Kelly Partners Group: Questions to Brett Kelly | Value Bridge

Archieve - Everything Brett Kelly Said

Business Summary

Kelly Partners Group (KPG) is a publicly listed accounting network founded in 2006 and listed on the ASX in 2017. The firm operates a unique 51/49 partner-owner model, enabling enduring partnerships rather than full acquisitions. KPG focuses on accounting firms generating between $2 million and $10 million in revenue, primarily serving private business owners. Since inception, the group has completed more than 80 partnerships with over 88 partners. The company has a strong balance sheet, generating approximately $11 million in net profit before tax, with declining depreciation and interest expenses. Since listing, KPG has delivered a 9.5x return to investors, making it the best-performing publicly traded accounting group globally. In the U.S., the firm established a base in Los Angeles in 2023, with offices in Woodland Hills, Burbank, Malibu, and Newport Beach, while also expanding into Texas, Florida, and North Carolina.

Catalysts & Milestones

2006 - Founded in Australia by Brett Kelly and Rebeca Kelly

2017 - Listed on the Australian Stock Exchange

2023 - CEO relocated family to Los Angeles, initiating U.S. expansion with multiple California offices

2023 - Opened Griffith office in Australia with launch attended by over 300 people

2024 - Added first Florida firm, enabling expansion into Mission Viejo, California

2024 - Texas platform advanced with two firms at term sheet stage, expected $5–8 million revenue potentia

2025 - CEO met Mark Leonard of Constellation Software, reinforcing long-term scalability vision

Investment Highlights

• Since listing in 2017, KPG has delivered a 9.5x return to investors

• Over 80 partnerships completed with 88 different partners since inception

• U.S. expansion in 2023 with offices across California, Texas, Florida, and North Carolina

• Current net profit before tax approximately $11 million, with depreciation heading to zero

• Texas platform forecast to add $5–8 million in revenue by end of 2024
  
  

Future Growth Drivers

• Expansion into U.S. markets including California, Texas, Florida, and North Carolina

• Pipeline of Canadian and UK opportunities aligned with English-speaking market strategy

• Proprietary M&A scouting system with 12 scouts sourcing regional deals

• Development of Kelly Partners Passport platform with potential SaaS subscription model

• Ongoing buybacks at deep discounts to intrinsic value when permitted
  
  

Risk Factors

• Private equity roll-ups may create temporary competition despite inferior models

• High legal and review costs exceeding $1 million impact reported earnings

• Long acquisition cycles, with some deals taking 5+ years to complete

• Dependence on partner alignment; over-promotion risk acknowledged by management

• U.S. regulatory and tax residency uncertainty may affect group structure and returns
  

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Capital Allocation

09/06/2020 Why did you decide to list Kelly+Partners on the ASX in 2017?

It was all about goal-setting. From the beginning, I set out to build a listed holding company, inspired by Warren Buffett and Berkshire Hathaway. I wanted to compound capital over decades by buying and building private businesses, which accounting firms actually are, even if most people don’t think of them that way. When we listed in 2017, we didn’t need the money; it was about transparency, discipline, and setting a new standard in our industry.

Most partnerships pull profits out rather than reinvest, which limits growth. I wanted a structure that retained earnings, built capacity, and inspired talent. Listing meant we could operate publicly and transparently, attracting the best people and showing clients that you can behave well and do well. It was the best way to disrupt an industry that often says one thing and does another.

21/09/2021 Why pay a monthly dividend instead of reinvesting all capital into acquisitions?

It is a great question. If I could ask Warren Buffett one question, it would be whether he would pay a dividend if he ran a company like ours in Australia. My speculation is he would not, but in the U.S. there is no dividend imputation system. In Australia, corporate tax paid by the company passes through as a franking credit, so dividends are very efficient.

Second, we structure acquisitions with debt, not equity. Debt has been historically cheap, and structuring at the subsidiary level aligns us with partners on the transaction. We finance moderately with debt and then aggressively pay it down, so the overall load falls. We do not need to issue shares or raise equity. For our business, this structure makes the most sense.

21/09/2021 Wouldn’t shareholders prefer you reinvest instead of paying dividends?

If holding more capital allowed us to do more deals faster, we might consider it. But we cannot accelerate the funnel of quality firms by keeping more cash. We already have ample capital. Paying a monthly dividend ensures alignment: the 49 percent partner-owners receive their share monthly, and 51 percent shareholders get the same.

That discipline around cash flow is healthy for the business. If a shareholder dislikes dividends, they can reinvest by buying more of our shares. For Australian investors, there is no tax leakage because of franking credits. While international investors face different tax treatment, the current structure works well. We do think about whether long-term it would make sense to list elsewhere, like the U.S., but for now this system is very successful.

08/10/2021 Why does Kelly Partners pay a dividend?

Berkshire Hathaway has never paid a dividend, partly because Warren Buffett believes he can reinvest capital at superior returns, and partly because U.S. dividends face double taxation. Australia’s franking credit system avoids double taxation, passing tax credits to shareholders. That makes dividends far more tax neutral for investors here.

At the operating level, our equity partners own 49%, and at the HoldCo level, external partners own equity. We treat this as a partnership structure. Our partners reinvest 9% of revenue annually, 6.5% into central services and 2.5% into intellectual property. By contrast, competitors reinvest virtually nothing. This reinvestment creates a powerful long-term advantage while still delivering returns nearly twice the industry average. Partners receive strong cash distributions, which creates alignment and satisfaction. At the HoldCo level, we can fund acquisitions without issuing much equity, making our capital structure more efficient and reinforcing the partnership culture.

08/10/2021 Why does Kelly Partners pay a dividend if reinvestment could fund growth?

We respect our shareholders enough to provide a tax neutral dividend. An investor who prefers reinvestment can simply buy more shares. But many shareholders, especially those looking for retirement income, value a consistent dividend. As baby boomers retire, demand for income will grow, and we believe a reputation as a reliable dividend payer will increase our long-term value.

We don’t have fixed views set in stone. We will keep listening and adjusting over time, but our approach is about balancing reinvestment with shareholder return. For now, dividends plus strong returns on equity create the right mix for our investors.

08/10/2021 Will the dividend policy change given 25% of shareholders are international?

It’s possible that over time we’ll reconsider, but right now we believe our approach works. I spoke recently to a shareholder who complained I increased the dividend. I told him the last time someone complained about a pay rise was a long time ago. So bear with us while we make you more money and send it to you in cash.

We are mindful of double taxation for international shareholders, but for Australians, the majority of our base, the franking credit system makes dividends attractive. Our priority is consistency and alignment.

08/10/2021 What is KPG’s funding strategy and hurdle rates for M&A? Why not reinvest all cash?

We usually acquire businesses through a special purpose vehicle with our partners. These are debt-funded, and we require the business to achieve at least 33% EBITDA margins with about 55 days of working capital. Most of the industry runs at 15–19% EBIT, which we think is inadequate for partners bearing risk and personal guarantees. We will never lower our standards.

We target paying down acquisitions in under five years, often four, using cash flow from the acquired business. That allows us to keep paying dividends while still growing. We think dividends plus our return on equity are the best mix. The 2019 slowdown reflected some WIP reversals after IPO. Look at free cash flow over five years and the picture is clear.

08/10/2021 Would you consider a dividend reinvestment plan (DRP)?

I haven’t considered a DRP yet, but it’s a good question. We’ll certainly look into it.

08/10/2021 Does not paying above $2.09 in the buyback mean shares are overpriced?

A better signal would be if you saw me selling a large portion of my own holdings. Promoter-style CEOs often announce good news and then dump their stock. I’ve recommended Robert Hagstrom’s The Warren Buffett Way, and suggested investors use a two-stage dividend discount model with our numbers and a growth rate assumption. I believe we can grow at 10% indefinitely. The only real decision is what discount rate to apply.
We don’t announce buybacks because we’re in blackout periods most of the time, which makes it difficult. I’m often frustrated by that. But I’m confident in the quality of our business. Over time, you’ll see us act rationally, and yes, we should buy back more shares when appropriate.

08/10/2021 Would you buy back more shares if they trade below intrinsic value?

I’ve published extensive guidance in the Owner’s Manual and elsewhere. Please review that material, and if it’s unclear, follow up with us.

07/02/2022 Can you give details on the 9% reinvestment and how it is deployed?

Of the 9%, about 6.5% goes into managing the business by removing anything extraneous and focusing on serving clients and supporting our team. At the head company, we manage mission, vision, values, strategy, and structure, along with people, processes, clients, financials, digital and IT, brand, growth, and succession. We invest heavily in each of those areas. About 2.5% is directed to intellectual property, with much of that currently going into digital and brand-building initiatives.

We are cautious about revealing too much detail, but you can be assured that we are investing deeply with a 10 to 20 year horizon. We think about what has the potential to materially impact the business long term and position us to compete in any market in a differentiated way.

07/02/2022 How do you approach capital allocation between share repurchases and acquisitions?

We believe our return on acquisitions is very large, and our return on share repurchases will also be significant. It is always a balance of available capital between the two. Importantly, we want to avoid the long-term dilution of allocating other people’s equity to management or acquisitions. Acquisitions generally make the most sense in terms of return, and we have ways to structure them with minimal equity.

That said, we are also very focused on repurchasing stock when opportunities arise, especially at a meaningful discount and outside blackout periods. We will act decisively when such chances appear. One of our heroes believed in respecting quality shareholders by not repurchasing opportunistically against them, and while we keep that in mind, we are committed to seizing the right repurchase opportunities when they present themselves.

14/02/2022 How do you think about your business in terms of William Thorndike’s capital deployment framework?

Our business is a cash flow machine. We would issue debt if the terms were right, such as a $50 million bond in Europe at 1.5% for 10 years with no recourse, but equity issuance is off the table unless shares are dramatically overvalued. We reinvest to keep businesses competitive but remove cash from them regularly. Every Monday, direct debits move money into separate accounts for operations, tax, and partner profits, so funds are not mismanaged. Keeping businesses lean forces intelligent capital deployment and builds subsidiary equity for acquisitions. I refuse to create a culture where mismanagement is bailed out. If a subsidiary ran into trouble, I would support them only at a steep discount, reflecting how public markets operate.

At the group level, we focus on using capital rigorously. Our banking arrangements allow us to acquire businesses with no equity down, structuring so sellers guarantee the debt. We only take money out after that debt is repaid. This means we don’t need retained equity for acquisitions and can be disciplined on deal terms. I prefer to solve succession challenges in partnership with sellers rather than by handing over our equity. We also prioritize dividends, believing investors should see tangible returns. We are not chasing growth for growth’s sake like tech companies. Spare cash goes to reducing debt or buying back shares. Ultimately, I have no safety net if I mismanage, so I am vigilant with capital. This discipline underpins everything we do.

01/08/2022 Do rising interest rates affect KPG’s ability to make acquisitions?

No. The first firm acquired by the group was done at interest rates of 11.1 percent, and I remember paying those rates. We do not see interest rate increases having an impact on our ability to make acquisitions.

01/08/2022 How do you view rising interest rates and growing net debt? Will you continue borrowing at this pace?

We do not fear interest rates. At the start of the group, I was borrowing at 11.1 percent, and I was always confident that if we were making 35 percent EBITDA, interest rates would have little impact. In the short term, we might pay a little more interest, but in the long term, we will own tremendous businesses that are highly advantaged in their markets. If you are here for the short term, you might be worried; but over the full cycle, as I intend to be, I am not concerned at all.

We also repaid $7,500,000 of principal last year. If you take the net debt level and subtract that repayment plus this year’s expected principal repayment, you can see we aggressively pay down debt. Our approach is always to take on debt to buy great businesses and then pay it off quickly. We typically seek to repay 100 percent of our share of a business’s debt before declaring dividends. For acquisitions, we apply 100 percent of our post-tax cash flow and profits to debt repayment.

01/08/2022 Will you add over-the-counter (OTC) options for shareholders?

Probably yes. Options to reinvest dividends at a cheaper price would be attractive. It costs about $20,000, and we have been asked by U.S. shareholders to add OTC. We will consult our lawyers and pursue it.

01/08/2022 What is the repayment profile of debt?

Our practice debt typically has an eight-year term, but we repay our share within four years. We are very aggressive in paying it down. Reviewing our accounts over the last five years shows consistent principal repayment alongside acquisitions.

01/08/2022 Why not retain all earnings to fund acquisitions instead of paying dividends?

We are often asked this. With debt under 4 percent, it is hard to justify not taking it on while still paying dividends. As a listed company, I wanted to prove we could pay fully franked monthly cash dividends. This shows our business is superb and well managed. It also gives investors flexibility to reinvest or use the cash elsewhere. In the future, if the right structure emerges, we may become like Berkshire Hathaway and stop paying dividends, but for now, we are committed to paying them.

01/08/2022 Is there financing risk from relying on Westpac as the primary bank?

No. All four major banks and many others have approached us over the years. We see no challenge raising debt for acquisitions. If one arose, we would find a solution as we always have.

16/11/2022 Would you do anything differently if setting up the share awards again?

My favorite quote is “go hard often and early.” My regret is that the technology did not exist five years ago at the IPO. I would have gone in much harder, much earlier, and done much more. At the time, our share price was one dollar. It rose to 1.75 before the pandemic, then dropped to 60 cents. That was the time I should have done even more for our people, but we were busy managing the crisis. Today the share price is closer to five dollars, so we could have made an even greater difference had we acted sooner. Sometimes we spent too much time debating details, like whether to give 50 dollars at Christmas, instead of just moving quickly. Now everyone is aligned, but I would definitely have started earlier and bigger.

01/02/2023 Can we expect a dividend reinvestment plan (DRIP)?

That’s a good question. I don’t have a specific update right now, but I’ve been clear that we’ll pursue a global growth strategy. In the UK, we’ll move our longest-serving senior partner into the London market by the end of March, with a group office in place. So we’ll have people on the ground. I’ll provide details on dividend reinvestment later.

01/02/2023 Any updates on a potential U.S. listing?

It’s no secret I aspire to build a Berkshire Hathaway–style structure listed in the right market. We’ll continue to work vigorously on the right capital structure and listing and will update you as appropriate.

01/02/2023 With global expansion, can we expect KPG shares to be listed in other markets?

We will pursue the capital structure that makes the most sense for long-term shareholder value. I’ve always been open about my heroes, Buffett, Arnault, Leonard, and I aim to follow their example by doing the right thing for shareholders, partners, clients, and communities. If we meet a firm built with decades of sacrifice and it aligns with our values, we’ll help them. That’s our mindset.

01/02/2023 Can you share details about incentives tied to acquisitions?

Graham, what we’re working on, though not finalized, is a scout model. Scouts would get a 10-year override on 10% of our 51% ownership in a deal. Of that, 75% would go into a 10-year share pool and 25% would be paid in cash annually. This aligns scouts with our long-term vision while rewarding them for finding opportunities that strengthen the group. All incentives reflect our values and long-term agreements, just as they have since day one.

01/02/2023 If Kelly Partners listed in the U.S., would it remain listed in Australia?

Ed, it’s too technical to answer definitively at this point. What I can say is we’ll always pursue whatever structure maximizes impact and shareholder value. Our industry needs change, and we believe KPG is capable of leading that.

I’ve never been more energized about our future. We have the strongest people, most aligned partners, and external supporters we’ve ever had. I’ve learned there’s never a “just right” time, whether for starting a group, having children, or expanding globally. My job is to sniff out opportunity and unleash the full potential of our partners and people. And yes, my job is also to make our share price so compelling that those who sold or stayed out regret it every day.

11/08/2023 Have firms that joined before 2019 substantially paid down their debt?

Yes. We purchase firms in a disciplined way and structure repayments over four or five years depending on projections. Every Monday, repayments are automatically debited. There has been no slippage that I am aware of.

This year we increased borrowings by $11 million while paying down over $9 million of principal. Our model is simple: acquire an asset, pay it down, and avoid drawing profits until repayment is complete. This discipline has been consistent across the group.

11/08/2023 What is the rationale behind a potential privatization as part of the strategic review?

It is my responsibility to act in the best interests of all shareholders. If our share price does not reflect the intrinsic value of the group, it limits opportunities. In some markets, the business would naturally trade at stronger valuations and attract more global investor attention. Australia is harder for many international investors, something I have heard consistently over five years.

We have been approached by a U.S. SPAC, potential take-private bidders, and private equity groups. We are not fixed on any outcome, but we believe the Board needs professional assistance to consider options. We will appoint an investment bank shortly. Importantly, there are no significant costs to shareholders unless a transaction results from the review.

11/08/2023 Can you elaborate on options under review such as U.S. listing, discontinuing dividends, or going private?

If listed in the U.S., the business would likely be materially more valuable and more visible, similar to what we experienced when listing in Australia in 2017. Visibility and credibility with vendors increased, and we believe the same would occur in the U.S., U.K., or Toronto, making banking and transactions easier.

Regarding dividends, many shareholders have suggested we reinvest capital instead of distributing it. With a return on equity of 38%, reinvestment is compelling. Personally, I live off dividends, having taken an average salary of $240,000 over 17 years, and I value fairness between internal and external partners. Still, we see that retaining capital could materially grow the group without diluting shareholders through new equity. Finally, multiple parties have suggested going private. We will evaluate that carefully, always focused on ensuring quality shareholders share in long-term compounding opportunities.

11/08/2023 Can you clarify thinking around suspending dividends and funding growth?

We are often asked about suspending dividends to fund acquisitions. The reality is we see more opportunities than we currently have capital to pursue. We are exploring innovative funding methods, including issuing bonds, and we are receiving world-class advice on options. We will continue to update shareholders as those discussions progress.

11/08/2023 Would going private or delisting change ownership or voting?

Yes, it could potentially change both ownership and voting structures. At this stage I cannot provide more detail because no final structure or path has been determined.

11/08/2023 How do franking credits factor into dividend policy?

In the near term, given the reduced level of franking credits and retained earnings, franking will matter less. Our global investors do not receive the benefit of franking credits, and many Australian institutional investors exited after IPO. The value of a franking credit compared with a 38% return on equity is minimal. Our focus remains on long-term compounding of shareholder capital.

11/08/2023 How do dividends and franking credits fit into your long-term approach?

As an Australian tax resident, I value franking credits, but most of our best shareholders are global investors who receive no benefit from them. My long-term goal is to build the Berkshire Hathaway or Constellation Software of accounting. The key is to allocate capital in the most intelligent way to compound efficiently.

I introduced monthly dividends originally to show the strength of our cash flows and build confidence. Now that we have a quality base of long-term investors, the focus is on compounding value over decades. We will allocate capital where it produces the highest returns, and shareholders can choose how best to access that value.

11/08/2023 How would privatization affect long-term shareholders?

That is under review, and I cannot yet provide an answer. What I can say is that I have been here 17 years, remain fully invested, and want to continue compounding value alongside long-term shareholders. The strategic review will clarify the best way to achieve that.

31/01/2024 If dividends are suspended to fund growth, when might they be resumed?

I have long admired Warren Buffett, who never paid a dividend. My hope is that we never run out of growth opportunities compelling enough to reinvest profits rather than return them. I have no plans to resume dividends, though circumstances could change. Our stated aim is to be the Berkshire Hathaway of the accounting industry, a permanent capital partner with deep expertise in one domain.

We want to be the preferred buyer for founders who care deeply about their clients and communities. To achieve that, we will need significant capital over time, so prudent allocation is essential. In that context, paying dividends would not make sense given the scale of opportunity in front of us.

31/01/2024 How do you and your team approach acquisitions and evaluate each deal?

Acquisitions are never delegated entirely. Team members may scout opportunities, but I am hands-on in every acquisition. The most critical factor is the character of the people joining us. Allowing in someone who does not share our values has proven far more damaging than any benefit they could bring. That makes personal screening essential, both for acquisitions and employment.

We now have one dedicated person in the acquisition team, which is one more than in our first 17 years. I encourage shareholders to read The Outsiders, which shows that great CEOs personally oversee acquisitions and avoid creating institutional pressure to do deals. I remain deeply committed to being personally involved in every acquisition decision.

31/01/2024 What do you mean by non-acquisition partnerships with North American firms?

We are developing a growth platform strategy where we partner with management teams to use our intellectual property to build out territories. If we find CPAs with the leadership ability to run a platform in a substantial market, we will share the economics with them on a long-term basis.

Our first such opportunity is with a mid-40s CPA, highly experienced and an excellent leader, in a territory larger than Australia by both population and GDP. We have agreed to share the economics over a 20-year horizon if he partners with us to build the business. This approach allows us to deploy multiple management teams in substantial regions across the U.S. and globally, accelerating growth without requiring outright acquisitions.

31/01/2024 What was the U.S. acquisition process like compared to Australia?

The process was essentially the same. The first U.S. deal took 11 months, while the second took only 2 months, effectively 1 month. The first transaction is always hardest, but once the domino falls, momentum builds. The senior leader who joined us is entrepreneurial, very bright, and a senior figure in the industry. That firm’s structure evolved into 51%, 39%, and 10% ownership, with a young partner from another large firm taking equity, which validates the model’s attractiveness. The second deal involved a 42-year-old senior leader who had built a good-sized firm but decided the next 15 years would be stronger with our team rather than alone.

