Pitch. Win. Exit? How private equity is reshaping the agency model

The advertising industry has entered a new phase, increasingly dictated by private equity (PE) firms. Once the domain of holding companies and independent ownership, agencies are now valuable investment assets. This growing wave of acquisitions raises questions about the balance between financial efficiency and creative independence. What does this mean for the future of the industry, and how will agencies navigate this shift?

The changing face of agency ownership

For decades, the traditional brand-agency relationship thrived on stability, but recent years have exposed its volatility. High client turnover and dependency on large contracts make agencies vulnerable to abrupt revenue fluctuations. Amazon’s move from Interpublic Group’s Initiative to Omnicom Media Group (OMG) and WPP is a prime example—such shifts can upend entire agency structures, forcing layoffs and restructuring on a massive scale.

This unpredictability has led independent agencies to reconsider their options. Selling to a holding company, once the favoured exit strategy, has become less attractive. Post-acquisition, agencies often face cultural dilution and workforce reductions as holding groups consolidate overlapping functions. In response, PE-backed deals have emerged as an alternative, offering financial stability while allowing agencies to maintain their identity and autonomy—at least to an extent.

A surge in private equity deals

This trend is not isolated. Over the past three years, PE firms have rapidly expanded their presence in the marketing and media sectors. According to advisory firm Ciesco, private equity accounted for 38% of all media and marketing deals in 2023. This surge underscores a fundamental shift in agency financing, with firms increasingly seen as strategic investments rather than creative enterprises.

Some recent acquisitions of note include:

• RGA: Acquired by Truelink Capital in March 2025, ending its 23-year tenure under Interpublic Group.
• Incubeta: Bought by The Carlyle Group in November 2022, strengthening its global digital marketing reach.
• BarkleyOKRP: Formed in March 2024 through Keystone Capital’s merger of independent agencies Barkley and OKRP, creating a 650-person powerhouse serving brands like Burger King and AMC.
• Ares & XR: Ares Management’s 2023 investment in XR, an advertising workflow platform that enables $150 billion in TV ad spending.
• Blackstone & New Tradition: Blackstone acquired a majority stake in New Tradition, a billboard company controlling iconic locations like One Times Square.

These acquisitions demonstrate how PE firms are diversifying their marketing assets, leveraging agencies as high-margin businesses with recurring revenue streams. More than just financial plays, these investments are shaping the very fabric of the advertising industry.

Why private equity is betting on agencies

Market making—at first glance, the interest of PE firms in advertising might seem purely financial. However, agencies offer more than steady revenue—they provide access to consumer insights, media influence, and strategic positioning. With digital transformation accelerating, the ability to shape public perception has become a critical asset. Consumer data is forward looking. Forward looking allows you to shape markets. PEs are, at their core, market makers.

Influence—KKR’s investment in FGS Global is a case in point. As businesses face heightened scrutiny and navigate complex economic landscapes, the demand for strategic communications has surged. The ability to manage corporate narratives and mitigate reputational risks makes PR and marketing agencies attractive investments. KKR’s co-head of European private equity described the sector as being at a “pivotal point,” emphasising the growing importance of media influence.

Balancing financial efficiency with autonomy

While PE investment brings financial stability, it also comes with expectations. Agencies that once prioritised creative vision must now integrate financial performance metrics into their decision-making. The challenge lies in striking a balance between efficiency and the integrity of the work.

Unlike holding companies, which often impose rigid corporate structures, PE firms typically allow agencies to operate with a degree of autonomy. However, they demand measurable growth and cost efficiency. This shift means that agency leaders—many of whom come from marketing and creative backgrounds—must adapt to a results-driven business model. In some cases, if financial targets are not met, PE firms may replace leadership to maximise returns.

Considerations for agencies exploring PE investment

For agencies contemplating PE backing, due diligence is essential. Not all PE firms operate in the same way, and aligning expectations early can prevent future friction. Key factors to consider include:

• Investment philosophy: Does the PE firm prioritise short-term returns or long-term growth? Will it invest in you, or leave you alone to generate dividends?
• Performance metrics: Are KPIs clearly defined post-acquisition, ensuring creative and financial goals align?
• Redefining the relationship: The traditional brand-agency relationship is outdated. Brand and marketers now must understand new dynamics where they are partners instead of client and service.
• Operational adjustments: Will there be process optimisation, and how will it impact daily operations?
• Cultural preservation: How much autonomy will the agency retain in creative direction and workplace culture?
• Talent retention: Unlike holding companies, PE firms typically don’t have duplication, but agencies must ensure key personnel remain secure. Can your talent work on their portfolio companies and become equity owners?
• Exit strategy: What happens when the PE firm decides to sell its stake, and how will it affect the agency’s trajectory?

The future of independent agencies

As PE firms reshape the agency landscape, independent agencies are probably the ones most impacted—they must evolve to stay competitive, but are unlikely targets for PEs, who will start with larger holdcos who are actively divesting. Some will thrive under PE ownership, leveraging capital for expansion while maintaining their creative DNA. Others may struggle to reconcile investor-driven mandates with their creative ethos. The agencies that succeed will be those that find the right balance between artistic excellence and financial sustainability.

Private equity’s role in advertising is no passing trend—it is a structural transformation that will define the industry's future, the “hybrid in-house” future. One where the client-vendor relationship becomes blurry because sister companies are agency-brand. The question is not whether PE will continue acquiring agencies, but how agencies will adapt to remain both creatively and financially viable in this new reality, or whether or not agencies can evolve to become small PE players themselves.

Humphrey Ho is the CEO of Helios & Partners.