …. Q425 reinforces our view Andersen is well positioned to continue expanding its long- tenured MD-led business model with ~13% ORGANIC revenue growth. ….. 2026 guide–well above Street–revenue $955m-$970m [UBSe/St: $930.0m/ $928.7m] + Adj. EBITDA: $213-$220 [UBSe/St: $170.0m/$203.7m]. …. We see this benefiting long-term positioning supported by ~$496b TAM + international expansion. AI–is a lever enhancing efficiency + scale, supporting Andersen's ability to grow client engagements. …. Buy and raise our PT to $32PT [from $28PT] based on ~12x 2028E EV/EBITDA [from ~13x] as we roll forward. Multiple compares to CRAI, FCN, + HURN ~13x avg."

Just four weeks later, the stock had not only reached but surpassed UBS' price target.

Andersen Group.

It may now be too late to jump on the bandwagon – or perhaps this could become a long-term compounder. After Accenture listed in 2001, its share price rose steadily from USD 15 to USD 415 over the following two decades. Even after its share dropping to currently USD 180, the company is still worth a staggering USD 110bn.

Accenture.

Could the newly listed Andersen Group pull off something similar?

As always, you be the judge.

If you'd like to dig deeper, feel free to get in touch for a copy of the January 2026 initiation report, where UBS explores the firm's industry expertise in detail across 26 pages.

I'm off to tackle my latest compliance paperwork…

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