The process was complex. Agreements and licensing had to be translated from Australia to the U.S., requiring significant investment across three law firms and independent experts. While costly and time consuming, AUD18,000 on our first Australian deal in 2007 versus about $300,000,000 on this one, the long-term return should justify it. The market is 15 times the size, so the symmetry is fitting.

19/04/2024 Why did you decide to list Kelly Partners publicly despite being small?

I have always said you cannot be differentiated without being different. In our industry, most firms stay private because they could not behave in public the way they do behind closed doors. I believed that if we wanted to build something enduring, we needed to behave differently. Like Buffett, we needed to be public, show our performance, and let results speak louder than words. In 2017, we listed on the Australian Stock Exchange with a $45 million market cap and $2.5 to $3 million impact.

At the time, many said we were too small. But credibility was the issue. Senior practitioners with great firms did not believe my numbers, even when I showed them accounts. By being public, we forced ourselves to deliver returns in full view. Over time, the five-year results would demonstrate the quality of our model and execution far better than my words could. That transparency has been a cornerstone of building trust with partners and investors.

19/04/2024 Do you plan to list in the US, and why?

Yes. Our aspiration is to build Australia’s global accounting firm, and the best place to do that is from the US capital markets. Australia does not allow dual-class structures, so our choices are to dilute or to move exchanges. A US listing would let us implement a dual-class structure, preserve control, and give us credibility and visibility in the US and UK markets.

We have done the legal work, and it is not difficult. At the right time, when valuation supports it, we will pursue this. I will sell down from 48 percent to around 32–35 percent ownership, as I published in our owner’s manual from the beginning. My goal is to operate like Buffett, independently funded, aligned, and long-term focused. We benchmark ourselves against CBIZ, the only listed accounting group in the US. Our EBITDA margins are nearly three times theirs, and our ROE is more than double. A US listing would put us on the global stage where we belong.

04/06/2024 Do you value skin in the game and ownership in compounders?

Yes. Leaders are either owners or promoters. Owners, typically founders, put their capital, sweat, and reputation into the business. Bain’s research in The Founder’s Mentality shows founder-led businesses in the U.S. have returned nine times more than non-founder-led over 30 years. Promoters, who receive equity via options but never risk their own resources, behave differently. Ownership drives capital discipline, owners hate dilution, while promoters often treat equity casually.

As an investor, your first question to a CEO should be: how many shares are on issue? If they don’t know, or can’t tell you the change from last year, that’s a red flag. Skin in the game matters more than profitability ratios because it reveals discipline in capital allocation.

04/06/2024 What should be the right incentives for a CEO or chairman?

True entrepreneurs are not driven primarily by incentives but by inner scorecards. When I started Kelly Partners, I had $200,000 in fees and took on $5 million in debt. I signed 65 personal guarantees before listing. That was asymmetric risk inside my circle of competence, not reckless gambling. Leaders like me put the business before themselves.

Remuneration should balance capital returns and personal exertion. I am both a shareholder and a worker, so I should earn a fair salary for the work, plus share the upside as an owner. Options concern me because they give management a one-way bet: upside without downside. Incentives should reward building durable compounding businesses, not short-term stock moves.

04/06/2024 What is good capital allocation for a compounder?

It’s like driving a Formula One car in Monaco, you must be nimble, adapting to curves and conditions. Sometimes paying a dividend makes sense, sometimes not. Sometimes equity and debt should be raised, sometimes avoided. Bernard Arnault is a great example: when he bought the company that owned Dior, it looked risky but he knew what he was doing. Likewise, Buffett in his early years made sharp, complex deals that built his initial capital base.

The key is discipline around hurdle rates. Mark Leonard says hurdle rates are magnetic, drop them and everyone else drops theirs. We insist on high hurdle rates and a wide margin of safety. Growth is complex; financing in the U.S. has unique hurdles for foreign entrants. But by avoiding dilution, avoiding options, maintaining high hurdle rates, and protecting margin of safety, you increase resilience. Success demands determination, only the mad keep climbing fences others won’t. As Jobs said, most fail because they quit too soon. Anything done well is hard, whether in business, sport, or art. Accepting difficulty is the mindset edge.

04/06/2024 How does your M&A process work in Australia vs the U.S.?

The process is the same. We perform due diligence on a $1 million business with the same rigor as on a $1 billion one. Enough small, well-executed deals add up. The key is understanding the motivations, values, and behavior of owners, whether they fit our partnership culture. We then conduct full financial and legal diligence. We’ve completed more than 80 transactions this way, with a mature, disciplined process that doesn’t cut corners.

04/06/2024 How long can due diligence take in your acquisitions?

It varies widely. Our first Los Angeles deal began in January 2023 when I met the owner. He visited Australia in February, we traveled together to Omaha in April, and we signed in December. I invested a lot of time ensuring he was the right person and fit for our group. By contrast, I can sometimes complete diligence in a week. The longest case took 14 years from first meeting to completion. It depends on the individual, values, trust, and instincts matter as much as financial review. If something feels wrong, I walk away. Diligence is both rigorous analysis and intuition.

04/06/2024 What did you learn from recent divestments?

We experimented with wealth management by acquiring a retail-focused business bundled with an accounting firm. The accounting integration worked, but the wealth business underperformed. We were offered a high price, so we sold it. Unlike Buffett, who never sells, I will exit when a business doesn’t fit our mission, values, or circle of competence. We lack the management depth to run turnarounds, so we avoid distractions.

We also learned that very small firms, under $2 million in revenue, don’t suit us as standalones. We merged three such firms into larger units and will now only pursue firms in the $2–10 million range, with tuck-ins as exceptions. After 18 years, we know what works. Our funnel has over 190 firms, so we can be highly selective. We combine Buffett’s extreme discipline on price, terms, and quality with a programmatic acquisition approach. Growth won’t be a straight line, but we will only do good deals, not more deals for their own sake.

04/06/2024 Where are you now in U.S. capital allocation?

Think of Formula One in Monaco. We’re still warming up the tires, driving slowly, and learning the track. In Australia, we’re confident and drive fast; in the U.S., we’re cautious and risk averse. For our first two U.S. deals, we paid cash with no debt to reduce risk. We’ll build familiarity over time, like Westfield, the Australian shopping center giant that took 25 years to establish itself in the U.S. Our approach is patient, careful, and long term.

04/06/2024 Can you sustain 20% returns on invested capital?

Yes, and I believe we can improve. We see ourselves as students compared to world-class allocators like Buffett, Arnault, and Leonard. We’re still learning, but with experience we’ll get better at allocating capital and driving returns. Doing low-return business makes no sense, so we won’t pursue it. The focus is on high-return, compounding opportunities only.

04/06/2024 What is your stance on dilution and issuing shares?

We avoid issuing shares unless the value we receive is far greater than the future value of those shares. Today, our business is significantly undervalued compared to its intrinsic value. Using a two-stage dividend discount model, 20% growth for 10 years, then 2.5–5% terminal growth, the intrinsic value is far above our trading price. To issue equity now would be selling at a steep discount to that value. That destroys shareholder wealth, so we won’t do it.

21/08/2024 Why prioritize buybacks over acquisitions given stock price and valuation?

We know the business and its performance better than anyone, so we believe we can buy stock back at deep discounts to intrinsic value. We have plenty of capital for our growth plans, but we are almost always in blackout periods. This makes it challenging to align available capital with the ability to act on buybacks. Whenever we can, and it makes sense, we will execute them.

21/08/2024 Why increase the facility with Westpac instead of a U.S.-based lender?

Westpac offered better pricing and terms. At the time, we were subscale for U.S. lenders, who also wanted a global mandate covering Australia and beyond, which we were not prepared to give. That would have introduced unnecessary risks. Our long and successful relationship with Westpac made the decision straightforward, and they facilitated the facility on very attractive terms.

21/08/2024 Why was the purchase of 50,000 KPG shares not shown in financial statements?

That purchase occurred in July, after year-end on June 30. It is included in the subsequent events note, Note 39, and in the subsequent comments section of the Director’s report.

21/08/2024 What is the rationale for buying back shares given the business valuation?

We recommend using a two-stage dividend discount model, where you assess the long-term growth rate of the business and apply an appropriate discount rate. If you can answer those two variables, I can provide a clearer valuation perspective.

21/08/2024 Are $5,870,000 in franking credits stranded due to the no-dividend policy?

Franking credits will continue to rise with Australian tax paid. While they remain available on a consolidated basis, they will sit unused under the no-dividend policy. If we pursue a U.S. transaction, we will review options to address the franking credits as part of that process.

21/08/2024 Is the current loan facility structured in Australian dollars?

Yes, the $22,000,000 facility is in Australian dollars.

21/08/2024 What is your target gearing level compared with U.S. peers?

We have spoken about 2.5x net debt to EBITDA as a long-term maximum. A large U.S. peer is geared considerably higher than 5x. At our current 1.28x, we are extraordinarily lightly geared. In a business with no dividend, regular principal repayments, and the defensive characteristics of our model, this level is conservative. We could run with no debt at all, but that would not be optimal either.

29/09/2024 How are your deals structured to deliver 40%+ returns?

We rarely talk about this publicly, but our returns are built on know-how, trade secrets, and access to financing others cannot secure. Because of our long-term behavior and reputation, we earn terms that are unavailable to others. Our track record and trust allow us to structure deals with far less equity than others would require.

We use a 51/49 partnership model: if we make a dollar, we both make a dollar; if we lose a dollar, we both lose. That alignment creates opportunities others cannot replicate. Most acquisitions in the market are cash-outs, 100% buyouts of firms looking to exit. We do not want disposals, we want partnerships. When our partners make a 40% return on equity alongside us, they are highly motivated.

09/11/2024 How are you allocating capital and growing revenue?

Inspired by The Outsiders, we are disciplined in capital allocation. We began with $160,000 and have raised about $14 million over the life of the business. Shares on issue are now 45 million. Revenue has grown from $31 million at IPO to an expected $105 million this year. We focus on strengthening existing operations, growing subsidiaries, expanding complementary businesses, and pursuing programmatic acquisitions, occasionally making larger ones above $5 million in revenue. We also repurchase shares when free cash allows, without diluting external quality shareholders.

09/11/2024 What did the review highlight about founder-led and programmatic acquirer models?

The review emphasized research in Founders’ Mentality showing that founder-led companies deliver three times the returns of non–founder-led companies. Programmatic acquirers also generate superior results. KPG compares favorably with top global compounders and aspires to become Australia’s first global accounting firm. It is not unrealistic if pursued diligently over time. One option is pausing or reducing dividends to reinvest intelligently for long-term shareholder returns, though no final decision has been made.

09/11/2024 Why would relisting in the US benefit Australian shareholders?

We have not yet reached a conclusion, but the US is the largest market for the intellectual property, systems, and processes we have developed. Being listed there would increase visibility, credibility, and deal flow, similar to how listing in Australia accelerated acquisitions by nearly four times in five years. It would also make the company more accessible to global investors, who already dominate our top 20 shareholder list, while not disadvantaging Australians. Longer term, a US listing would provide the most flexible capital structure to support growth over an 80–100 year horizon.

19/11/2024 Does EBITDA remain a valid measure under the 51/49 partner-owner driver model?

Yes, it does. At the practice level, EBITDA reflects the quality of those businesses’ operations. KPG then receives its share of those earnings, which flow into our capital allocation policy. You can see from the waterfall chart that the 51 percent and 49 percent split applies to net profit before tax, before parent costs. The parent pays tax, and non-controlling interests take their share and pay tax outside the company.

From there, we allocate capital in different ways, such as interest on HoldCo debt, HoldCo depreciation (which is rapidly diminishing), additional investments, and strategic reviews. For example, we invested nearly $2,000,000 this period and undertook a $1,300,000 review. Acquisition costs and retention adjustments also factor in. Out of $11,000,000 in net profit before tax, about $10,800,000 remained available to invest for long-term returns. Depreciation is heading to zero quickly, interest is declining, and non-recurring expenses totaled about $3,200,000. We expect growth to continue, supported by these investments.

19/11/2024 Is the current and future debt structure held at the head company or within each business?

The overwhelming majority of debt is within special purpose vehicles that fund the development and growth of each operating business. A small amount sits at the head company level, typically drawn up and down as needed. All of this is reflected in our financial statements, and we consider it very manageable.

For context, a private equity-backed firm in the U.S. recently refinanced at 6.5 times net debt to EBITDA. By contrast, our net debt to EBITDA was 1.28 times at 30 June and is now 1.6 times. That is extraordinarily light gearing, and while we may adjust if the right opportunities arise, our methodology remains disciplined.

19/11/2024 Do you have a view on the CBIZ acquisition of Markham?

We would not pursue that type of transaction. CBIZ’s $700,000,000 revenue deal is on a company with over $1,000,000,000 in revenue. Our approach is programmatic acquisitions of $2,000,000 to $10,000,000 revenue accounting firms over time.

CBIZ has grown its market cap tenfold in the last decade, but research shows transformative acquisitions often destroy shareholder value. I do not consider myself smart enough to execute such large-scale deals. Our strategy is to remain a hedgehog, focusing on what we know well, avoiding unnecessary risk, and staying strictly within our circle of confidence.

11/12/2024 Can you share details on the Florida partnership, EBIT margins, and acquisition approach?

The acquired US business had an EBIT margin of 18 to 20%. Our approach is consistent: every business we have partnered with, over 80 across nearly 20 years, started with 12 to 20% EBIT, and we successfully move that to 30 to 35%. It typically takes up to two years, though with the right team and attitude it can be done in six weeks.
For the Florida partnership, I am confident we bought it at less than three times EBIT. I will not explain the mechanics publicly, but our 40% return on equity is only possible because we pay the right price. The ASX now requires us to publish more details for each deal, and we comply fully, but we do not disclose information that would harm our competitive position.

11/12/2024 What is the greatest challenge, and can you give an update on the full US listing?

We believe there are many global firms, and we can be one of them. Through our new Kudos partnership we now have a global posture of 60 firms in 48 countries, and I am confident many will become Kelly Partners firms over the next 10 years. Regarding the US listing, we are investigating both the US and Toronto. Mark Leonard suggested Toronto because costs and litigation risk are lower, valuations are strong, and the move from Toronto to the US later is simple. You can also adopt a dual-class structure, and there is no downside. We have already spent more than 1.5 million dollars on legal work and are well prepared to execute at the right time. We would also like to do a constellation-style debenture issue, raising long-term bond funding rather than equity. That was advice Mark shared years ago, and it still makes sense.

As for my private portfolio, it is very small and mostly for research discipline. I hold small amounts of LVMH, Amazon, Costco, Tesla, plus some residential and commercial property. But 90% of my net worth remains in KPG stock. My current book recommendations include The Dream of Solomeo by Brunello Cucinelli, The Eternal Pursuit of Unhappiness by David Ogilvy, Man for Markets for health focus, and The Art of Being Unreasonable by Eli Broad, which I love. I also recommend the Founders podcast by David Senra. Audible has been a game-changer for me, I can listen to books while showering, exercising, or traveling, which lets me read all the time.

11/12/2024 Why was the Florida acquisition outside the typical 2–10 million range?

We never said 10 million was a hard cap. About 95% of our deals will be in that range, but occasionally a larger one makes sense. The Florida business was one of those. It serves 700 McDonald’s franchise stores, which is 5% of the entire US McDonald’s market, and has been doing this for 40 years. In Australia, we serve 150 of the 1,000 McDonald’s stores, or 15%. By acquiring this firm, we now have 700 of 13,000 US stores, the equivalent of holding 70% of the Australian market. McDonald’s is in 120 countries, and through Kudos we can pursue that niche globally. This is exactly the type of firm I came to the US to acquire, and I am very pleased we did it.

23/12/2024 Are your US goals similar, to become publicly traded here?

Yes, that has been publicly disclosed. We expect to move our listing from Australia to the US. Today, there is only one publicly traded accounting group in America, CBIZ, with revenues near two billion. Ours are about 150 million, so we have ground to cover. Their model and others like it, usually private equity-backed, buy 100 percent of firms. Ours is different: we do 51/49 partnerships with founder-led firms of two to ten million in revenues, where founders want to ensure their people, clients, and communities benefit rather than being absorbed and discarded.

23/12/2024 Do you see yourself as the opposite of private equity in acquisitions?

Yes. What is happening now in America happened in Australia 15 years ago. The results are publicly available. In my view, the internal strength of a firm comes from its mission, values, and vision. Private equity has none of these; it has a checkbook, a spreadsheet, and an exit date. So the choice is between a body with a soul and one without.

We generally partner with founders or their successors. By contrast, private equity here often buys from Baby Boomer owners who inherited firms, want a check, and do not care what happens after. Private equity is a short-term play, not a long-term one. I describe it as like a party, fun while it lasts, but not in your best interests over time. That has already proven true in Australia, and it will prove true in the US.

23/12/2024 Did private equity enter the Australian market 15 years ago, and was it a failure?

Yes. Three large private equity-backed firms listed on the Australian Stock Exchange. Two went broke, and one performed so poorly it was taken private. A similar case in the US is Focus Financial, a roll-up of independent financial advisors. It went public, never performed beyond its IPO price, and within two years private equity exited, leaving it to flounder until another group bought it and took it private.

The playbook has not changed, and the results are predictable. While the music is playing, everyone dances, but when the tide goes out, as Buffett says, you see who is swimming naked. Many Baby Boomer partners simply want a bailout for liabilities they created, without taking responsibility or improving their firms. That leaves younger partners with no real ownership and little incentive to commit to a long-term vision.

23/12/2024 How does your partner-owner-driver model differ from private equity control?

Our partner-owner-driver model gives senior and emerging partners genuine ownership in a predictable partnership, not just the appearance of ownership. Drivers are local leaders and brand ambassadors who make a difference for their people, clients, and communities. It has been very successful in Australia, where we now have 38 firms globally. These firms are twice as profitable as the average, use half the working capital, and partners gain about 25 percent of their time back because of a 38-person central management team that supports them.

It is a relationship-based model, not transactional. When a senior partner sells to private equity, they are effectively selling their people, which I do not think is positive. We aim instead to support firms from beneath, removing inefficiencies and freeing leaders to focus on people, clients, and communities.

04/02/2025 M&A takes significant time and effort. How do you plan to manage this?

We have stepped up a dozen partners into what we call the Eagle Scout Group. They scout new opportunities and participate in integration, as they have for more than a decade. I am actively training them, and we continue to grow and invest in management capability.

This is a well-traveled path for us, not a new experiment. While we have grown rapidly over the last two and a half years, we will not pursue unsustainable growth. Our focus remains 5% organic and 5% acquisition, with careful integration and strong execution.

04/02/2025 Do you believe shares are trading below intrinsic value, and how do you view buybacks?

Yes, we believe the shares are below intrinsic value. We will continue to repurchase when opportunities arise and capital is available, but never at any price.

04/02/2025 How do you view issuing new shares, especially in connection with a US listing?

We will issue equity only if it is in shareholders’ interests and aligned with intrinsic value. Share buybacks will continue when shares trade below intrinsic value. We will not raise equity or issue shares carelessly.

04/02/2025 Is the financing environment in the US different?

Yes, it is. We will require equity capital to access the kind of debt structures available there. For now, we are finding alternative ways to secure debt that look very promising.

12/08/2025 How do you ensure smooth transitions in 100% acquisitions, and will there be more?

We usually prefer partnerships rather than 100% acquisitions. However, we will do full acquisitions where they tuck into existing businesses. Our Sydney CBD business is large and strong, and our North Sydney business is also involved. In the Southern Highlands, our Bowral business is the largest in the region, and this acquisition makes it more than twice the size of any competitor. That gives us a unique and unduplicatable position.

Smooth transitions depend on the quality of people we partner with. As one of my heroes says, you cannot do a good deal with a bad person. We only do deals with good people. The partners in this case are gentlemen we have spoken to since 2020. It has taken five years to bring them into our group, and we are proud of them and their teams.

12/08/2025 What efforts are underway to expand M&A resources without increasing deal size?

We are not scaling the M&A deal team in any major way yet. We already receive hundreds of millions of dollars in incoming leads. We will scale the team once the capital is in place. First, we must secure the next piece of funding before expanding deal capacity.

12/08/2025 Would you consider increasing the central services fee given rising expenditures?

We have committed never to increase the central services fee. If anything, I aspire to lower it. What we deliver for that fee is, in our view, unduplicatable. Shareholders have encouraged us to retain more capital and reinvest, which supports this model. We are confident the returns justify the approach.

12/08/2025 What is the priority, dividends or growth?

I am not anxious about short-term dividends, and neither are our major shareholders. They have communicated clearly that they want us to grow the scale of the business on the existing platform and metrics.

12/08/2025 If you raised $100 million, are there enough targets to deploy that capital?

Yes. The market is enormous. BlackRock recently paid $2 billion US for a firm, which gives a sense of scale. I am more confident than ever we could deploy significant capital at the right rates of return. We have the model and the experience to build the team and handle it.

12/08/2025 Would capital raising be one-off or recurring, and how much flexibility is needed?

It is important to remain flexible, as Henry Singleton advised. I admire Mark Leonard’s approach at Constellation, where his second larger raise may have been too much. Constellation has raised about $85 million US in total. We have raised approximately $19 million Australian, or around $13 million US, so there is a significant gap we could look to close at some point if the right opportunity arises. With two-to-one or three-to-one debt leverage, we would have enormous firepower.

