Pemba Capital snares stake in Rennie Advisory consulting business
Pemba Capital Partners has taken a 40 per cent stake in independent consultants Rennie Advisory, deepening ties between private equity interests and the professional services sector.
Pemba’s move comes after buyout firm Allegro acquired PwC’s Australian government services arm for $1 in July, and another consultancy, Alvarez & Marsal, poached dozens of partners from big four rivals this year. PwC’s entanglement in a tax leaks scandal has stirred opportunities for buyout shops to pounce on the fragmented consulting industry.
Matthew and Simone Rennie have sold their consulting business to Pemba Capital Partners. Louise Kennerley
Spouses Matthew and Simone Rennie founded the business in May 2021. The pair, who declined to disclose the value of Pemba’s investment, will retain a 60 per cent stake but will become new partner-level employees.
Simone Rennie said she hoped to grow staff count to approximately 300 people from 40 in the next four years. It has offices in Brisbane, Melbourne, Perth and Sydney.
Rennie, which competes with the big four and global consultancies like BCG and McKinsey, wanted a greater share of consulting services for companies adapting to the energy transition. It has five service areas comprising company strategy, capital advice, sustainability services, policy and reforms and a business advisory arm.
Its capital arm is one of the fastest-growing segments in the business because companies sought funding, along with ways and means to deploy it, in transitioning to net-zero emissions, Ms Rennie told The Australian Financial Review.
“You’re seeing pressure from shareholders, customers, insurers and the supply chain … there’s a lot of work to be done to help businesses navigate that change,” she said.
Matthew Rennie said markets would be impacted by “two waves” over the next 25 years. One was the transition of government and corporate policies to avoid the physical risk of climate change. For example, advising clients on transitioning to cleaner fuels, energy and change in heavy carbon-emitting industries such as mining.
“That is the underlying premise of the business. Advisory firms need to be platformed to meet that demand,” the ex-EY partner said.
The second was the physical risk of climate change itself, and how it shifted clients’ businesses.
“It will change the basis on which things are funded, companies’ customer bases, where things are grown and where the wind blows. It will change the fundamentals of economics in the next 30 years,” he said.
Project Renew
Dubbed Project Renew, the investment in Rennie fell under Pemba’s business services arm. Tom Matthews, a managing director at the investment firm, said experience with infrastructure adviser ConnellGriffin, another Pemba portfolio company, benefited the Rennie transaction. Pemba has not ruled out supporting Rennie through potential bolt-on acquisitions and global expansion.
“This is not a knee-jerk reaction to what has happened in the last 12 months. It is core to our investment strategy,” Mr Matthews said with a nod to the PwC scandal and EY’s botched attempt to split up its businesses.
“[Rennie] operates in a high-growth market. It is a niche we’ve been tracking for over two years. Demand is only just getting started.”
Pemba, which has raised more than $2 billion, will take a seat on the five-person board alongside the Rennies, and three other yet-to-be-determined directors.
Law firm McCullough Robertson advised Rennie, Pemba appointed MillerPrince as legal counsel, while Grant Thornton worked on financial and tax matters.
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