The math is straightforward. Raise $100 million Australian, add $200 million debt, and you have $300 million. Invest that into $600 million of partnerships at 30% margins and $200 million EBITDA, which delivers $100 million EBITDA to us. After tax, that is $70 million. Multiply it by 50 and you get $3.5 billion. Even if you pick another multiple, it still gets you to $2 billion plus. After 55 partnerships and 90 partners, I believe we are among the most experienced globally in this niche. With our brand, track record, access to capital, and systems, I believe scaling to that level is possible.

12/08/2025 Will you raise a mix of debt and equity in tranches over the next 12 months?

It is possible. Debt offers are very strong, and alternative capital markets are more flexible than ever. We have been impressed with the options shown to us. There is no rush. The bigger risk would be doing the wrong deal rather than taking our time to structure the right one.

This remains a relationship business. The Sydney CBD and Bowral acquisitions, which took over five years, show the patience required. In the US, we pursued the Mission Viejo firm for almost a year before they engaged. Only after we added a Florida firm in 2024 did they come back to the table, recognizing the value of East Coast and West Coast presence. These long-term relationships matter.

12/08/2025 Can you comment on related party loans and their impact?

Yes, some loans have been paid back and others extended. It has been expensive to operate in the US, and I have borrowed personally to fund it. We will sort it out over time. For example, my rent remains well below market levels.

12/08/2025 How do you balance slower organic growth funded by debt and cash flow versus faster growth through equity?

We have managed that balance carefully for twenty years and will continue to be careful. At 50, with nearly two decades of experience, I see an opportunity to use my energy and skills to get the group to a globally competitive size. But if growth is not capital efficient and does not deliver returns, I would happily enjoy the California weather and walk the dog instead.

All of my business heroes have been very careful about capital efficiency. “The Outsiders” influenced me greatly. Their lesson is to be disciplined, but bold when the right opportunity arises.

12/08/2025 Is there serious consideration of taking KPG private?

As directors, we must always consider what makes the most sense for shareholders. That said, my long-standing position is that being public has helped our group enormously. I would love for KPG to remain public for 100 years.

Being listed gives us the right structure for our current business and aspirations. It also makes us an insurgent against larger firms that may struggle to build a structure fit for the next century. Our preference is to stay public.

12/08/2025 How do you ensure smooth transitions in acquisitions such as Sydney CBD, and will there be more 100% acquisitions?

We typically prefer partnerships rather than 100% acquisitions, but we will take full ownership when it involves a tuck-in to an existing business. Sydney CBD, North Sydney, and Barrel are strong businesses. With this latest acquisition, Barrel will be more than twice as large as its nearest competitor, creating a unique and defensible position.

The key to smooth transitions is the quality of the people you partner with. As one of my heroes said, you cannot do a good deal with a bad person. We first engaged with these partners back in 2020, and it took years of relationship-building to bring them into the group. We are proud of the quality of the partners and teams joining us.

12/08/2025 Historically, domestic funding has been nonrecourse to the parent. International funding appears recoursed. Is there a lower-risk structure?

We are currently working on a bond that may sit above the parent, possibly with its own financing entity. Ultimately, our aspiration is a listed holding company structure, likely Cayman-based, with separate Australian, U.S., and U.K. holdcos. Each market would have funding attached to its own holdco and subsidiaries.

This process is taking time, but we prefer to move slowly and correctly rather than rush and need repairs later. We remain highly conscious of risk and continue to refine the structure.

12/08/2025 What efforts have been made to expand M&A resources to scale deal volume without increasing deal size?

We are not expanding the M&A team significantly yet, despite hundreds of millions in incoming leads. Scaling that team will come once the right capital is in place. For now, the next stage of financing must be secured before we expand the deal capacity.

12/08/2025 Given recent investment expenditures, would it be feasible to slightly increase the central services fee?

We have committed never to increase that fee. If anything, my aspiration is to lower it. The value delivered for that fee is, in our view, unmatched. We are comfortable with the returns and shareholders have encouraged us to retain more capital to grow, rather than return it as dividends.

I am not focused on short-term dividends, and neither are our major shareholders. Their priority is scaling the business on the existing platform and metrics.

12/08/2025 If you were to raise $100 million, are there enough acquisition targets to absorb that?

Yes, absolutely. The market is enormous. BlackRock recently paid USD 2 billion for a firm, so there is no shortage of opportunity. I am more confident than ever that we could deploy significant capital at the right returns, given our model, team, and experience.

12/08/2025 If you raised $100 million, would it be a one-time event or repeated over time?

I think flexibility is critical. I admire Mark Leonard’s approach, where his second capital raise may have been larger than necessary. He raised USD 85 million in total, while we have raised only about USD 13 million. That leaves a meaningful gap we could consider filling.

If combined with a 2:1 or 3:1 debt structure, it would create enormous firepower. Using straightforward math, AUD 100 million equity plus AUD 200 million debt could generate AUD 300–600 million of acquisitions, leading to $200 million EBITDA, $70 million NPAT, and a valuation of $2–3.5 billion, depending on the multiple. Given our 50+ partnerships and proven expertise, I believe it is possible to reach that scale.

12/08/2025 Will you raise a mix of debt and equity in tranches over the next 12 months?

It is possible, Nancy. The offers on the debt side are strong, and alternative capital markets are more flexible than ever. We have been impressed with what we have seen.

There is no rush, as the greater risk is doing the wrong deal rather than moving too slowly. We will continue to work hard to find the best capital structure, with patience and discipline.

12/08/2025 Can you comment on related party loans and funding U.S. operations?

Yes, it is expensive to build in the U.S., and we have used loans to help fund it. We will sort it out over time. You will note that [Marvin] remains deeply uncompetitive with the market.

12/08/2025 How do you balance growing slower with debt and cash flow versus faster with equity?

For 20 years, we have carefully managed that balance. At age 50, with nearly two decades of experience, I see the opportunity to scale globally, but only if it is capital efficient and delivers returns to shareholders. If not, the weather is pleasant in California, and I could always walk the dog. My heroes, as described in “The Outsiders,” were disciplined about capital. You must be cautious but ready to act decisively when the right opportunity presents itself.

12/08/2025 Is there any consideration of taking KPG private?

We must always consider what is best for shareholders. That said, I believe being public has been a major advantage for us. My long-standing view is that KPG should remain a public company. I would love to see it remain public for 100 years. It positions us as an insurgent against larger incumbents, many of which have outdated structures.

Competitive Advantage

20/07/2020 What allowed you to differentiate your firm?

I had already written a book at 22, self-published it, raised funds, and pulled together a team. It became a national bestseller, launched at the National Press Club to a live TV audience of over 300,000, and I was featured on A Current Affair. Four million people watched that segment. Over the next seven years, I delivered more than 2,000 professional speaking engagements.

By 2006, when I started the firm, I had credibility, profile, and a strong reputation. That foundation, combined with a clear focus on private clients and a genuine people-first culture, allowed us to differentiate.

21/09/2021 How do you help partners make their businesses more efficient after acquisition?

When I spend time with partners, I focus on helping them apply our Kelly Partners Business System. This includes strengthening their financial disciplines, improving client selection, refining processes, and upgrading people systems. We bring structure, documentation, and a clear playbook that has been proven across dozens of acquisitions.

By aligning them with our values, strategy, and long-term model, we help them transition from running as small technical practices into well-managed businesses. The result is better efficiency, stronger culture, and improved client outcomes, which in turn drive profitability and sustainable growth.

21/09/2021 How do you help partners run their businesses more effectively?

We have hundreds of pages of unique, documented intellectual property, essentially a business-in-a-box. It is built around the Kelly Partners Business System and the Progress Pyramid. People want to make progress, so we break the business into 12 parts and benchmark against best practices from world-class companies, not accounting firms. We start with the mission: why does the business exist? For us, it is to help private business owners be healthier, wealthier, and wiser, because they provide 70 percent of employment in Australia, and no one can live a dignified life without employment. We drill into values, be people for others, do what you say, work as part of a team, and embed these into recruitment, assessment, leadership, and day-to-day management. Over time, partners move from repeating the language to living it. When people with the right mindset and drive operate within that framework, they achieve extraordinary results.

I often remind our teams that Nelson Mandela and Steve Jobs were once employees. Jobs, for example, was sidelined at Atari, but later created trillions in value. My goal is to build a business that lifts people up, lets them express their abilities, and provides the structure to continually improve. That philosophy has been very effective.

08/10/2021 How do you measure client satisfaction at Kelly Partners?

Net Promoter Score came out of Bain & Company through Fred Reichheld, who published The Ultimate Question: “How likely are you to refer Kelly Partners to a friend or colleague?” The score is out of 10. Anyone rating 6 or below is a detractor, 7 or 8 is neutral, and 9 or 10 is a promoter. Promoters grow your business, and we’ve always called them “raving fans.” This year, we implemented a digital platform that allows us to measure this consistently. The global accounting industry average is negative 13. Our score is above 70, which is an extraordinary result from a statistically relevant number of respondents. We have about 9,500 client groups, and roughly 25% of our key clients have answered the question.

This shows the quality of work across all our businesses. Client feedback is critical: when we fall short, we want to know and make it right. Our mission has always been to help our people, private business owners, and the communities we serve be healthier, wealthier, and wiser. Because private business owners employ 70% of Australians, supporting them directly impacts quality of life and employment stability. That focus, along with our values, is central to how we innovate and grow.

08/10/2021 Why is B Corp Certification important for your business?

We founded the firm 15 years ago with a clear social mission to make people better off. Financial outcomes follow when you focus on doing the right things well for the right reasons. B Corp Certification reflects those values, which many larger businesses are only now trying to adopt. In acquisitions, our reputation for fairness continually brings us opportunities others don’t see. Similarly, every satisfied client or team member refers others, reinforcing our growth and culture.

We are one of only 4 listed companies in Australia, and the only major accounting firm, to achieve B Corp Certification. It publicly signals our values in contrast to firms that pursued aggressive tax planning and other conduct now misaligned with society’s expectations. Those firms may struggle to attract talented young people, while our values help us stand apart. We also aim for net zero certification, operating sustainably and frugally, while treating people well so they can do their best work.

08/10/2021 How strong is the Kelly Partners brand today?

We have invested in the Kelly Partners brand substantially and consistently. Our semiannual brand study shows our brand strength is now over 50% higher than two years ago and well above the top 23 accounting firms in Australia. The brand serves two purposes. First, it helps attract talented professionals, because winning the talent battle is critical. Second, it conveys quality to clients, making us the first-choice advisor to leading private business owners.

We believe a strong branded offering in this space has the best chance of long-term growth. I’m particularly pleased with the progress we’ve made, as the brand consistently attracts both top professionals and high-quality clients.

08/10/2021 How will AI and technology affect accounting and Kelly Partners?

When I started at PwC in 1993, we worked on floppy disks. Then MYOB came along, and later Xero, and each time people predicted accountants would have nothing left to do. Instead, demand only grew, because financial complexity kept rising. Every advancement has created more client conversations and new needs. If someone could ever simplify the 10,000 irreconcilable pages of the Tax Act, they’d be richer than Elon Musk, but I doubt that will happen.

We’re excited about technology. We aim to be the most digitally enabled accounting group in the world for private business owners. We’re building a new digital platform that will transform client engagement and unlock the value in client data as costs of using that data fall. The risk is that technology will eliminate opportunities for average graduates. Just as factory jobs disappeared, basic roles in professional services will shrink, requiring higher skill levels across the board.

08/10/2021 How do you select the right partners, and can this scale?

We ask a simple question: is this a person for others or for themselves? Many professionals in our industry are impressed with their own skills. We look for people who want to use their talents in service of others and dramatically improve client wellbeing. Those people stand out, and fortunately, we are the only ones looking for them. Our filters are: do they serve others, do they do what they say, and do they work as part of a team?

We seek people who are two standard deviations above the mean, about 2.5% of professionals. They are rare but plentiful enough for us. Most firms have “me-first” cultures, which don’t attract these people. That gives us a large opportunity to create a differentiated place for the right talent.

08/10/2021 How does KPG attract and retain above-average accounting talent?

We’re not fans of offshoring. Leadership and good management make all the difference, and you can’t do that effectively from 6,000 kilometers away. We’ve built a rigorous process to find the right people. We now have three full-time recruiters, supported by strong marketing. Our 17-step recruitment process includes multiple interviews, a two-hour work test, and two profiling tools, one that identifies core strengths and one that screens for intrinsic motivation and discipline. We look for people who finish what they start.

Our filter is different: we seek individuals with the right values and intrinsic drive. You can’t teach motivation or discipline, so we select for it. Candidates must also be intelligent and energetic. We consider hiring a lifelong commitment, we want people who can be with us forever. It takes a decade to make a material difference in someone’s career, so we put in the effort to find those rare, exceptional people.

07/02/2022 Can you repeat what you said after “please don’t call KPG a roll up”?

A roll up is when a head company buys other businesses and consolidates debt and responsibilities at the top while leaving subsidiaries with rights but no real accountability. We see that as the opposite of partnership. Our model is 5,149 genuine partner owner drivers, where rights and responsibilities are aligned. The partnership agreements are deep documents, outlining values, operations, and long-term plans with KPG as a permanent owner.

We are the only group globally with this structure, though we note Ausbrokers and Steadfast have achieved success with numerous acquisitions in general insurance broking. When we listed, we told people we wanted to be the Ausbrokers of accounting in Australia. They completed about 60 deals, and we are well on our way to that number. It is a critical distinction and fundamental to the way we think.

07/02/2022 When you say recurring revenue, is it contracted multi-year or recurring in nature?

It is recurring in nature, not contracted. Most people stay with their accountant for 10 to 30 years if you are any good, and we believe we are better than average. So we expect that revenue to return year after year for decades.

It is not like Otis Elevator, where you have contracts tied to installations, but the principle is the same. Retention depends on doing a good job, and that remains our focus.

01/08/2022 When reviewing potential acquisitions, how do you decide if a suboptimal firm can be improved to KPG standards

If people do not have the values and the commitment to make improvements, then it cannot be done. It comes down to the attitude and energy of the ownership group, whether they truly want to make a change, make the effort, and invest. We do extensive analysis of the client base, market reputation, and brand strength. But ultimately, leadership is critical. If the leadership does not believe things can be better and does not believe that partnering with us can substantially improve the business, that is the reason we would not proceed.

01/08/2022 How does KPG handle partners whose values diverge from the firm’s?

We work hard to keep our group aligned around clear values: acting in others’ interests, keeping commitments, and working as a team. We have held partnerships together successfully for a long time. If a partner’s behavior shows they no longer share those values, we typically transition them to competitors.

16/11/2022 Do employees understand shares, and how do you address that?

Yes, some employees initially do not understand shares, but that is not a reason to exclude them. We are not trying to treat people like animals with stimulus-response techniques. Leadership’s job is to create the right environment. If you dislike your children’s behavior, you look at yourself first. The same applies to leadership and employee behavior. Across corporate Australia, senior leaders often take large amounts of equity for themselves but say their people cannot understand shares. Everyone understands fairness. If the boss has a share scheme, everyone should. If people do not understand, then educate them or simply give them shares and let the shares educate them over time.

We believe there is an opportunity to build organizations on different values. We are a registered B Corp and have been mission-led from day one. This approach is insurgent against industry incumbents, many of whom are stuck in old-fashioned leadership mindsets. People are smarter than some leaders give them credit for. We live in a democracy because we believe in collective wisdom, not elitism. Nelson Mandela was once a junior employee in a law firm. Steve Jobs was a junior employee at Atari. Treating people like they cannot understand is foolish leadership. We want to retain those people and help them develop. Most people are not stupid, the leaders who think they are, are the foolish ones.

01/02/2023 Can you add insight into the investment and services team, particularly to support U.S. growth?

Zack, our main focus is on brand, digital, and what we call global workforce. We’re partnering to open a 150-seat office in Mumbai imminently to provide workforce support to the UK, U.S., and Australia. This is a long-dated investment, solving workforce needs for the next decade. We’ve also invested significantly in digital, funded entirely from cash flows over the last two years.

We’ve rolled out our digital client service platform to 44 clients, led by a senior services team member I have great confidence in. Our aim is to add 100 of our top clients each quarter. With strong physical presence, strong digital presence, and a connected community, we believe we can build something special. Our 17,000 client groups represent 35,000 people, and engaging even 20% of them, 3,500 to 7,000 people, creates a powerful network. We see this as a major source of competitive advantage over time.

11/08/2023 What does KPG do after an acquisition to raise margins to group standard?

We have completed nearly 85 transactions, giving us detailed proprietary insight into every expense line of these businesses. We analyze the P&L and apply our benchmarks to identify where improvements can be made. If we have time before closing, we prepare early; otherwise, we act immediately after the transaction to lift margins.

With one to three deals, changes can happen quickly, though more simultaneous deals take longer. Increasingly, we coach firms to make these improvements themselves under our guidance. This creates stronger partnerships with greater ownership mentality, ensuring long-term alignment and sustainability.

11/08/2023 How would you respond to concerns about CountPlus and what is KPG’s moat?

I do not comment on other businesses directly, but I am often asked about our moat. I describe it as the process of digging a castle moat: difficult, unseen, unglamorous work that requires conviction and persistence. I spent many years doing this, and the real key is attracting others who share the mission and values to keep digging, maintaining, and defending the moat together.

Our moat is built on shared mission and values, executed by exceptionally talented people willing to put aside short-term gain for long-term strength. Many businesses that struggle lack deep, universal values. In our case, the strength of our partners and their commitment to clients and community is the foundation of our defensibility.

31/01/2024 What are the benefits of network effects from growing clients, and do you have a maximum valuation multiple for acquisitions?

In terms of network effects, every client we meet represents not just themselves but thousands of connections, knowledge, and opportunities. If we build trust and operate with quality, clients increasingly ask us to help in new ways, multiplying our impact. Over time, this creates conversion opportunities across services, geographies, and technologies that we would not otherwise have without our client expertise. For example, a long-term shareholder and client recently introduced us to leadership contacts in the U.S., expanding our reach. That type of goodwill and reciprocity underscores the future quality of the organization.

On valuation multiples, I do not want to reveal specifics, but our focus is on return on invested capital and equity. We think as partners with shareholders about appropriate returns for the risks taken. Our track record shows we deliver sensible returns, and we will not invest below current return levels simply to be larger. We are not focused on size, but on excellence. That philosophy applies to financial returns and capital allocation, and I remain substantially invested alongside shareholders.

19/04/2024 Why are you called “the dot connector”?

I have been described as a dot connector because I draw from multiple disciplines and leaders to build Kelly Partners. Michael Porter says competitive advantage today comes from the unique combination of ideas and activities, and I believe that wholeheartedly. Our holding company structure nods to Berkshire Hathaway; our brand design tips its hat to LVMH; our decentralized capital allocation is straight from Buffett, Munger, and Rappaport. Our programmatic acquisition strategy comes from McKinsey research and the behaviors of Arnault and Mark Leonard.

From Ogilvy I drew inspiration for building a services organization. From Buffett’s investments in H&R Block and Young & Rubicam I saw parallels in accounting and advertising. Even smaller lessons, like Michael Hill’s advice to maintain control when listing, or John Malone’s approach to ownership, are dots I connect into our model. None of this is unique on its own, but my role is to relentlessly execute a latticework of proven ideas. That is the essence of being a dot connector.

19/04/2024 Where should investors go to learn more about Kelly Partners?

Seek and you will find. That means doing the work yourself. Print out every report we have published since 2017, sit quietly with a pen and ruler, and study them. If you do, you will see the clarity, transparency, and consistency in our model.

We are mission-driven to make others better off. We are honest, transparent, and radically committed to execution. Our circle of competence, operating accounting firms for private business owners in the $2–10 million range, is durable and growing. Death and taxes are certainties. We intend to compound within this niche for decades, building a global accounting firm with Australian character. We treat investors as partners, and the feedback they provide often sharpens our business. That is how we will continue to grow for the next 25 years and beyond.

04/06/2024 Are Kelly Partners still unnoticed?

Yes, largely. When we went public seven years ago, people warned everyone would know everything about us. In reality, very few do. Most people are too self-absorbed, not learning, not reading, not studying, not traveling. We remain invisible to much of the industry, which is fine by me, it’s not my job to educate competitors. Even if they understood our model, duplicating it would be nearly impossible. Combining activities into a unique system, backed by strong leadership and operational excellence, creates defensibility.

We continue to go where others won’t, with a market large enough for us to grow indefinitely. Our U.S. entry is the same playbook: quiet, subterranean, unnoticed. Compounding is hard to see at a point in time; most of its power emerges between years 12 and 20. Yet most people can’t concentrate beyond 20 seconds, let alone 20 years. That inability to be patient creates our opportunity.

04/06/2024 What is a compounder in your view?

We define a compounder as a business with values and behaviors that allow it to grow continuously, reinforced by a flywheel effect. Compounding starts with values and mission at the top of the flywheel and financial fuel at the bottom. To sustain that compounding, the business must consistently generate returns above its weighted average cost of capital.

A true compounder also requires a durable business system. Without a system, you cannot drive differentiated outcomes over time. Many investors focus only on metrics and KPIs, but the real foundation is mission, values, vision, behaviors, strategy, and structure. These are like Maslow’s hierarchy for organizations, the core elements that enable a company to move beyond itself and compound sustainably.

04/06/2024 What defines a compounder versus financial metrics focus?

Analysts often begin with financials, but those are outputs. Bezos says focus on inputs, not outputs. A business is built from the bottom up: ideas lead to actions, actions to habits, and habits define the future. Our mission is to help private business owners be healthier, wealthier, and wiser. They employ 70% of people in economies like Spain, the UK, the U.S., and Australia, so supporting them drives growth and meaning.

Our values are simple: be people for others, keep promises, and play as a team. The vision is to build Australia’s global accounting firm. The strategy is to double every three years in accounting, tax, wealth, and estate services across Australia, the U.S., and eventually the UK. Our advantage is a repeatable business system, a 51/49 partner–owner model, centralized management, and a strong acquisition track record. If a CEO can’t articulate their business this clearly, mission, values, vision, strategy, and structure, they may do fine but will never be great. Leadership depth determines performance.

04/06/2024 What makes Kelly Partners different and hard to replicate?

It’s difficult work. It’s easier to be a promoter than an owner. Private equity rolls up firms with 100% ownership and exits. We create long-term partnerships. The closest model is ETL in Germany, which owns over 1,250 firms with margins far below ours. Our 51/49 structure builds enduring relationships, not transactions. Compounding over decades beats quick deals. Like Buffett, we believe long-term partnerships and people-centered models outperform over 50 years.

The analogy is marriage versus serial dating. Partnerships compound trust, loyalty, and shared outcomes, like family does over generations. Treating people with dignity and unlocking their potential creates stronger businesses. Our partners sign 10-year agreements, and many want to extend because of the benefits for their lives, families, and firms. Building a business takes decades, Amazon, Walmart, Tesla, Disney all prove that. Kelly Partners is 18 years old, and for the first 10 years, people dismissed us. Now, like CBIZ in the U.S., we aim to scale from $120 million revenue to $300 million, with market cap potential from $300 million to $3 billion over the next decade.

04/06/2024 What are the values driving Kelly Partners?

Our values are clear. First, be people for others: a business must be a social service that makes others better off. Second, keep promises, if we say we’ll do something, we deliver. Third, teamwork over individualism: a team achieves more than one person. Alongside this, we aim to be a profit leader. We believe profitable businesses that reinvest are good for society. Our mission is to modernize accounting firms, make them better workplaces, deliver better client outcomes, and ultimately improve society.

21/08/2024 What gave you conviction to pursue a large acquisition in Florida?

While it looks like a large deal, it is centered on McDonald’s franchisees, which operate with standardized point-of-sale systems, global accounting methods, and consistent products. We have attended the McDonald’s Global Conference for more than 14 years, so our knowledge is deep. Our confidence rests on the quality of the leadership, the people, and the strong niche position. Compared to more fragmented businesses in unfamiliar sectors, this was less complex. It is an area where we have genuine expertise and longstanding relationships.

29/09/2024 What commonalities have made your partnerships successful?

We do not call them acquisitions, we call them partnerships, because that is what they are. We do not want to be a top company over others. We see ourselves as a service organization that lifts accountants up, removes burdens, and helps them compete. We are not interested in people selling themselves or being acquired, we want long-term partnerships.

We have never had a partnership fail. This is because joining our group is intentionally difficult. Our agreements are tough, requiring a minimum 10-year commitment. Psychological testing, online reputation checks, and extensive due diligence filter out the wrong people. We have no growth targets, no set number of firms. Our focus is simply: if we can make you better off, we want to work with you. If someone believes they already know everything, we cannot help them. Time is limited, so we want to spend it with people who want to make a difference and who we genuinely want to help.

29/09/2024 How do you help partners and teams unlock their potential?

When we go into a firm, we bring the same understanding we apply in our own business. We ask partners how they want to live their lives, whether they want to be healthier, wealthier, and wiser. Many do not have calendars or clear goals. Through our Partner Accelerator program, we help them set 10-year and 25-year goals and reset their leadership approach. If leaders are not inspiring, their people will not be inspired. So we start with leadership, then managers, and then the wider team, always meeting people where they are.

I believe there are incredibly talented people in every firm, but many have never had examples to unlock their potential. Like a personal trainer in a gym, we create an environment where they can be a better version of themselves. Leaders must own the energy and vibe they bring, and when that happens, the culture and performance of the firm transform. Too many accounting firms accept misery as the norm. We reject that. We focus on inputs, mission, values, vision, behaviors, knowing the financial outcomes will follow.

09/11/2024 What advantages underpin your business model?

We operate with a clear mission, values, and vision embedded in a unique business system. Our partner-owner-driver model and central progress team provide structural advantages. With consistent execution and long-term commitment, we believe the opportunity is real. I am proud to promote Kelly Partners as a group of outstanding people serving clients and communities. We recently conducted a strategic review with Jefferies in Sydney, which provided excellent insights.

09/11/2024 What are the results of advertising campaigns on Facebook and Instagram?

We experiment with a wide range of approaches, including social media advertising, though it is one of the less significant initiatives. These experiments are going well, and we will keep testing ideas that attract quality firms, talent, and clients. About 98% of our deals come directly through our long-term proprietary outreach, not brokers, which gives us a strong advantage. Our reputation and relationships create a flywheel effect, with many firms now approaching us directly.

19/11/2024 Could we hear from Laurence Cunningham on KPG’s strategy?

Laurence joined our Board after carefully studying the company, meeting the team, and reviewing our strategy. He affirms the quality of the business, the leadership, the philosophy, and the engagement of our people. He considers the business plan valid, the board strong, and the shareholder base high quality. Most importantly, the partner-owner-driver model has proven itself in Australia and is now working across other geographies, which he views as a true test.

Laurence’s wisdom and introductions have been a great benefit to us. Our senior team and directors are deeply curious and committed to learning and applying knowledge, and Laurence has given us significant access to ideas that have strengthened the business. Step by step, we remain confident that staying humble, focused, and energetic will deliver continued progress.

11/12/2024 Who is your ideal customer and ideal acquisition target?

Our ideal customer generates two to 100 million in revenue, while our ideal acquisition target is a firm with two to 10 million in revenue. Clients choose us because of our differentiated service experience, which you can see on our website. Firms choose us because of our track record and our ability to prove we can deliver. Our value proposition versus competitors has been published before, and it clearly differentiates us in the market.

11/12/2024 Is Australia’s long record without a recession a competitive advantage?

Yes, it is. Australia is either the richest or second-richest country per capita in the world, with the most robust economy and strong governance, even if politics can be frustrating. It is rightly called “The Lucky Country.” That strong domestic engine powers our growth into international markets.

23/12/2024 Why build a 100-year business instead of focusing on short-term gains?

We believe what gives life meaning is the difference you make for others. Our goal is to build a business that is sustainable today while planting trees for the future, where others can sit under them tomorrow. That long-term view, 100 years versus private equity’s three to five years, shapes every decision, from how we treat people to how we invest. Accounting firms are intimate, relationship-driven places. All of life is leadership, and when you run a firm over decades you see not only clients’ and employees’ lives change but also your own. Many of our partners have built businesses while raising families and building marriages, carrying decades of experience like an iceberg, most of it unseen but vital. We think firms should respect and engage older leaders, using their wisdom while transitioning leadership to the next generation. A long-term mentality makes all the difference.

04/02/2025 Can you elaborate on the 9% reinvestment flywheel and its benefits?

Each firm contributes 9% of revenues to run our central services team, which we continually invest in. For example, we now have a four-person software engineering team developing proprietary tools that improve efficiency. Alongside this, we provide full people, operations, IT, and marketing functions.

This gives partners back 25–40% of their time, improves business management, reduces working capital needs by two-thirds, and doubles profits. For a $5 million firm, joining us effectively brings $10–15 million of resources to bear on their business, compared to competitors managing on a part-time basis. The impact today is enormous and will only grow.

04/02/2025 Why would firm owners choose to work within KPG rather than independently?

We do not think of KPG as a holding company with subsidiaries. We are partners with these firms, lifting them up and taking weight off their shoulders. A partner gains more than 100 peers in a collegiate network, retains control of their own profit and loss, but also benefits from a 35-person central services team and over $1–15 million of resources applied to their business.

Most partners know what they should do but lack the time, team, or capital to execute. We provide that. Our decentralized Teledyne-style management is attractive to partners who want autonomy with support. While some individuals prefer total independence, we believe strongly in our core value that a team can do more than an individual, which resonates with most partners we meet.

04/02/2025 Do you see copycat firms trying to replicate KPG?

Yes, we do see them, particularly in the US. There are two or three groups attempting to copy our model, but they are funded by private equity. That is fast money requiring them to buy everything within three years and then exit. It is not going well, and we expect more bad news about private equity in accounting over the next three years. Our model is very different.

It has taken more than twenty years, and deals with 88 different partners, to build the position we have today. That cannot be duplicated quickly. The market is bifurcating between those who want to partner with us in a long-term, owner-aligned way versus those who want to do private equity deals. I call that the party, you see the big house, the music, the excitement, but you regret it afterwards. We have a hundred-year view, they have a hundred-second view. That difference will benefit us.

12/08/2025 How would you characterize KPG’s business approach, fixed or adaptive?

The answer to most questions is not either-or, it is and. Our mission, values, and vision are fixed, as is our strategy of focusing on accounting firms with $2 million to $10 million in revenue serving private business owners. Our 51/49 structure also remains fixed. But where to go, who to partner with, and the timing of those moves require intuition, feel, and adaptability.

We work hard on mindset and breaking limiting beliefs as a bootstrapped business. Books like Steve Schwartzman’s “Think Big” and 3G Capital’s “Think Bigger” inspire that. As Jim Collins writes, it is about maintaining the core while stimulating progress. We will not be rigid or mechanical at the expense of intuition. Our courage, energy for experimentation, and sense of market, people, and client needs guide us.

12/08/2025 How do you approach partnerships with firms, and what differentiates your process?

We have been contacting firms in Australia for more than seventeen years, and good firms know we exist. Those who truly care about their people, clients, and firms will join us. Those looking only for a quick check and an exit are not our people, and that is fine too. There is more opportunity than we can handle today.

Being in Los Angeles gives us geographic arbitrage. It means we do not have to rush into any deal, overpay, or accept poor terms. Even with a much larger M&A team, there would still be more opportunity than we could capture.

12/08/2025 How did the California McDonald’s-focused firm join KPG, and what does that say about your approach?

It took persistence. I called the principal of that firm in January 2023 when I first arrived in the U.S. but didn’t hear back until December. We finally engaged in early 2024, meeting in Florida and Barcelona. Once another firm joined, they saw the value of East and West Coast coverage and came on board. This is a relationship business. In Australia, we’ve been sending emails to firms for 17 years. Good people who care about their firms, clients and staff eventually join. Those looking for a quick payout aren’t our people.

Being in Los Angeles also gives us geographic arbitrage, allowing us to be patient, disciplined, and selective. There are more opportunities than we could chase, no matter how large we made the M&A team.

Growth

09/06/2020 How has the pursuit of growth changed since becoming a public company?

As a listed company, there are many more voices and opinions to manage. It requires Buffett-style independence of thought: being clear on the mission, explaining it consistently, and ignoring noise from people with untested ideas. Everyone has suggestions, but few have done the work. Henry Ford said thinking is the hardest work in the world, which is why so few do it.

For me, depth of preparation and research has always been central. Across my books and business, I’ve spent thousands of hours gathering insights, testing ideas, and learning. That discipline shapes how we grow the company. A colleague recently told me that working with us was like peeling an onion, every layer revealed more substance than he expected. That’s exactly how I want our business to be: disciplined, deep, and built to last.

21/09/2021 How big is the opportunity in Australia for your firm?

In Australia there are two certainties, death and taxes. Our circle of competence is Australian accounting. There are 32,000 accounting firms with over 22 billion dollars in revenues. Our segment, private business owners or SMEs, represents 12.5 billion. This year we expect 58 million in revenues, which is a small percentage of that very large market.

If we can grow consistently, reaching the top 10 firms in Australia would mean 120 million or more in revenues. With 35 percent margins, that would produce about 42 million in earnings, of which we would own half. After tax, that could be 15 million net profit. Our five-year plan targets 80 million in revenues, nearly 100 percent cash conversion, monthly dividends, return on invested capital of 27–28 percent, return on equity around 48 percent, and a 50 percent reduction in net debt to EBITDA. We think the opportunity is compelling, even if it excites mainly us.

21/09/2021 Does this approach translate to organic revenue growth?

Yes, we have grown revenue at about 30 percent compound annually over 15 years, half organic and half through acquisitions. In our industry, the top 10 firms globally did not achieve scale purely through organic growth. Acquisitions bring teams, clients, and infrastructure we could not replicate at the same pace. Organic and inorganic growth are like two wings of a bird, you need both to fly straight.

21/09/2021 Did you model your growth and acquisition strategy on another business?

Yes. Around 2005 I studied private equity firms, every founding story I could find, and every book on M&A. I wanted to build a whole company like Berkshire Hathaway at the holding level, but with operational excellence. The lesson after the financial crisis was clear: do not buy assets you cannot improve operationally. We needed businesses where we could double profits and strip out two-thirds of working capital.

At the operating level I was influenced by Disney, Walmart, McDonald’s, Apple, and Ritz-Carlton, each for their systems, branding, or client experience. Bank of America’s documented acquisition program also shaped my thinking. Constellation Software and Danaher were inspirations too, but I viewed them as drawing from the same McDonald’s-style systematization that I admire. Bernard Arnault at LVMH also influenced me. He modernized heritage luxury brands by centralizing finance and advertising while leaving local identities intact. We apply the same logic, centralizing finance, marketing, IT, recruitment, and legal, while local offices focus on people and clients.

So yes, Berkshire was the model at the group level, and at the operating level I drew from LVMH, McDonald’s, and others. Constellation is a great business with over 600 deals across 100 countries in 25 years. We study them closely, but we focus on winning deeply in our circle of competence first. For example, we set out to dominate Sydney’s private business owner accounting market before expanding. Today we are the 23rd largest firm in Australia and the largest private client firm in Sydney, with about 58 million in revenues. The strategy is clear: win at home first, then build outward.

08/10/2021 Where do you see Kelly Partners in 10–20 years?

We’ve consistently guided toward 5% organic growth plus 5% acquisition growth, targeting 10% compounding growth long term. That guidance remains valid. We’re gaining momentum with high-quality acquisitions, and our 15-year track record gives us confidence.

In our first five years, we did 10 acquisitions, then 9 in the next five, and 24 in the last five. The style and criteria haven’t changed, if anything, our standards are more stringent. We expect to deliver steady growth for many years, though acquisition activity may vary depending on available opportunities.

08/10/2021 Do you plan to expand outside New South Wales?

Every time we look to step outside New South Wales, another fantastic local firm wants to join us. I once joked we could be a top 25 firm just in Sydney, and we achieved that. We’re now in Melbourne, where we see strong opportunities, though we’re cautious given the last 18 months. Ultimately, we’ll partner wherever we find good people, but at present our pipeline in New South Wales remains very strong. We also maintain a database of more than 18,000 firms across Australia and a long list of potential partners nationwide.

07/02/2022 When do you plan to enter the Queensland market?

We have a lot of interest from Queensland, and our entry there depends on when the right firm with the right people chooses to join us. That may be imminent, but as always, we are not in a rush. We simply want to meet the right people before making a move.

07/02/2022 Do you expect higher revenue contribution from complementary businesses?

Yes, we expect our complementary businesses to grow over time. They are not our main focus, and we do not see them as offering greater opportunity than our accounting firms. However, they do allow us to better serve clients, partners, and communities. We will continue to grow these businesses moderately over time.

07/02/2022 How large is the opportunity in Hong Kong for acquisitions and growth?

We are not particularly interested in acquiring firms in Hong Kong or China. We find it difficult to align with our values, and the opportunity in Australia and elsewhere is so strong that it does not justify the distraction. In the short and medium term, we believe home games are easier to win than away games.

07/02/2022 How many people are involved in identifying and vetting acquisitions?

The acquisition team is essentially me with a yellow pad, supported by Kenneth, our CFO, and Joyce, our General Counsel and first team member. We maintain a database of about 18,000 firms, cultivated over 15 years, and hundreds are in active conversation with us. Deals often take years, one recent acquisition took 14 years to complete.

We deliberately avoid building a large acquisition team. Adding professional acquirers creates pressure to do deals for their own sake. Instead, we prefer a steady flow of inbound opportunities, reviewing them carefully and moving forward only when it makes sense. This keeps head office costs low, makes deals highly accretive, and avoids institutionalizing activity unnecessarily. We do not aspire to be the “big 5.” The big four are big, not necessarily great. We aim to be excellent, first choice advisor to private business owners, by carefully selecting firms that align with our standards. That approach will generate superior returns over the long term.

25/05/2022 How do you convince firms to join you without a sales pitch?

I’m not a sales guy; I’m a doer. I put objective facts in front of people. I show them what we did for clients and staff, and then ask what they did. Most have nothing comparable. Anyone with humility or intelligence can see the difference: clients and people would be better off with us.

The industry isn’t known for humility or wisdom in leadership. Many leaders lack aspiration for true understanding, focusing only on money or status. That shows in their behavior. I don’t mind if firms or people don’t join us. Our mantra is to make clients, people, and the community better off. If others want to stay stuck in old models that make everyone worse off, they can. Meanwhile, we’ve grown for 16 years at a cumulative average growth rate of 30% a year. Staff turnover is 8%, NPS is 65, EBITDA margin after partners’ earnings is 35%, and lock-up days are 54. We’re a public company, so all of it is true and verified. Most people won’t read it because it makes them uncomfortable.

25/05/2022 What is your process for bringing in new firms?

We run a rigorous, values-driven process. When meeting principals, I listen carefully, do they speak only about themselves, or about their people, clients, and community? Words reveal values. Then I test reliability: do they do what they say, like sending information promptly? I also look at the team, great leaders attract great people. If someone complains they can’t recruit, that’s a red flag.

If values align, we focus on private client firms, not public company auditors. We also avoid those joining just for a payout or those too egotistical to collaborate. We want partners who recognize that together we can do better, respecting what we each bring. Partnership is the spirit, bringing strengths together to make clients, people, and communities better off.

25/05/2022 Why do most firms choose to join you?

It can be for every reason and none. Some have been succession-related, like when a practitioner passes away and the family calls me the next day for help. Others have been situations where the stress on a partner’s spouse led to a breakdown, or where firms went into liquidation due to poor behavior. In each case I’ve run in to help, because I’m motivated by making a difference for the people and clients involved, not worried about reputational baggage.

That comes from mentors who shaped me early. Zig Ziglar said if you help enough people get what they want, you’ll get what you want. That became a guiding principle, help your partners, your people, your clients, your communities. Personally, I want to prove that good values and good behavior compounded over decades produce the life you want. Warren Buffett says real success is to be loved by the people you want to be loved by. That resonates with me.

25/05/2022 How long does your acquisition process take?

It varies widely. One deal took two hours, from the liquidator’s phone call to a hand-signed agreement that afternoon. We needed to get people back to work, and we knew how to stabilize the systems and clean up the mess. On the other end, a recent deal with Berger Piepers in Penrith took 14 years of conversations before it finally came together.

Most transactions fall in between. We usually start with a Zoom meeting, sign an NDA, and review numbers immediately. We model exactly what each partner will earn over 10 years, when profits will be distributed, and the base arrangements. Once firms see our transparency and integrity with the numbers, they open up about the real issues, illness, exhaustion, unsustainable workloads. That’s when we can step in, support them, and create a genuine partnership.

25/05/2022 How do you structure deals with partners in acquired firms?

I consider each acquisition as four deals: the overarching deal plus one with each partner. I ask about their families, goals, and personal circumstances, then reconcile those into a firm-wide agreement. Our view is we can always create a better situation for a partner group than anyone else because we tailor it personally and align it long-term.

Where we walk away is when people are purely money-driven. One firm demanded three dollars for every dollar of revenue. We laughed and left. Why? Because for $15 million on a $5 million firm, I could just hire the managers across the road and rebuild. We’re not interested in transactional sellers who only care about themselves. We want people with values, who care about clients, staff, and communities. And because I personally own 50.4% of our listed head company, I live with every deal for decades. I’m not a promoter planning to exit in three years.

25/05/2022 What have you learned from deals that didn’t work?

Buffett says you can’t do a good deal with a bad person. That’s proven true. When we’ve partnered with egotistical people who refuse to change or spend their energy trying to prove us wrong, those have been the most painful experiences. Sometimes we’ve still done deals in strategic locations, but I’ve accepted I may need to wait out a bad lease or a difficult partner because I think in 50- or 100-year horizons.

Most of the time, challenges come from transition, senior leaders struggling to adjust from being the main person to yesterday’s person. We try to manage that with compassion. Twice in 54 deals we’ve had true “terrorists” who were toxic to clients and staff, and in those cases we encouraged them to move on. But in most cases, with self-awareness and support, we work through the issues.

25/05/2022 How do you manage egos and filter who joins?

We approach every partnership like marriage, you have to live with the person forever. Our filter is strict. New partners sign 10-year commitments. If they leave in the first five years, they lose a significant portion of equity. They only get full market value after 10 years. That weeds out short-term thinkers and egotistical people who need immediate validation.

Average partner age is 42, and they’ve all signed on. If someone hesitates at a 10-year commitment, they’re not right for us. We also structure buy-ins clearly. Partners purchase equity at three, four, or five times EBITDA, based on the firm’s trailing performance. Higher-performing firms with strong margins and lock-up deserve higher multiples, and young partners are happy to pay because they’re joining a well-run business. Contrary to industry belief, young people do want partnership, they just don’t want it in poorly run firms.

25/05/2022 Do you help young partners finance buy-ins?

Yes, we’re prepared to vendor finance, but we require every partner to make some equity contribution. We review their net worth report and make sure they have real skin in the game. That balance keeps people committed for the long term and ensures alignment across the partnership.

25/05/2022 How much equity do partners and employees typically hold?

It varies. Partners might own 2.5%, 5%, 10%, 15%, or even 49% of a Greenfield practice, depending on the opportunity and their role. At the group level, nearly 10% of our listed company is owned by senior management, partners, and employees. We wanted no employees, only business owners, so everyone has skin in the game.

We don’t issue options or freebies. At IPO I gave each employee $1,000 of shares, and from there anyone, from an undergraduate to a secretary, can buy shares through their broker and become an owner. We also built an app called Upstream, where all incentives, bonuses, referral fees, and recognition payments are made in Kelly Partners shares. People can sell if they like, but the idea is to grow their wealth and tie everyone into ownership.

25/05/2022 What are the first things you do after acquiring a firm?

The first thing is to empower people. I ask everyone to write a list of what they would do if they ran the firm. Most already know what’s needed but lacked the resources or management to execute. We then bucket those ideas under people, processes, clients, finance, and growth, and we help implement them with fanatical execution.

Yes, we have a 110-point checklist, signage, IT migration, standard systems, software alignment. Within 12 months we bring every firm onto our single cloud-based network. We standardize tools like AE for billings and timesheets, Xero for many clients, BGL 360 or Class for SMSFs, and a stack of other consistent software. But the big impact always comes from listening to staff, acting on their priorities, and delivering the execution muscle they’ve never had.

01/08/2022 How well can you increase prices along with inflation?

We have always targeted at least 5 percent organic growth annually, with 3 percent from price increases and 2 percent from volume growth. With inflation running at 6 percent in Australia, we delivered 6.7 percent organic growth. We aim to grow organically faster than inflation and are confident we can continue. If inflation ever hit 20 percent, we would revisit the discussion, but I am not anticipating that.

16/11/2022 What is leadership’s role in creating the right environment for people?

I believe leadership’s role is to create the right environment for people to do their best work. I ask myself what I can do so our people trust us, feel we have their best interests at heart, and know we are doing the best we can for them. We have always lived by that approach, and this tool helps us express those values. It encourages what HR professionals call discretionary effort, the extra people give beyond their job description. When people are aligned and feel cared for, outcomes are very different.

We work in the accounting industry where our segment grows at about 1.5 percent per year. We have averaged 30 percent cumulative growth every year for more than 16 years. Our profitability is nearly twice the industry average, and our staff turnover is one quarter of the industry at around 8 percent compared with 35 percent. These are very hard financial benefits of creating the right environment to attract, develop, and retain people, and this tool has contributed strongly to that.

01/02/2023 What drove the half’s organic growth rate?

We’ve built a strong brand that attracts excellent firms wanting to join something bigger and better. Many firms come directly to us; out of 65-plus transactions, only 2 involved brokers. The quality of firms approaching us has been outstanding. I compare our ambition to Berkshire Hathaway, where Warren Buffett became the first-choice buyer for great businesses. Similarly, we want Kelly Partners Group Holdings to be the trusted partner for entrepreneurs looking for permanent capital and long-term stewardship rather than private equity flips.

I’m also inspired by LVMH, where Bernard Arnault has revitalized heritage brands through long-term investment, and by Constellation Software, whose programmatic acquisitions mirror our own approach. Like them, we don’t pursue empire building; we pursue sustainable, economically sound acquisitions that benefit partners, clients, and communities.

01/02/2023 What is the current status of U.S. expansion?

The U.S. office is an expansion office, not yet an accounting office. We’ve made offers on firms and are progressing due diligence. Our first team member starts on 27 February, and we’ve appointed U.S. banks, lawyers, and M&A advisors. California alone has 12,500 target firms; our aim is to acquire around 125 over time. Even if we achieve only part of that, it will be meaningful. We’ll pursue this carefully with a risk-first mindset, consistent with our “heads we win, tails we don’t lose” approach.

11/08/2023 Will you be overseeing expansion in the U.S.?

Yes. I am splitting my time between Australia and the U.S. I have spoken with many Australian firms that shifted their listing to the U.S. or are doing business there. The U.S. Consul in Los Angeles told me there are 1,000 Australian businesses in LA, yet not a single Australian accounting firm, which suggests an opportunity.

I hold my AI CPA and am completing my Californian CPA. We have strong relationships, signed our first binding term sheet now moving into long-form negotiations, and we are learning quickly about the market. With 12,500 firms in California, the landscape looks more like Australia than expected. We believe acquiring one firm, doing an excellent job, and scaling from there will provide unique opportunities for our people and clients.

11/08/2023 Can you provide more insight on the marketplace initiative?

Yes. We have built a strong technology foundation called the Kelly Partners Passport. One of our team members, who worked at Netwealth and trained in customer experience design, has returned to lead the build alongside our in-house software developer.

The Passport will give clients access to the full value of our group, particularly our deep relationships across the network. Over time, it will enable a client marketplace with advanced education and services, potentially operating as a SaaS business with a monthly subscription. While I will not forecast dollar amounts, I am confident that building a community of trust will deliver long-term value far beyond what most people expect.

11/08/2023 Will KPG expand partnerships into non-accounting services?

Yes. We see opportunities to appoint a partnership executive to build quality relationships with world-class service providers beyond accounting. In the short term, capital is constrained, so we will pursue this digitally by connecting clients through our digital-first community. We believe this will create significant long-term value and reflect our commitment to client care.

11/08/2023 What gives you confidence KPG can succeed in new geographies without its Australian buyer-of-choice reputation?

In Australia, we built our position by consistently contacting firms for 17 years. We believe success in the U.S. and U.K. will come from the same discipline, carried out consistently over the long term. We do not expect to replicate 17 years of work in 17 minutes, but we are entering those markets from a stronger starting point. Inbound interest already demonstrates traction. We will proceed steadily, beginning with small transactions, and avoid rushing into anything unsound.

11/08/2023 How are you ensuring discipline to avoid hubris or overexpansion?

We remain firmly within our circle of competence, repeating the same structure and approach that works. For example, in the U.S. we are pursuing a small acquisition under $10 million on the same terms as in Australia. We are not chasing growth for its own sake. Our discipline ensures we focus on quality partnerships and robust execution rather than expansion at any cost.

31/01/2024 Why is California an attractive entry point despite regulation and out-migration to states like Texas and Florida?

California sits between Sydney and London, has the second or third largest Australian population outside Australia, and provides a natural market for Australians moving between the U.S. and Australia. The culture is similar to Sydney and Melbourne, being open and meritocratic, and California is the fourth largest economy in the world. Importantly, it is a state dominated by small and medium-sized businesses, even though large corporations like Apple and Disney attract the headlines.

While there is net migration out, regulation and taxation actually create business opportunities. More rules mean more need for trusted accountants, and we intend to be the most trusted advisor. Los Angeles, with its large Australian expatriate community, is a logical starting point. We do not rule out expanding into Texas or Florida, but California offers a strategic first win.

31/01/2024 Can you update us on U.K. expansion?

We are searching for a “super partner” in the U.K. and see significant opportunity there. We have appointed our first team member, who previously led an international accounting network of 550 firms. Their role is to build a global network of 50 firms in 50 countries to support clients over the next 50 years.

Our strategy follows the David Ogilvy playbook: build strength in the U.K. and U.S., list in the U.S., and develop a 100-country presence through relationships that may later become acquisitions. It is a low-cost, stealth approach to building alliances, hopefully leading to future 51% ownership stakes.

19/04/2024 Why did you move to the US and focus on California?

As a founder, my vision has always been bigger than what most people can see. I started this business in a small room with $200,000 of billings and an idea that seemed crazy at the time. Today, we are the 21st largest group in Australia, soon to be top 10. But Australia alone cannot contain the full potential. The US market is 15 times larger, and the UK is six times larger, so by expanding we have effectively increased our addressable market by 30 times.

Personally, my family was also ready. My eldest son wanted to attend college in the US, my wife had published a successful book there, and we all saw opportunity. Lawrence Cunningham, Deputy Chairman of Constellation Software, joined our board and validated the idea, introducing me to leaders like Mark Miller. That reinforced the belief we could replicate our model abroad. In Los Angeles, we are building just as we did in Sydney, firm by firm, partnership by partnership. We have already partnered with two firms, including one led by a younger partner who saw that with us he could reach $15 million more easily than alone. We are proving the model in the US just as we did in Australia, with minimal capital risk and compounding benefits.

19/04/2024 How do you respond to skeptics of your global vision?

Skepticism is natural. When you are digging foundations, it looks like a muddy hole. People mocked Michelangelo while he spent years painting the Sistine Chapel ceiling, covered in paint every day, until the scaffolding came down and they saw the masterpiece. Building a business is the same. Early on, no one wanted to know me. Now, as the structure rises, people suddenly want to join the “penthouse.”

I remind investors that vision requires humility and curiosity. You may not understand everything I am doing, but I have spent decades thinking about this industry, more than almost anyone else alive. Just as with Elon Musk, people ridicule his efforts until they succeed, I am prepared to be misunderstood while we build. In Australia, we compounded consistently; in the US, we are doing the same with firms in Los Angeles. This is capital efficient, high-return, low-risk growth. Over time, the results will speak louder than any commentary.

04/06/2024 Did you see an opportunity with aging accounting firm owners?

Yes, absolutely. I saw two things. First, Buffett made his fortune buying private businesses. Second, Munger and Buffett both stressed the importance of being an investor, not a professional charging alley rates. I realized baby boomers owned these firms, they would retire, and there would be a massive intergenerational transfer of wealth. The best way to capitalize was to build a holding company like Berkshire Hathaway, focused solely on accounting firms. My circle of competence was narrow but deep, accounting, and that became my advantage.

I also took inspiration from Sam Walton, who said to go to small places, get big before others notice, and quietly compound. We applied the same principle, expanding in under-the-radar markets while building one brand, one network, one client experience. From day one, the goal was to compound at 20% annually for 100 years, to build a top-10 firm in Australia with systems, people, and processes that could scale. Heroes like Munger, Buffett, Walton, and Ray Kroc shaped the model: stay in your circle, think long-term, and build durable operations.

21/08/2024 What is the progression of opportunities in the U.K. and Canada?

We continue to meet firms in Ireland, Scotland, and across England. We are keen to act if the right partner emerges, but we are not in a rush. There remains tremendous opportunity in Australia and the U.S., so we are disciplined not to spread ourselves too thin. For now, it is an extensive search and relationship-building process until the right firm is ready.

21/08/2024 Would you consider expanding into non-English speaking countries?

It would not be our first preference. We met investors in Barcelona in March and have been contacted by people in France and Spain, but our focus is on English-speaking markets. Expanding into multiple language and jurisdictional environments, as firms like Telenom do, adds unnecessary complexity. We prefer to step over the low hurdles rather than make it more difficult for ourselves.

29/09/2024 How does global expansion differ across geographies?

I encourage people to study Starbucks’ global expansion on the Acquired podcast and then replace Starbucks with McDonald’s. Both followed proven playbooks, and accounting firms are no different. Large global accounting firms have operated across dozens of markets for over 50 years. If they can do it, so can we.

Human DNA is the same everywhere, and governments tax income, capital gains, and transactions in broadly similar ways. Our model is more fit-for-purpose for the next 25 years than the last 25, so the opportunity is significant. Expansion is not without risk, but we pursue it step by step. I see my primary role as Chief Risk Officer, and I believe my understanding of risk is as strong as anyone in this space.

09/11/2024 How large is your target market in Australia?

We see a total market of about 10,000 firms in Australia, with 10% of them being attractive targets, or roughly 1,000 firms. To date, we have done around 50 deals involving 85 partners, meaning we have penetrated less than 10% of the target set. This leaves a substantial runway for growth.

09/11/2024 What partnerships did you form in FY23 and FY24?

In FY23, new partnerships were established in the Hunter region, Leeton, Maitland, Melbourne, Palm Beach, Southwest Brisbane, East Sydney, and Brisbane. In FY24, we opened Griffith, where more than 300 people attended the launch, which was an exceptional event. Upcoming launches include Bundaberg in Queensland and Los Angeles in December. These expansions show the strength of our partner firms in prosperous and growing regions.

09/11/2024 What opportunity do you see in the US market compared with private equity?

The US has similar demand drivers as Australia, with California as a perfect entry point. Private equity dominates the market, but their model is to buy and resell firms. Our permanent-capital, Berkshire-style approach offers a long-term partnership alternative. For firm owners who see their businesses as their life’s work, entrusting them to us ensures their people, clients, and communities are looked after for decades rather than being quickly packaged for resale.

09/11/2024 What prospects do you see in the UK, New Zealand, and other markets?

We view English-speaking Commonwealth countries such as New Zealand, the UK, and Canada as natural extensions of our model. Interest from those markets is growing. The largest Australian expat communities are in London and Los Angeles, followed by New York, which makes them high-priority entry points. We do not see it as choosing one market over another. Instead, we pursue opportunities sequentially, proving our model in the US first, then expanding further. The US is the best proving ground, and success there will make the model’s potential in other regions more obvious.

19/11/2024 What progress has been made in Texas and with Qudos International?

We now have a small office and operation in Texas with a couple of deals at term sheet stage. One looks likely, another may not proceed, but the market is large and I remain very positive. We are already conducting business in Texas through our Florida and North Carolina offices.

Qudos International is now a network of about 60 firms in 48 countries. We have completed the partnership, launched a new website, and built a digital platform and app to support referrals, training, and events. It has been very well received. If we want to build Australia’s global accounting firm, we need to be in a dozen expatriate-heavy markets. Still, our core focus remains Australia and the U.S., with other markets added only when the right people and opportunities appear.

19/11/2024 Can you share an update on progress in the UK as a growth region?

The UK remains on our radar, but our overwhelming focus is on the U.S., where opportunities are greater than I had anticipated. We are concentrating on serving the firms that have already joined us there and ensuring we deliver on promises.

That said, we have seen a growing level of interest from UK firms, with a number approaching us. While we will evaluate these, our near-term priority remains executing in the U.S. where the growth potential is substantial.

19/11/2024 What is the update on UK growth through M&A?

We continue to engage with two firms in the north of England, one in Scotland, and one in Ireland. At some point, I expect we will do more there, but timing and people must be right. The opportunity is real, but my priority is delivering in the U.S. with the excellent people who have joined us. We do not want to get distracted before fully delivering on commitments in that market.

11/12/2024 Can you give an update on US expansion?
It is going very well. Our US revenue today is already equal to what it took 11 years to build in Australia. We are nearly the size we were at IPO in Australia in 2017, subject to a few other things. The model works strongly here, and results have exceeded my expectations. I thought progress would take longer, but I am very pleased.

11/12/2024 Are you also looking into acquisitions in the UK?

Yes, but they are not our primary focus. We found a firm in Scotland and another in Ireland, and we are in discussions. They are very good people, and I hope they join our group. However, our main focus remains Australia and the US.

11/12/2024 What is your focus regarding global expansion?

I am very focused on the US because the opportunity is huge. To become a global business, though, we need to be in the UK as well. We have completed the Kudos partnership, giving us access to 60 firms in 48 countries. We will grow globally through that network.

11/12/2024 Can you expand on the McDonald’s niche and future opportunities?

Globally, there are about 35,000 McDonald’s restaurants. With our position in Florida and North Carolina, where we now have more than 50% market share, and expansion already underway in Texas and the West Coast, we are building a national US presence in this niche. Through Kudos, McDonald’s international footprint opens even more possibilities. It is an exciting strategic opportunity.

11/12/2024 Will you partner with other franchise networks beyond McDonald’s?

No. We work exclusively with McDonald’s and would never partner with a direct competitor in the quick-service restaurant space. That has always been our principle and will not change.

11/12/2024 Would you expand beyond McDonald’s into other franchise networks, and what about the Australian SMSF accounting market?

We were recently contacted by a fitness franchise with over 1,000 units that needs the same services we provide McDonald’s. We believe our expertise can grow into other spaces. In Australia, we already manage around 5,000 self-managed super funds, and that continues to grow.

When it comes to selling, the best way to get a higher price is usually to have competing offers. But that is not why people partner with us. If someone only wanted the highest number, they would call private equity and run an auction. We do not pitch for clients in tenders or participate in auctions for businesses. Instead, we ask two questions: what do you know about Kelly Partners, and how do you see yourself contributing to our mission? If alignment is not there, they should join another group or sell to a financial buyer. We are not a financial buyer.

23/12/2024 Is it normal in Australia for accounting firms to list on the stock exchange?

We started the firm in 2006, my wife Rebeca and I, after seeing that while accounting firms are great businesses, they are generally poorly run compared with world-class companies like Microsoft, Walmart, or McDonald's. We believed that if we built a better environment for people, clients, and communities with a focus on private business owners and a clear strategy, we could help accountants operate stronger firms.

That led us to publicly list in 2017, 11 years after starting. My view is that over the next 25 to 50 years transparency will matter more, so being public makes sense. Many firms stay private because partners don’t want the discipline required of public companies. Since listing, we’ve returned nine and a half times investors’ capital, making us the best-performing publicly traded accounting group worldwide. In January 2023, we moved with our children to the US, settled in Los Angeles, and began building partnerships with firms here. We now have offices in Woodland Hills, Burbank, Malibu, Newport Beach, and are expanding into Texas, Florida, and North Carolina.

23/12/2024 Has the Baby Boomer leadership style driven the decline in CPA exam participation and talent entering the field?

Absolutely. The big firms controlled the CPA process so it became long, expensive, and essentially a trap for young graduates. It worked for a while, but as labor became scarce, younger generations simply opted out. They did the math and realized it was not worth it. The qualification process must be reformed, it should not take longer to become a chartered accountant than a doctor. Many of the partners I worked for did not even have degrees, yet later generations faced higher and higher barriers.

Boomer leadership has also been ungenerous, holding onto too much of the pie and staying too long, which widened the gap between aging leaders and 25–35-year-old staff. That dynamic made firms unattractive workplaces. The solution is genuine leadership transition: combining the energy of younger partners with the wisdom of older ones. We have grown 30 percent per year for 18 years straight by emphasizing values, vision, and mission. Alongside that, we ensure firms stay sharp in basic business skills, knowing their ideal clients, pricing appropriately, and presenting strong propositions. Through 85 partnerships rolled into 38 operating businesses, we have developed a 204-point checklist for transforming firms from the inside out.

04/02/2025 How do you prioritize your US expansion strategy?

We do want to focus on Australian expatriates in the US, particularly in Los Angeles, Texas, and Florida. That covers both East Coast and West Coast markets.

Our approach is based on values fit rather than cultural fit, since culture is ultimately the outcome of values. If someone believes we can help and we agree, then we are keen to work with them.

04/02/2025 What is your plan to drive organic growth at the co-ops level, and what growth rate do you expect?

Industry growth runs at 2–3%. We expect 3–5% higher, averaging around 6% once adjustments are made for the first two years of acquisitions. Initially, we often remove clients who do not fit our criteria, which reduces reported organic growth. Over time, however, the stronger client base drives sustainable growth.

Our long-term thesis is to deliver 5–6% organic growth compared to 2% CPI in developed economies, or roughly two-and-a-half times long-term inflation. This has been our approach for nearly twenty years and has proven resilient.

12/08/2025 How is the US expansion progressing, and what is the timeline for a US listing?

Our partner-owner-driver model has now been deployed five times in the US. The Texas growth partnership platform stalled, as the partner leading it could not grow that market, but we remain very interested. With our recent California acquisition and existing businesses in North Carolina and Florida, we now serve nearly 9% of all McDonald’s franchised restaurants through their owner-operators in the US.

Regarding listing, we are on the OTCQX market, and while we will not commit to a specific timeline for a US listing, it remains a focus as we build scale and credibility in that market.

12/08/2025 How does KPG view its US presence and the value of the OTCQX listing?

We now have virtually a national presence across Texas and other states. Our focus is on growing that platform business. It would have been great if our Texas partner had succeeded, but we are willing to experiment, and it has not hindered our growth. The OTCQX has been excellent because employees and partners can buy stock easily on their own platforms, which strengthens relationships and makes us more visible.
We continue to investigate other listings beyond the ASX to ensure we do the right thing for the company.

12/08/2025 What have been the main challenges and unexpected successes in international partnerships?

The greatest challenge has been the cost and personal toll of entering a new market. It has been a massive undertaking for me and my family. The unexpected success is that we have built a business from scratch that is already the size of the business we listed in Australia after eleven years.

There is more commonality in people’s values than many assume, and our model is welcomed here. After two and a half years, I am more excited than ever about the opportunity, the receptiveness of the market, and the acceptance of our approach. It is getting easier, and the sector now attracts more interest.

12/08/2025 Beyond the UK, what geographies are you considering, and what is the criteria?

We want to stay focused on English-speaking markets. Canada is very close culturally to Australia, and with the right partner it would be a logical market for us. But we are not collecting geographies for the sake of it. We are in the business of delivering per-share returns.

I want to spend my time with people who share our mission and values. Life is short, and I am happy to pursue opportunities anywhere those conditions are met.

12/08/2025 Any interest in expanding into other Australian states beyond the East Coast?

Yes, if there is a sizable, high-quality business that shares our mission, values, and vision. We have spoken to large firms in Adelaide and Western Australia over the past five years, but they have not joined us. We remain open-minded and would welcome the right partners in those states.

12/08/2025 Is marketing spend a core driver of new customers, or is it mostly word-of-mouth?

When a client joins us, they typically stay for a long time. Word-of-mouth is the main driver of new business. If we clean up a firm and free up its partners and team to deliver a higher level of service, that reputation spreads.

We also invest in brand positioning to build credibility, which helps our firms, but nothing beats excellent service delivered consistently. That remains the strongest form of marketing.

12/08/2025 How is the U.S. expansion progressing, particularly the partner owner driver model and growth partnership platform? Any update on a U.S. listing?

Our partner owner driver model has been deployed five times in the U.S. The Texas partnership stalled as the partner could not grow it, but that has not hindered us. With new businesses in California, North Carolina, and Florida, we now serve nearly 9% of McDonald’s franchise restaurants nationally, which provides strong visibility.

The OTCQX listing has been valuable, making shares accessible to employees and partners on platforms like Charles Schwab. It improves visibility and relationships in the U.S. We continue to explore additional listings beyond the ASX to ensure we find the right fit for the company.

12/08/2025 What have been the larger challenges with international partnerships, and what unexpected successes have you seen?

The biggest challenge has been the cost of getting established in this market, particularly the personal toll on me and my family. It is a massive undertaking. The unexpected success is that we have built a business in just 2.5 years the size of what we listed in Australia after 11 years. We have found more commonality in values across people than many might expect, and our approach has been very welcomed.

I am more excited than ever about the opportunity. The sector is more receptive, and doing what we do has become easier than in the past. There is increasing acceptance and interest in our model, and we face fewer obstacles compared to ten years ago.

12/08/2025 Beyond the U.K., are there new geographic targets, and what criteria will you use?

We remain focused on English-speaking markets. Canada is highly attractive, as it feels very similar to home in Australia. With the right partner, we would likely enter Canada. That said, we are not collecting geographies for their own sake. We care about returns per share and spending time with people who share our mission and values.

12/08/2025 Any interest in expanding into other Australian states such as Adelaide or Western Australia?

Yes, if we find a sizable, high-quality firm aligned with our mission, values, and vision. We have spoken with large firms in those regions over the last five years but have not reached agreement. We remain open and would welcome the right partners there.

12/08/2025 Is growth driven more by marketing spend or word of mouth?

Word of mouth is the strongest driver. When we integrate a firm well, free up partners, and deliver better service, clients spread the word. That is the most powerful marketing. We also invest in brand positioning for credibility, but nothing beats outstanding service delivery in building reputation. Clients who join tend to stay for a long time.

Financials

08/10/2021 How do you determine intrinsic value, given the share price recently passed $4?

I’ve given plenty of guidance, refer to the Owner’s Manual and materials we’ve published. Ultimately, these firms are usually private and investors never get the chance to buy shares. Kelly Partners is a rare opportunity, and well-run rare opportunities deserve a premium. I believe you now have enough information to make your own judgment, and I hope our transparency gives you confidence in who we are and what we stand for.

25/05/2022 How does your firm’s performance compare to the wider industry?

IBIS data shows average EBITDA margins for accounting firms in Australia at 19% and in the U.S. at 18%, but those numbers are not audited. Our margin is 35%, verified as a public company. We also know average lock-up is said to be 120 days, but when you dig into debtor lists it is often worse. Staff turnover is typically over 25% in many firms, with PwC recently disclosing 30%. Gallup measures global NPS for accounting firms at -18. Most firms avoid measuring employee NPS because they wouldn’t like the results.

We focus on measurement not to make others uncomfortable, but to hold ourselves accountable. We want data that shows how we can improve, for our people, our clients, and the communities we serve. That’s what matters to us.

25/05/2022 How do you maintain a 35% EBITDA margin while investing heavily in technology and fit-outs?

We don’t waste money. No marble, no excess. We buy smart, whether it’s photocopiers, insurance, or software, we negotiate the best rates. We run 18 standardized overhead lines across every firm and analyze them daily. We group buy everything, from hundreds of chairs and desks to uniform technology, so every office is consistent and cost-efficient.

When we refit, we use instant asset write-offs, coordinate all projects together, and standardize across 19 offices. That discipline makes operations cheaper, gives partners better information, and frees us to invest in people. For example, we analyze client profitability to show partners which accounts are loss-making and should either be repriced or exited. It comes down to rigor, attention, and running the business with depth and seriousness. This is my hobby, I love helping people and clients, so I’m not distracted. That level of focus drives results.

01/08/2022 What is your estimate of KPG share price currently?

The intrinsic value of the business is best calculated using Hagstrom's two-stage dividend discount model, which you can find in the back of The Warren Buffett Way. It requires two assumptions: future growth and an appropriate discount rate. I have always used the U.S. 30-year Treasury bond rate since inception because that is what Mr. Buffett himself used, and we are not involved in businesses that present any risk to us. With our deep expertise in accounting, we believe accounting firms present the lowest level of risk we can involve ourselves in.

01/08/2022 Are EBITDA margins from subscale acquisitions within expectations, and when will they rise to target?

Yes, they are within expectations. We often buy firms to establish a location even if they are subscale, knowing we can add to them. For example, in the Southern Highlands and the Blue Mountains, we expect growth to lift margins over time. On a portfolio basis, the impact is negligible.

Our base model margin is 37.5 percent. We sometimes share 35 percent, but 37.5 remains our target. With $21,000,000 of acquisitions on a $64,000,000 run rate, short-term compression is natural. We are confident margins will return to target quickly.

01/02/2023 Revenue grew faster than profit this half. Which costs increased more than revenue and which will drop going forward?

We invested about $1,500,000, mainly across brand, digital, and global workforce. Four years ago, we invested a similar amount, which helped us materially grow. These are not recurring expenses; they are one-off investments with significant long-term return. At KPG, we take a 25-year view of every dollar, aiming to build a 100-year organization. I’m very comfortable with these investments. In fact, as a major investor myself, half of that spend is my money, and I strongly believe it’s well allocated.

01/02/2023 As a retail investor, how can I calculate KPG’s share price?

Kieran, I’d suggest reading Robert Hagstrom’s The Warren Buffett Way, first edition, which contains a two-stage dividend discount model in the appendix. Put that into Excel, decide on a discount rate and growth rate, and make your assessment. Our strategy remains to buy firms with $2 million to $15 million in revenue and continue compounding as we always have.

11/08/2023 How do you calculate the intrinsic value of Kelly Partners?

I first learned valuation from Philip Fisher’s Common Stocks and Uncommon Profits and Robert Hagstrom’s The Warren Buffett Way. Hagstrom included a two-stage dividend discount model that requires estimating ten-year growth, terminal growth, and an appropriate discount rate. For me, the discount rate is the group’s weighted average cost of capital, because I know our model and circle of competence. We always aim to generate returns well above that cost.

We have guided to 5% organic and 5% acquired growth, yet have delivered 31% CAGR over seven to eight years. The truth lies somewhere between 10% and 30%. Accounting firms can endure 100 years or more, so the terminal outlook is long. Intrinsic value is therefore materially above today’s share price. As for buybacks, going private would be the ultimate buyback, and if the current undervaluation continues, I will be strongly tempted to pursue that path with quality long-term shareholders.

31/01/2024 How did you calculate the TFR on Slide 7?

The TFR was prepared by an external party. It does not exceed their terms on price and dividend paid. We have received commentary on this and will review to ensure complete accuracy. The main point is that the return is likely to be substantial.

31/01/2024 With net debt to EBITDA comfortably below 2.5, do you plan to increase debt?

Our approach is to buy businesses and then pay them off. While we could carry higher gearing, particularly if we went private, we prefer not to. Ken and I, along with the Board, are focused on “Project Fortress balance sheet” to build an impenetrable financial fortress. The dividend change is part of that strategy. We aim to strengthen the balance sheet and reduce risk over time.

19/04/2024 Why did 2023 results show lower net income and EPS?

The 2023 results reflected a clear, strategic decision. We invested $2.5 million Australian beyond our normal 9 percent reinvestment to establish our US platform. We communicated this upfront. If you adjust for that one-off investment, the growth trajectory is intact. Free cash flow and free cash flow per share continue to grow strongly, and we have actually shrunk shares on issue to exactly 45 million since IPO.

Our approach is consistent: we invest ahead of growth, then squeeze back as the business scales, then invest again. Integration is world-class, and we will never compromise on that. Short-term numbers may fluctuate, but the long-term compounding is clear.

21/08/2024 Can the discrepancy between non-controlling interest and KPG proper be explained by expenses on Page 31?

Yes. That slide completely explains the numbers. The non-controlling interest net profit before tax reflects the 49% partner distribution before tax, while we pay tax as a company. We also carry interest on debt from acquisitions, parent depreciation from office fit-outs, and significant head office costs. These include more than $1,000,000 in legal and strategic review expenses related to preparing for a potential U.S. listing. Additional investments fluctuate over time. I regard the business as having $11,000,000 net profit before tax, and to grow at the rates you’ve seen, we will continue to invest in this way.

21/08/2024 What is the current intrinsic value of the business and which valuation metric do you use?

You mentioned a 100x PE comparison, but the two real questions are: what do you expect the average growth rate of KPG to be in a two-stage dividend discount model, over 10 years and into perpetuity? And what discount rate do you believe is appropriate? If you provide those inputs, I can show you what valuation results. Fundamentally, we believe our partnerships are acquired at or below intrinsic value, with significant protection and asymmetric upside. Staying within our circle of competence gives us confidence that these are not riskier than our weighted average cost of capital. A 20% discount rate, as you suggested, would eliminate every growth stock opportunity in Australia or the U.S. That is not how we view risk or valuation.

09/11/2024 What is your profit trajectory and approach to earnings?

Our net profit after tax moves up and down modestly but trends upward over time. We aim to provide strong long-term returns without artificially smoothing results. Unlike private equity practices, we do not tune results for optics but build steadily, communicating transparently.

09/11/2024 What was discussed regarding the 2023 financial statements and auditor reports?

The annual financial report for the year ended 30 June 2023, along with directors’ and auditors’ reports, was presented for discussion. The company’s auditors, Leo Tut and Lloyd Crawford of William Barker, were available to answer questions about the conduct of the audit and the independent report. No vote was required on this item.

19/11/2024 Will KPG report revenue and earnings by geography as the U.S. business grows?

Yes, absolutely. As the U.S. proportion of the business expands, it makes sense to provide more detail in the annual report. We expect to do that when appropriate, continuing to share transparently the good, the bad, and the ugly, just as we always have.

04/02/2025 Why are different ranges mentioned in our recurring run rate NPATA, especially on the lower end?

We continue to provide ranges to help manage expectations. We are confident given our long track record of delivering consistent results. Past performance does not guarantee future results, but it does provide a strong reference point.

Personally, I tend to be conservative. Kenny suggested 12 to 13 as a range, and I told him to use 10 to 12. My preference is to talk down expectations and then over-deliver, which I believe our history supports.

04/02/2025 Do you believe US margins can reach Australian levels, and if so, why?

Yes, we do. The profit and loss structures are the same, but the US market is about ten years behind in digital adoption and modern business practices. The average partner is about ten years older than in Australia, which translates into older firm cultures. We are confident we can close that gap, typically within six weeks to two years depending on firm size, leadership influence, and partners’ willingness to change.

It is ultimately a leadership play, but our playbook is directly applicable. We are focused on securing the right businesses at the right growth level. We are on track for about 30 million Australian dollars in revenue, the same level as at IPO in Australia, achieved within two years of entering the US. We have standardized IT, management methodologies, and cultural norms, which makes us excited about long-term prospects.

04/02/2025 Can you clarify the reversal of contingent consideration?

Yes, that related to the Palm Beach acquisition in Queensland. The firm did not meet its retention payment requirements after two years, which led to the reversal.

04/02/2025 Have you considered providing a simplified non-GAAP summary of financials?

We aim to release fully audited results quickly, and we prefer investors make their own non-GAAP summaries. Craig Edwards suggested this idea, and investors can reach out to him directly for his perspective.

Competition

21/09/2021 Are you worried about competition for acquisitions?

No, we don’t see competition. Based on published data, 50 percent of firms are looking for a succession plan within five years, which creates enormous deal flow. We do not want all of that, but a big funnel lets us choose only the best firms. Not all firms are equal in values, systems, processes, people, or clients. Because of the scale, we can be choosy and bring in only high-quality businesses.

08/10/2021 Why have other ASX-listed accounting firms struggled?

I’ve been in this industry since I was 18, almost 30 years now, and I’ve studied it closely. The patchy history of listed firms comes down to leadership and values. Many were run by non-accountants, and that disconnect hurt performance.

The four listed groups, Hearts, Stockford, WHK, and CountPlus, shared core issues in governance and strategy. Leadership rooted in professional expertise and values is essential in this business, and without it, those firms underperformed.

08/10/2021 Why did previous listed accounting firms struggle?

The first reason is that they were conceived purely as financial transactions by promoters who owned very few shares themselves. Never buy shares in a company run by a promoter CEO with little personal stake. Second, those businesses were led by people without deep accounting experience. Imagine me deciding to run a coal mine, it wouldn’t go well because I don’t know how. Similarly, those firms were run by financial planners or bankers, not partners who had grown through chartered firms and understood the business. Finally, structure matters. Roll-ups don’t work in professional services. Our 51/49 partner-driver model creates strong alignment, reduces working capital by two-thirds, and delivers far better returns.

07/02/2022 Have you looked at ECIT in Norway as a programmatic acquirer of accounting firms?

Yes, we have looked at ECIT and believe it is a good business. They focus on accounting and IT, and while we may one day expand in that area, our current accounting opportunity is already significant. ECIT is structured differently, with a two-class share system allowing more capital, debt, and larger acquisitions while maintaining control. Some Scandinavian investors have urged us to explore similar structures. We expect to meet ECIT’s senior management soon to learn more.

01/08/2022 Are acquisition opportunities increasing?

Yes, opportunities are increasing, though we remain selective. Over the last 12 months, we bought three superb groups of about $5,000,000 revenue each. We are humbled these firms entrusted us with their businesses. We believe our branded offer, business quality, and progress make us attractive to firms that want to operate at the highest level.

01/02/2023 Does KPG aspire to compete for big 4 clients at the top end of town?

Definitely not. I started my career at Pricewaterhouse, and I’ve always said the big 4 are the big 4. I don’t believe they are excellent for private clients. Our focus is on driven, successful private business owners and entrepreneurs, often first and second generation, who work long hours and thrive on the energy we provide. That’s who we serve and who we want to keep serving.

01/02/2023 Among competitors, who do you consider the gold standard?

I’ve never looked to accounting firms for inspiration. My business heroes are Disney for people, Walmart and McDonald’s for process, Four Seasons and Ritz Carlton for clients, and Warren Buffett, Bernard Arnault, and Mark Leonard for finance. Those are the gold standards I look to.

11/08/2023 Are accountants from PwC, KPMG and others seeking roles at Kelly Partners?

Yes. The employment market has shifted significantly. A year ago, KPMG was calling our offices offering our staff 30% pay rises without an interview. That has completely stopped. Over the last two years we faced the toughest talent environment I have ever seen, but in the last six months conditions have improved.

We have done exceptionally well in attracting and retaining top talent. Our mission and values resonate with the best people in the industry, and that cultural alignment has become a differentiator for Kelly Partners in recruiting high-caliber professionals.

11/08/2023 How do you approach recruiting talent from big four firms?

We think conditions will improve over the next few years. Historically, we have not targeted big four firms because we are not convinced their people always share our mission and values. Instead, we look for the top 2.5% of talent who align with our purpose. Some of these individuals may come from large firms, but we are very selective. We will continue adding exceptional people whenever the opportunity presents itself.

11/08/2023 Have you implemented price increases or felt margin pressure?

We have not implemented material price increases. The accounting talent market is very tight, which creates pricing power. Some accountants are hesitant to charge what their work is worth, but we are encouraging partners to build the confidence to do so. With a shrinking supply of accountants, clients will inevitably face higher costs over the next five years, and firms will gain more pricing power than in decades past.

04/06/2024 Does Kelly Partners have pricing power during inflation?

Yes. Organic growth has been around 6% over five years, but the bigger factor is talent scarcity. Over 10 years, the number of accounting graduates has halved, and only half of those go into public practice. With limited supply, firms like ours can raise prices more confidently. If a client resists, they’ll struggle to find alternatives. In the U.S., I’ve seen firms raise prices far more aggressively than in Australia. Given our quality and the market shortage, we expect strong pricing power for years.

09/11/2024 How do you benchmark KPG against peers like CBIZ?

We compare ourselves with leading global compounders and with CBIZ, the only listed accounting firm in the US. They are a strong company, and being evaluated side by side with them would give us credibility in the US market, especially in California, the world’s largest economy. This visibility could attract firms interested in joining us and reinforce our reputation through performance.

11/12/2024 Do you expect AI tools to increase or decrease accounting work, and do sellers usually involve competing offers?

AI tools will increase the amount of work we can do, not reduce it. Politicians will also continue making more laws, which adds to our workload. On deals, 99% of the more than 80 partnerships we have done were exclusive proprietary opportunities, not competitive auctions. That was also the case in Florida. Two other parties had tried to buy the firm in the past two years, but when I pursued them directly, they were keen to partner. They chose us because our 51/49 model is long-term, not private equity, and keeps them as true partners rather than employees. That proves our model works in the US market.

04/02/2025 Do you see concentration risk in focusing on McDonald’s franchisees?

No. McDonald’s franchisees are a small part of the group overall, though a meaningful US opportunity. We do not intend to service other quick-service restaurant competitors, and we remain focused on this niche.

12/08/2025 Are other firms with quick-service restaurant clients a priority for acquisition?

No. We are focused on McDonald’s. We have about 20% of the franchisor market in Australia and nearly 10% in the US.

12/08/2025 Are other firms with quick service restaurant clients a priority for acquisition?

No, we are very focused on McDonald’s. We have about 20% of the franchisor market in Australia and nearly 10% in the U.S. With McDonald’s operating in 120 countries, the opportunity is large enough for us to stay concentrated.

We are part of the Kudos Network, with six firms in 48 countries. The first partner has already joined us in Ireland on a 51-49 basis, and we see potential for others to join, allowing us to expand further into McDonald’s businesses globally.

Operations

09/06/2020 How has business and marketing changed over the last 15 years, and how have you adapted?

Too many people overemphasize change and underappreciate the fundamentals. The core principles of marketing, product, price, place, promotion, haven’t changed. Yet if you ask most business owners to articulate their unique selling proposition, their four Ps, or their activity map, they can’t answer. Instead they want to jump straight to tactics like Facebook ads without doing the groundwork.

When advising clients, I often find their “plan” is little more than an empty page. Real value comes from deeply understanding your positioning, brand, and fundamentals. Books like Positioning by Ries and Trout, The 22 Immutable Laws of Marketing, and The 22 Immutable Laws of Branding are still unmatched, yet very few people have read them. If more business owners mastered those basics before chasing fads, they would be far more effective and adaptable.

09/06/2020 What are the biggest business and marketing changes you’ve observed in 15 years?

The fundamentals matter far more than the latest shiny platform. Most owners can’t articulate their four Ps or their unique selling proposition, yet they want to advertise on Facebook. Fundamentals like positioning and branding, covered brilliantly in Positioning, The 22 Immutable Laws of Marketing, and The 22 Immutable Laws of Branding, are timeless, yet rarely studied. The biggest change most people could make is to master those basics.

Technology hasn’t created new needs; it has created better ways to meet old ones. Uber is a new way to take a taxi, Airbnb a new way to stay in a hotel, Afterpay a new form of lay-by. The real challenge is not fads but the widening gap between people’s stated values and their actual behavior. We see it in money: people say one thing, but their accounts reveal another. Businesses that help close that gap, aligning values and actions, create happier, more congruent clients and stronger financial results. The internet accelerates transparency and personalization, but people themselves have not changed as much as they think. History shows far bigger disruptions, world wars, Spanish flu, the first car or refrigerator. Today’s changes are significant, but not unprecedented.

09/06/2020 What practical steps should business owners take to survive and grow during a downturn?

The first step is to reduce personal financial demands. If you own a two million dollar house with a $1.5 million mortgage, sell it and downsize. The biggest cost in most small businesses is the owner. Lowering personal expenses reduces the pressure on the business, making it easier to adjust. Once you’ve done that, cut unnecessary business expenses, tighten payment terms, get deposits upfront, and ensure you’re not carrying clients who don’t pay.

The next step is counterintuitive: don’t stop marketing. Most owners pull back when times get tough, which is a mistake. During this downturn we launched a new book, ran Fire Up 90 and Fire Kids 30 programs, delivered free client workshops in a closed Facebook group, updated a daily stimulus page, launched our podcast Be Better Off Show, and began weekly radio segments with Ray Hadley answering small business questions. We even sent out decks of accountant jokes to keep our people smiling. I’m working 50% more hours than usual because in a crisis, you control what you can and act decisively. Doubling down on service, outreach, and visibility creates opportunities while others retreat.

09/06/2020 How should businesses think about marketing spend during a downturn?

Marketing is not optional, it’s as essential as employment contracts. Too many owners look at it as a quick place to cut costs, but if you stop marketing there will be a gap in your revenue later. I believe you should aim for a three-to-one return on marketing, and you must have a clear sales process in place to turn awareness into actual clients.

Before cutting marketing, owners should first look at waste: electricity bills never checked, stationery ordered by the ton, overhead roles with little output. Those savings are real. But marketing is an investment. It only works if the leader is committed, prospecting daily, visiting customers weekly, and personally selling. Private businesses reflect the attitude of their owners, and if the owner doesn’t value selling, no marketing agency can save them. The organizations signing new clients right now are the ones active and engaged, not those who turned everything off.

20/07/2020 What should an accountant do?

An accountant’s role is to help clients get organized, clarify their goals, and support them in achieving those goals. Compliance work like preparing accounts or audits should sit within that broader framework. When you connect the work to clients’ hopes and aspirations, it becomes meaningful. You are working for people and families, not just producing forms.

If you like helping people, accounting is powerful because one of society’s biggest challenges is financial literacy. Accountants can reduce clients’ financial stress by helping them understand and better use their money. Accounting is not an academic exercise; it’s about measuring progress. As Harvard professor Teresa Amabile writes in The Progress Principle, what people value most is a sense of progress. That is what I want to deliver to our people internally and to our clients. If you can help both your team and clients understand and achieve progress, you’ll love the work and it will be truly meaningful.

20/07/2020 What is an audit?

Audit is about ensuring the integrity of a financial system. The person doing the audit must recognize that ordinary people, including their own family and friends, may have their superannuation invested in those companies. That makes the work vitally important. Too often, people today are highly self-focused, which makes it harder to find meaning in work. The way to overcome that is to take your eyes off self-interest and focus on the difference your work makes to others.

Life ultimately comes down to values and choices. When I lost my job at 22, I had time to study, complete my Chartered Accountant program and master’s in tax, but more importantly, I worked on myself. Few people stop to ask why they believe what they believe or whether their choices are serving them. I was lucky to learn that lesson early. Every seven years since publishing my first book in 1998, I’ve stopped to write another, using it as a way to pause and reflect on where I’ve spent my time and where I want to spend the next seven years. That practice, combined with experiences like losing my brother at 45, has kept me focused on living and working with integrity. At Kelly Partners we apply that by ensuring our people do meaningful work, with clients they respect, and for causes that matter.

21/09/2021 Do you spend most of your time evaluating acquisition targets?

I spend most of my time looking after the 54 equity partners in the businesses we own. The next most time is spent speaking to firms that may join the group. The third focus is on high-quality candidates to join our businesses. My role centers on people, the right partners, the next generation of firms and leaders, and the high-performing individuals we want in the business.

08/10/2021 Can you update us on the OS Brokers partnership?

We continue to work with OS Brokers and have appointed a new senior leader. It’s a 10-year initiative, and we’re excited about its long-term prospects.

07/02/2022 How do you ensure a partner does not go rogue and damage the group’s reputation?

That risk exists in any business with people. Our values and behavior standards are central, and we conduct annual quality reviews of every partner. The Institute of Chartered Accountants does this only once every seven years. We also provide quarterly training and hold monthly partner meetings. While risk can never be eliminated, we believe our processes give us a strong chance of avoiding such issues.

07/02/2022 How does KPG ensure service quality remains high and consistent across offices?

We have a detailed and rigorous integration and quality review process. While the Institute of Chartered Accountants reviews firms every seven years, we review every partner annually and expand the checklist by at least 50 percent beyond industry standards.

We also provide extensive training and development, which together ensure high quality across all businesses. Quality is a foundational value at KPG, visible in everything we produce and the way we operate. It is also central to our risk management approach and long-term success.

25/05/2022 Does this level of discipline mean you push staff harder than other firms?

Some might think so, but it’s not about pushing harder, it’s about teaching people how to work. Most accountants have been taught how to prepare a tax return, not how to manage work. We train juniors on prioritization and organization. If they have 10 jobs, we help them plan when each will be done, put it in the diary, and manage inputs so outputs are right. Managers then manage priorities properly so juniors don’t burn out.

I tell the team: if your calendar is empty, I’ll fill it for you. Successful days start with planning. Everyone sees everyone else’s calendar, from my schedule to the most junior’s. Managers’ jobs are bottom-up: make the most junior person successful first, then the next. If someone fails, I look at the leader who hired them. We hire for life, not convenience, and we run a 17-step recruitment process to ensure commitment. Once you bring someone in, you’re responsible for their success. If they fail, it’s on you as the leader. I say the same to clients, if you think your spouse is the problem, you chose them, so start by looking at yourself.

25/05/2022 How do you view employee potential and retention?

At Kelly Partners we believe Steve Jobs and Nelson Mandela were once employees of organizations that failed to lead them. Jobs was dismissed as eccentric at Atari; Mandela left law. Imagine if Jobs had been kept and nurtured. Most people grow up around average examples, so they don’t recognize human potential. Our role is to help people become the best version of themselves. Some leaders fear that if people grow too much, they’ll leave. I see it differently, if someone like Mandela worked here before achieving greatness, that would be an honor.

A good example is Dave Sharma. I met him in Israel when he had just stepped down as ambassador and wanted to enter politics. I offered him a role with us, paying him well, making him a partner, and giving him time to pursue parliament. If he failed, we gained a talented team member; if he succeeded, we contributed to something bigger. He eventually entered federal parliament. That’s the privilege, helping people achieve their dreams. By being generous, brave, and values-driven, we create a different culture than most accounting firms.

25/05/2022 How do you manage salary pressures and talent shortages?

I find the commentary amusing. Recruiters struggled during COVID because no one moved, and now there’s talk that everyone leaves for a pay rise. To me it depends, are your people “dating,” constantly looking for the next offer, or “married,” enrolled in a mission? If they are engaged in meaningful growth, you can keep paying them more as the business grows. My goal is to grow the business for our people, not myself.

We’ve always aimed for 5% organic growth and 5% acquisition growth, though we often exceed that. No significant firm has grown without acquisitions. It’s like asking a bird which wing it prefers, organic or acquisition, you need both. Organic growth matches long-term GDP; acquisitions allow us to onboard new workforces when client demand spikes. Since starting, we’ve completed around 54 partnerships, helping retiring baby boomers manage succession while protecting their people and clients. I see that as a service to the profession.

01/08/2022 Why is there one office in Hong Kong when KPG is largely Sydney based?

Ken has been in Hong Kong for six years. He came to me with tears in his eyes and said he loved working at Kelly Partners but his mother wanted him back in Hong Kong. I told him to call her and say she could have him back once he opened an office for us. That story reflects how our business has always been talent led. If talented people want to open an office on Mars and it works, we will support them.

I also believed that by placing Ken and his finance team in Hong Kong we would learn to work remotely and develop a more global perspective. That office now has ten people, and it has acclimatized our group to cross-border collaboration.

16/11/2022 Did using Upstreet also help reduce corporate governance or HR workload?

Yes, absolutely. Upstreet manages everything for us. The most complex task we have is transferring money from our bank account to an Upstreet account. They then buy the shares on market. It is non-dilutive for the company and administratively very easy for us.

16/11/2022 What are your thoughts on managing personalized versus company-wide approaches to benefits?

All of life is like dating. You need to turn up as your best self, and a company can do that on a company-wide basis by living its values. Personalization is even better. For example, if someone loves Ferrari and you give them 5,000 dollars worth of Ferrari shares for a recruitment referral, that has extra impact and shows attentiveness. But most impact comes from consistently turning up the right way as a business.

We are not trying to motivate people with share grants or other benefits. Instead, we aim to create the right environment, animate our values, and model behavior. I believe this flywheel of good values compounds over time. It also helps people who do not align with our environment to self-select out, which is a good thing. At the end of the day, ownership can only do good for the business and for our people.

01/02/2023 With more firms under KPG, are you concerned about managing them and maintaining quality?

We run a partner owner driver model, which we invented and trademarked. In every deal, we own more than 50%, and the partners own the balance while operating the business. We don’t run firms, we partner with owners and drivers, supporting them to do their best work while aligning with our values. The number of firms is not a problem; the industry has examples of much larger global groups managing successfully. We believe we can also do this well over time, without rushing.

01/02/2023 How long before acquired businesses achieve target EBITDA margin?

We approach it as a portfolio and work closely with operating owners. Our track record shows we can generally improve businesses within 12 months. If firms stay subscale, it’s harder, but we remain diligent. Personally, I spend nearly every waking hour, except Sundays, focused on this, and Kenny works with me very closely. We’re making strong progress.

11/08/2023 What is the purpose of setting up an office in India?

We noticed recruitment times in our group increase from 20 days to 24–25 days, even with only six open roles. Since many employees prefer remote work, it makes little difference whether someone is three suburbs away or on the other side of the world. Building a global business requires a global workforce, so we want to strengthen our ability to work effectively at distance.

We partnered with Eisenhower and a large U.S. space firm to establish a facility in India with capacity for 60 people on a two-year WeWork-style lease. We are starting conservatively, placing some team members there and learning how to lead and manage remotely. Over the last five years, we could have run 10% more people if we had access to such a model. These team members can supplement our local workforce, supporting growth and flexibility.

11/08/2023 How are central services and IP fees allocated?

We charge 9% in total: 6.5% for services and 2.5% for IP. These funds are invested intelligently to strengthen our firms and give them 25–40% more capacity to focus on clients, people, and communities. Beyond that, we deliberately do not disclose further detail, as it is not in shareholders’ interests to share the proprietary advantages we have developed.

11/08/2023 What is being done to improve debtor days?

Our debtor days have improved from 46 to 42, which we consider excellent given today’s more difficult economy. That represents about a 10% improvement despite tougher conditions. We use a disciplined and unique communication process across firms, which we do not disclose publicly, but the results speak for themselves.

11/08/2023 What are the challenges of financial integration as KPG expands across jurisdictions?

Speaker 2 (Ken): We constantly explore technology to manage integration. This year we added U.S. and mobile offices with different currencies and jurisdictions, yet produced financial results without difficulty. Our Hong Kong team, now 10 people, has operated for eight years, supporting integration and outsourcing CFO work for clients. Our ability to publish consolidated results quickly demonstrates our strong systems and commitment.

Speaker 1 (Brett): Running a Hong Kong office for eight years gave us valuable experience operating across jurisdictions. Tools like Microsoft Teams have made global collaboration seamless. This posture has opened exciting opportunities in new markets, such as the U.S. and U.K., where we can partner with like-minded firms.

19/04/2024 What is the Kelly Partners Group business model?

When Bill Gates and Warren Buffett were asked what matters most in business, they both answered “Focus.” That resonated with me. I realized that in accounting, we were standing on diamonds under our feet, an industry that would never disappear, because taxes only grow. After my father’s experience with a dishonest accountant, I wanted to build firms that truly serve clients. My vision was to create the world’s best accounting firm for private business owners, typically with $2 to $10 million in turnover.

We built Kelly Partners on four pillars: people, processes, clients, and financial discipline. Like Disney, we aim to attract the best people. Like McDonald’s, we systemize processes so what we promise gets delivered. Like Walmart, we grow quietly but relentlessly. For clients, we created a unique service model that provides clarity and a 10-year plan for their family and goals. Financially, we operate as if Buffett himself were in charge, focusing on profitability, working capital efficiency, and building a 100-year mission-driven organization rather than chasing short-term size. Our holding company owns the business system, which can double firm profits, cut working capital by two-thirds, and return 25–40 percent of time back to the partners, creating a true flywheel for growth.

19/04/2024 How does the 51/49 partnership model work, and why is it unique?

Our structure is built on a partnership mentality. At 51/49, everything is shared, profits, losses, and decisions. It means both sides win or lose together. That model removes the politicking common in firms with five partners owning 20 percent each. We maintain control for reporting and consolidation, but practically, decisions are collaborative. In 18 years, I have never once had to enforce my 51 percent. Partners know leadership means making decisions, and no decision is worse than a wrong one.

We also require a 10-year commitment. Compounding does not show up in year one but from years 11 to 20. By staying the course, partners see financial compounding, relationship compounding, and community compounding. Add to that a central management team funded by a 9 percent reinvestment of revenues, 62 percent as a management fee and 2.5 percent for IP. This reinvestment builds unmatched resources: software engineers, marketers, recruiters, HR, and finance specialists, all supporting local firms. It creates a self-sustaining, capital-efficient flywheel. With 95 equity partners, this 51/49, 10-year, 9 percent model is entirely unique and extraordinarily powerful.

19/04/2024 What does the ideal Kelly Partners Group partnership look like?

The ideal partnership is led by people who share our values. Our values are simple: integrity, long-term commitment, and a focus on making people better off, healthy, wealthy, and wise. We look for founders who care about their people, their clients, and their community, and who want their legacy preserved.

When we meet partners, we ask whether they want to sell to private equity, where their people are treated as assets to be traded, or whether they want a model that honors what they built. The ideal partner wants to stay engaged, keep their reputation intact, and see their firm endure for decades. With our systems, capital, and support, we can double profits, reduce working capital by two-thirds, and give back up to 40 percent of their time. For the right partner, that combination is life-changing.

19/04/2024 What qualities do you look for in an ideal partner?

We look for three things. First, they must be people for others, someone who puts making others better off ahead of their own self-interest. Second, they must keep their promises; if they say they will do something, they would rather die than not deliver. Third, they must firmly believe that a team can achieve more than an individual. When we see those qualities in the leadership of a firm, we know we are onto something.

We typically partner with founder-led firms, often built over 30 years or more with the founder’s blood, sweat, and tears. These firms are their “baby,” often more consuming than their actual family, and they reflect a deep commitment to people, clients, and community. The firms we target usually generate $2 to $10 million in revenue, focus on privately held family businesses, and are led by people who love their work but are tired of carrying the entire burden. They want succession, time with family, and confidence that their firm will endure. Our model provides exactly that, and we are finding resonance in markets from Scotland to Texas to Paris.

04/06/2024 What is the Kelly Partners business model?

We want to be in a business with tailwinds. In developed countries, politicians on both the left and right want to increase taxes. Since World War II, no country has reduced taxes except the U.S. under Trump. Multinationals and the poor largely avoid taxes, leaving private business owners to carry the load. That’s our focus: we serve private business owners, not multinationals or individuals without taxable income. We stay focused, avoid distractions, and build a model that gives partners better businesses and better lives.

Our structure is unique. We buy 51% of a firm, solving half of the succession issue, then double its profit, cut working capital by two-thirds, and give partners back 25% of their time. In return, they pay us 9% of revenue: 2.5% for IP and 6.5% for shared services. That reinvests over $10 million annually into these firms, strengthening them with less stress on partners. The model delivers 30%+ ROE, 25%+ ROIC, 100% cash conversion, and EBITDA margins above 32.5%, two to three times industry norms. We believe we can repeat this thousands of times, similar to Constellation Software in vertical markets, building Australia’s global accounting firm. Through Kudos, we now have presence in 45 countries, many of which could join our network.

04/06/2024 What is the purpose of the India office?

In early 2024, we opened a fully branded Mumbai office with about 36 people. This is part of our effort to build global capabilities and train partners to work cross-border. We already had a Hong Kong office for nine years, so India was the next step. The goal is to build muscle for managing a distributed workforce, so if a young person wants to live in Spain, they can take their laptop and continue working for Kelly Partners. The investment was small, mainly a bond for the office and travel costs, with no acquisition cash outlay. It’s about building future capacity incrementally.

21/08/2024 When businesses are merged, has there been any customer loss?

Not typically. We do not expect to lose many clients when we acquire a business, though occasionally some leave. The churn rate is so low it is not worth measuring. This has been consistent across more than 50 deals and 80-plus partners over 18 years.

21/08/2024 How are you managing multi-continent acquisitions with Brett in the U.S. and Kenny in Hong Kong?

It is not complicated. Many firms have known us for years, and when they are ready, they reach out. We hold discussions over Teams or Zoom, then visit when appropriate. This approach has been especially effective since COVID, as it allows for private, flexible meetings. Due diligence is done digitally through our data room system. We meet people in person to build relationships, but the combination of long-standing connections and digital tools has made the process efficient and effective.

21/08/2024 Have any acquisitions in the last 12 months failed to meet expectations?

No. As Charlie Munger says, the key to a successful marriage is low expectations. We do not set unrealistic expectations for our partner firms. Instead, we hold high standards for ourselves in what we deliver. Over time, by treating people well, we see strong results. Financially, the businesses are performing tremendously well, and I am consistently impressed by the ingenuity, commitment, and contributions of our partners. While we remain vigilant, I am very happy with all partnerships formed in the last 12 months.

21/08/2024 Why did the Florida acquisition command a higher multiple?

We paid 1.25x revenue, with 78% upfront and 22% deferred over five years. For a 40-year-old firm with dominant market position, strong partners averaging just over 50 years of age, and a valuable McDonald’s niche, we believe the price was fair. When modeled through a discounted cash flow, the structure proves attractive. This acquisition gives us meaningful scale in the U.S. and justifies the time and investment we are committing there.

29/09/2024 How do you ensure successful integration of acquisitions, and what role does culture play?

Culture is often misunderstood. It is an outcome of having people aligned to mission, values, and vision, and reinforced through strong operating performance. For us, our mission is to help private business owners, who employ 70% of people in Australia, the US, and the UK, be healthier, wealthier, and wiser. We attract people who have the heart, experience, and expertise to help business owners. We screen for values: putting others first, keeping promises, and being team-oriented. We use three psychometric tests and a structured selection funnel to find these people.

We also look for people who share our vision of modernizing the impact accountants can have, being proactive, and delivering our unique service system. If someone aligns with our mission, values, and vision, they integrate well into our operating system and perform strongly. That creates the flywheel others call culture.

09/11/2024 What operational updates can you share from the US and India?

In the US, we are taking capital-light steps to build a differentiated business, including supporting Australians there. We opened a group office in Malibu, a representative office in Newport that will be staffed within six months, and signed a binding term sheet in Los Angeles, where we expect to begin trading in December. In India, we have grown from a start-up to 32 people, training the team and partners to operate across borders. The facility there can accommodate 60 members, and we expect strong economics once filled over the next 12 months.

09/11/2024 How are you progressing with integration and digital initiatives?

Our day-to-day focus has been on integrating nine deals in six months, bringing all those businesses back to expected operating margins. In digital, we are building a single point of truth across systems to give partners better client visibility. For our top 20% of clients, the Kelly Partners Passport will provide access to unique opportunities within the group, shaped by partner and director feedback.

09/11/2024 What is the purpose of the India office?

We established the Mumbai office to expand access to talent that is scarce in Australia. It is a fully branded Kelly Partners facility with a first-class work environment for fully qualified accountants. This approach allows flexibility, as staff in India work either from home or from the office, just as in Australia. It expands the pool of professional talent available to support our global growth.

09/11/2024 How are you building the team to strengthen acquisitions?

Six months ago, we appointed someone full time to run a digitized, automated outreach process, which has tripled the number of firms contacted. We are working with professional search groups in the US and UK, and partners in our group are acting as scouts to make introductions. I personally meet with firms almost daily. At the same time, we are careful not to build an oversized acquisitions team that could create pressure to do unnecessary deals. Instead, we balance focus and discipline, ensuring we only pursue opportunities aligned with our long-term mission.

11/12/2024 How much freedom does the M&A team have, and updates on the Texas growth partnership platform?

We are running a group of 12 scouts, each with access to our proprietary tool to find firms in their region. That gives us 12 times as many people sourcing deals, though it will take about five years before they are as effective as the Constellation team. In Texas, we have two firms at term sheet stage that should materialize into deals, with potential for between five and eight million US dollars in revenue by Christmas. Michael is working hard on those, and I have been coaching him through the process. The model is working well and can be rolled out in other markets. For example, I just spoke with a young guy in London and another group in France interested in building something similar, though we are not rushing to expand everywhere at once.

All scouts bring deals to me, Ken, and Joyce for a structured review process. We handle legal, due diligence, modeling, and negotiations centrally. We will not make it a free-for-all since getting a deal wrong is costly. My biggest mistake at KPG has been over-promoting people. I believe in their potential, but sometimes they do not grow as expected. Another challenge is protecting culture from mercenaries, as success attracts people who want to learn quickly and leave. To counter this, we share books like The Motive by Pat Lencioni and The Rack We Built by Lorenzo Gomez, which show how to hold culture and retain partners. Partners personally guarantee their involvement, own equity, and sign strict agreements. We prefer fewer, committed partners rather than many who are not aligned. Compared with private equity, which is transactional and short-term, we aim for a Berkshire Hathaway style. If someone partners with Kelly Partners, they deal with me directly, and we keep our promises. After nearly 20 years, we have a proven record that most PE firms lack.

23/12/2024 Did Australian firms also suffer from partners prioritizing short-term gains?

Yes. There are missionaries and mercenaries, self-centered people and other-centered people. Many Baby Boomer partners were self-centered and short-term focused, pulling as much cash as possible from their firms. The partnership structure discourages reinvestment, so leadership often failed to commit to the long-term health of the business. That made firms unattractive to young talent, who rejected outdated leadership.

We believe the only fix is leaders with mission, values, and vision. Our model proves you can make more money this way in both the short and long term. But the easier route for many has been to sell and walk away. We instead partner with founders who poured their lives into their firms, care about their people, and want a permanent custodian. Our role is to support them, lift the firm up, and centralize administrative burdens so they can lead and grow with purpose.

04/02/2025 Can you shed some light on the franchise change for business development strategy?

I would not describe our business as a franchise, although it has some franchise-like elements such as shared services and shared brand. We learned from McDonald's and other great franchises, but instead of a system fee we operate with a shared services team and a direct equity interest. That ensures real alignment.

We have pursued this strategy for nearly twenty years, focusing on firms generating $2 to $10 million in revenue, typically operated by founder partners who want to make a difference and share our values of doing the right thing by others, keeping promises, and knowing that a team can achieve more than an individual.

04/02/2025 Do you survey staff at acquired firms for satisfaction, and is churn higher or lower than expected?

Staff churn in acquired US firms has been very low, lower than expected. We do not formally survey staff because it can be counterproductive, like asking a spouse weekly if they love you. Instead, we focus on treating people well and moving the business forward intelligently.

We have found very good people in these firms, and we are confident about building a core group aligned with our mission and values.

04/02/2025 What is your strategy for technology and retaining people in headquarters?

We are decentralizing our global headquarters team. We have already moved staff to and from the US, and will continue building a globally decentralized structure.

To retain talent, we are introducing a long-term incentive program. We bought shares in the business and issued them on a ten-year basis to key team members, so their value grows with the business.

04/02/2025 How long does it take to improve OpCo EBITDA margins, and what do you do?

We could explain, but we will not. One of the clear lessons from my time in Toronto was to say less about how we execute. What I can share is that we consistently double EBITDA margins, guided by a 206-point checklist developed over twenty years.

The improvements typically take up to two years. Sometimes senior partners resist change, which slows progress. Ultimately, the process is about two hundred small steps applied consistently to achieve a 100% improvement.

04/02/2025 Is there a difference in Net Promoter Scores between Australia and the US?

Not yet, because we have not fully run NPS in the US offices. We expect to have that data by June 30. Historically, firms that have been with us longer show very high NPS, while newly joined firms start lower and improve over time. We expect the same trajectory in the US.

12/08/2025 Which functions remain centralized, and which are delegated?

We publish a progress pyramid with nine centralized functions. Three functions remain local to operating partners: their people, their clients, and the leadership of the brand.

12/08/2025 What are your thoughts on AI in accounting and retaining talent?

AI is a real opportunity. We have appointed a senior executive with nearly ten years running IT to lead our AI program. We have mapped use cases across every position and are training our people in core applications. We will be very aggressive in adopting AI because it makes our people far more capable, like giving someone ten arms instead of two.

Talent retention remains the same as always. You must be an attractive proposition across health, wealth, and wisdom. That is how we keep great people from leaving the profession.

12/08/2025 Do functions remain centralized or not?

We published a progress pyramid with nine centralized functions and three that remain local. Local partners focus on their people, their clients, and leadership of the brand. Everything else is centralized.

Outlook & Guidance

08/10/2021 How will the accounting landscape change over the next 10 years?

Two major forces will shape it. First, demographics, baby boomers are retiring, the working-age population is shrinking, and immigration is uncertain. Second, governments in Western economies are spending at record levels, with little political will to cut back. Combined, these forces point to higher taxes.

Few Australians pay most of the tax burden, and our clients, private business owners employing 70% of Australians, carry a disproportionate share. They will need more high-quality tax and financial advice for decades ahead. That creates a strong, long-term tailwind for Kelly Partners.

14/02/2022 How do you know 10% growth is the right target and not more or less?

It is built from the ground up. Every one of our 54 partners must grow organically at 5%. Younger partners may grow 20% a year, while older partners with larger books may grow 5%, but the base expectation is 5%. On top of that, I assume 5% growth through acquisitions. Together, that equals 10%, and I ask whether that is sustainable forever. Ten percent compounded may not sound impressive today, but over decades it is extraordinary, and the math proves it. When we listed, I studied what caused failures in public companies. The number one mistake was over-promising. Founders would project 30% growth, raise money at high multiples, then miss expectations and destroy their reputation. I refused to follow that path. We listed at 10.9 times earnings instead of 19, cutting the IPO raise from $15 million to $7.2 million. That decision cost me about $15 million personally, but I preserved reputation and credibility. To me, the way to make money is first not to lose money. By under-promising and over-delivering, I can attract long-term partners and protect shareholders.

This conservative discipline is central to everything we do. If we can reach $8–10 million in net profit after tax, the market may value us at 25–30 times earnings, which could mean a $500 million to $1 billion market cap. That does not require reinventing the model or chasing unrealistic growth. It simply requires executing our strategy consistently. Some worry about growing too slowly, but I would rather that than over-promise. Many have tried to copy what we do, but execution is deep in our DNA, built with 50 partners over years. We are innovative within our circle of competence, combining discipline with creativity. Our five-year plan is intentionally conservative “popcorn for moviegoers” , something to satisfy the market while ensuring we only commit to what we can deliver. We are also exploring technology to strengthen client relationships at low cost, but without distracting from our core. The real moat is our deep relationships and unique combination of activities, not flashy spending. Over time, this disciplined, conservative compounding will build something very significant.

14/02/2022 Why provide a growth plan at all instead of letting the market figure it out?

About 18 months ago, investors were frustrated by our refusal to give guidance. I realized that sometimes you have to offer “popcorn for moviegoers.” When you take kids to the movies, they pester you for popcorn until you give in, even though the movie itself is the main event. Likewise, the market wanted a plan, so we gave them a simple five-year framework. It is extremely conservative and simply reflects what we are already doing. Suddenly investors were delighted, even though nothing had changed.

This approach balances market expectations without compromising discipline. It reassures those who cannot extrapolate from 15 years of published results. At the same time, it keeps us anchored in under-promising and over-delivering. Behind the scenes, we are innovating and thinking deeply about ways to create more value for clients , for example, building a marketplace where they can swap services and benefit from our community. But critically, these innovations do not require significant capital. Strategy is not about inventing something no one can copy; it is about combining activities uniquely to own a lasting position in the client’s mind. That is our edge, and it will endure.

25/05/2022 What’s your prediction for the next 12 months, and how can accountants take advantage?

This is the most exciting time of my career. Many firms without the right people, processes, technology, clients, or financial model have really struggled, particularly in retaining and attracting talent. It’s been a sorting-out period, and I’ve loved it because talented people have been stuck in firms unworthy of them. We’ve had eight firms join us in the past nine months, with more coming.

Our model centralizes everything except client service and team care, removing the dross, finance, marketing, IT, recruitment, office fit-outs. We’ve refitted 10 or 11 offices and built new ones, investing $7–10 million. If you want people in the office, it has to be a place they want to be. I’m energized because firms come to me, and I just lay out the evidence, over 100 client updates, investments in our people, our IT, our offices. I ask: if you were your client or your employee, would you rather have been with you or with us? The answer is obvious.

25/05/2022 What is your next 10-year plan?

The first 10-year plan was to grow from scratch and list, which we did in year 11. Now we are in “accelerate to $80 million revenue,” with a longer-term goal of $125 million to enter Australia’s top 10 firms by size. That proves our model at scale.

Once we cross $80 million, we will publish a new five-year plan focused on measuring impact and leveraging it further. Being public has connected us to global shareholders, and I now get approaches from Europe and the U.S. about bringing our model overseas. For now, we execute what’s in front of us, but the long-term vision is to build a 100-year institution and expand wherever our values can make a difference.

01/08/2022 Can KPG be a 100-bagger?

We have shared the 100 Baggers book because its principles are excellent. My focus is on building a 100-year high-quality business that makes a difference to our people, clients, and communities. If we achieve that, the business will perform well, and shareholders will benefit. Whether we are a 5, 10, 20, 50, or 100-bagger, success will follow from the quality of what we build.

16/11/2022 What is the future for Kelly Partners Group now that Upstreet is established?

We are working on a program of larger share awards with a vesting schedule, such as over eight years with one-eighth vesting each year. That is the next generation of applying this technology, making ownership even more obvious and reinforcing that we are all in it together. During the pandemic, people could tell when leaders claimed solidarity but clearly were not. With this type of share scheme, our people can see in real time that they truly are part of it. At the end of the day, on your deathbed, you will not regret doing the right thing by people. I have strong conviction that if I do good things for others, they will in turn do things for us we did not even imagine possible. Our business has been built by that discretionary effort from our people.

01/02/2023 With international expansion planned, who leads locally if you focus globally?

Stephen, we now have over 75 partners who are owners and drivers. Our services team supports them with expertise in IT, finance, risk, legal, and more. Leadership is about fellowship, not titles, and our partners have proven they can lead effectively. I’ve often been outside Australia for 16 weeks a year, or even away for months, and the firm performed exceptionally well. With 75 leaders owning 49% of their businesses and a capable services team, I’m confident in our ability to execute globally.

Time zones are manageable. CEOs can get dragged into details best handled by others, and my way has always been to move around. Our partners’ behaviors and values continue to drive client satisfaction, which shows up live in our Net Promoter Score surveys. I’m proud of this culture and see no reason it won’t continue as we expand.

01/02/2023 Are you concerned that international expansion may be happening too quickly versus focusing more on Australia?

Sebastian, I understand the concern. We’re on track to be a top 10 firm in Australia within two years, maybe sooner, and we don’t rely heavily on audit revenue like some competitors. We believe we can walk and chew gum at the same time, though of course we must prove it.

This isn’t just about opening offices; it’s about unlocking the full potential of our senior leaders, many of whom have been with me for over a decade. International expansion gives them opportunity to grow. From inception, we’ve given employees Jim Collins’ Good to Great, and our “big hairy audacious goal” is to be the best place for our people to realize their potential. With a 31% EBITDA margin versus about 8% in the U.S., we see clear opportunities in the U.S. and UK.

01/02/2023 Will you decentralize M&A decision-making with global expansion?

Yes, Trevor. At last year’s Berkshire Hathaway meeting, a Constellation Software executive advised me to invest in training our top 10–15 leaders to grow the business. We’re forming a senior leadership council to build this capability. I trust these people to scout deals while our central team ensures alignment and documentation. This will allow us to materially scale our acquisition cadence across Australia, the U.S., and the UK.

11/08/2023 Would privatization or delisting change your long-term vision?

We do not want anyone excluded from participating in the next 30 years of compounding. My vision has always been to build this business publicly, because there are strong reasons to remain listed: visibility, credibility, and being a permanent-capital Buffett-style acquirer as an alternative to private equity. My preference is to stay public under the right conditions, but no decision has been made. We will keep everyone fully briefed as matters progress.

11/08/2023 Will you remain an Australian tax resident?

That question is under ongoing discussion, and I do not yet have final advice. The answer will depend on the strategic direction we choose to maximize group value.

31/01/2024 What defines success under the Jefferies remuneration structure?

Success means a transaction must occur. Jefferies has been a tremendous partner, treating us with respect when many banks ignore smaller businesses. If we raise debt or equity for significant growth, we will work with them and remunerate appropriately. I want to publicly acknowledge their efforts, particularly Paul Griffiths. I look forward to a multi-decade partnership with Jefferies.

31/01/2024 What is your view on leverage in today’s high interest rate environment?

High interest rates must be viewed in context. My first deal at Kelly Partners was at 11.1% interest, 100% geared, with lower margins than we have today. Our business is far less fragile now. We manage debt conservatively, aligning it with responsible partners, paying it down aggressively, and not taking profits until debt is extinguished. Ceasing dividends will further strengthen this approach.

As CEO, I see myself first as Chief Risk Officer. We will never do a deal that risks losing money or threatens the group. Most acquisitions will remain small, and any larger deal will be structured to reduce risk to zero. Our valuation discipline keeps us inside a small circle of competence where we believe risk is minimal.

31/01/2024 Can you elaborate on Project Fortress balance sheet?

I cannot share every avenue, but note we have sold two businesses in the past six months because they did not meet return metrics or align with our standards. We reinvested that capital into the group. We have ceased dividends, will continually strengthen our financial position, avoid unnecessary risks, and stay within our circle of competence. The ultimate way to build an anti-fragile fortress business is to only do what we understand and continually improve. If you see us drifting outside that, be concerned.

31/01/2024 Is the business adequately capitalized to capture future opportunities?

We are adequately capitalized to continue our current strategy, but not in the most advantageous way to seize the larger opportunities ahead. We are exploring ways to improve the capital structure over the next decade. Strong, long-term shareholders, particularly a dominant one, help maintain values and strategy, which magnifies returns. However, that also limits some capital-raising options. Our ongoing strategic review investment is aimed at ensuring we deliver full value to shareholders over time.

31/01/2024 Do you have a timeline for a U.S. listing, and will you match U.S. borrowings with U.S. earnings?

We have applied for an OTCX listing, which has been approved and should begin trading imminently, subject to insurances. This will make it easier for partners and team members to access stock. As for a full U.S. listing, our current market cap does not justify the investment required, but we expect that to change as intrinsic value becomes more evident. When valuations align with our business fundamentals, we will proceed. We are also in discussions with the ASX on structural matters, as Australia currently restricts dual-class share structures available in markets like the U.S., U.K., Hong Kong, and China.

Yes, we intend to match U.S. borrowings with U.S. earnings. Ideally, we would use a U.S. HoldCo with U.S. banks lending to U.S. businesses. So far, U.S. banks have wanted to bank the whole group, but we have a nearly 20-year partnership with Westpac, which has always supported us. We prefer that relationship, so for now, acquisitions have been funded with cash. Over time, we will seek the right partner for U.S.-dollar borrowings against U.S.-dollar earnings.

21/08/2024 Are you waiting to reach a certain size before pursuing a U.S. listing?

Our approach is similar to Starbucks, which listed at a $250,000,000 market cap despite being told they were too small. We will not raise equity at a price below intrinsic value, so closing the valuation gap is critical. Once that is achieved, we are committed to a U.S. listing at the right time. We aspire to grow into a global firm like A.J. Gallagher rather than sell out like PSC in Australia. The insurance brokerage industry provides a direct analogue for our strategy.

29/09/2024 What are your long-term goals for the business?

I grew up in Australia, and while Australians are global leaders in many fields, we do not have a global accounting firm. That holds back Australian businesses, which need legal, banking, and accounting support to compete globally. There is a clear opportunity to build Australia’s global accounting firm for driven private business owners, who are staying private longer and expanding internationally. Rather than talk about it, I prefer to show it. In the US, we achieved in 18 months what took 11 years in Australia. We are the only Australian firm to own an accounting firm in the US, and we expect to be in the UK soon. Through Cudos International, we now have a presence in 48 countries.

My vision is to build the skeleton of a global firm over the next 25 years, then add the muscle to create global infrastructure that supports Australian businesses worldwide. I believe in capitalism as the best system for allocating resources. Our more than 100 partners have chosen to join us in this mission under stringent standards, which makes their commitment even more meaningful. Time is limited, and I am proud to spend mine with the people in our group and our shareholders, who energize me daily. It is always a great time to be an accountant, and it is a privilege to lead this business.

09/11/2024 What progress have you made since listing on the Australian Stock Exchange?

In the first five years after listing, we completed 31 deals. We said we wanted to build the next generation accounting firm by being transparent, sharing progress publicly, and attracting like-minded partners. That approach has worked, and in the most recent five years, we completed 3.5 times more deals than in the prior period, demonstrating the strategy has resonated.

09/11/2024 How does your five-year plan guide future performance?

In 2020 we published a five-year revenue, EBITDA, and NPAT plan, and we remain on track to meet those targets. We will not publish a new five-year plan, as rigid targets can distort decision-making. Instead, we provide a framework that investors can update with their own projections. This business is predictable because taxation is not going away, and private businesses remain a favored tax base.

09/11/2024 What are your strategic objectives in Australia and internationally?

In Australia, we aim to become a top-10 accounting firm across accounting, tax, compliance, audit, finance, insurance, and wealth services. We differentiate from the Big Four, which focus heavily on consulting, and from second-tier firms that emulate them. Internationally, we see opportunities in Los Angeles and London, with a small London office already established. Our ambition is to become Australia’s global accounting firm, pursuing a long-term mission rather than quick wins.

09/11/2024 Why has the pace of acquisitions slowed recently?

I would not describe it as a halt. Our focus has been integrating recent acquisitions and ensuring businesses reach expected margins while continuing discussions with many firms. The timing of deals depends on the circumstances of each business and owner. Some transactions take years, while others can close within a day. Over a five-year horizon, our acquisition cadence remains consistent, and we prioritize integrating new partners properly so they feel welcomed and committed for the long term. We are not in the business of buying for the sake of volume, but of building enduring partnerships.

11/12/2024 What is the most important long-term challenge?

The long-term challenge is keeping the founder’s mentality. I recommend everyone read The Founder’s Mentality, one of the best business books, or watch the 18-minute summary video on YouTube. We maintain this mentality through our 51/49 structure. Some say valuing KPG is hard, but if you cannot value our business, you cannot value any business. This is as defensive a business as you will find. We traded through the global financial crisis and the pandemic. The model is outlined in Robert Hagstrom’s The Warren Buffett Way. Valuation really comes down to three decisions: our 10-year stage one growth rate, terminal growth rate, and discount rate. We use a weighted average cost of capital around 8.8%. Personally, I use the US 30-year Treasury bond rate, as our deals are within my circle of competence and effectively risk-free. I only do deals where I see zero risk.

23/12/2024 What should US accounting firms prioritize now, and what should they stop doing?

The foundation of your business is the foundation of your life: mission, values, and vision. You can’t outperform yourself for long. Leadership starts with keeping promises, promises made, promises kept. Too many firms fail here: telling staff they’ll make partner “next year” again and again, or quoting clients one fee then billing more. That erodes trust.

Firms should stop spending time with the wrong clients and wrong people. Many firms carry 20 percent of clients who never should have been there. Those toxic relationships lower self-esteem, distort pricing, and waste energy. Get out of abusive, one-sided relationships. Spend your limited years, your 1,800 workable hours annually, with people who share your values, value you, and want to make a difference. The quality of your associates defines your life and your busines

04/02/2025 Has anything changed in your long-term view of KPG over the past year?

The biggest change has been exposure to new ideas at scale. I was privileged to attend Constellation Software’s M&A conference in Toronto, where Mark Leonard interviewed me in front of 300 of his people. Constellation has 56,000 employees globally, with 600 focused on M&A. The quality of their people and the sessions was extraordinary, and the experience was mind-shifting.

Meeting Mark, his board, and that group reinforced lessons from books like What It Takes by Stephen Schwarzman, Think Big by 3G Capital, and The Magic of Thinking Big. I am challenging myself and our team to imagine the 25-year future of KPG and give ourselves permission to think at scale. The US market is enormous, and making an impact will take decades. That does not mean we will not deliver returns in the meantime, but it frames the opportunity as far larger than we had previously envisioned.

04/02/2025 Can you discuss your recent contact with Mark Leonard and Constellation Software?

I cannot share much as it was confidential, but I can say it was extraordinary to meet Mark and his team. He reviewed our business, understood it, and interviewed me in front of 300 of his people for 75 minutes. It went very well.

Meeting them reinforced the importance of believing in our model and scaling it. Constellation is a massive inspiration. If we achieve even a tenth of their effectiveness, we could be 15 times larger and a 50-bagger for shareholders. That illustrates just how powerful their business is and how ambitious we should be.

04/02/2025 What do you see as KPG’s greatest challenge?

The greatest challenge is focus. To perform at a very high level requires sustained focus and commitment, which comes with a human cost. We must balance that effort in a sustainable way so the business can continue compounding for the next twenty-five years.

This applies to every person in the business. We must look after our people and the company intelligently for the very long term.

04/02/2025 How do you avoid distraction and deal with parties interested only in money?

California itself has not been a distraction, it is simply hard work. What we must be vigilant about is the increasing number of people drawn to us for money, not mission. One of our shareholders who built Rackspace gave us the book The Rack We Built, which stresses hiring missionaries, not mercenaries.

We have occasionally made mistakes by bringing in people focused only on money. We are now very deliberate about protecting the business from that and ensuring alignment with values.

12/08/2025 What could prevent KPG from becoming a $2 billion company?

The biggest risk would be making a large, undisciplined, transformative move that is not intelligent or not supported by data. McKinsey’s research and market history show the dangers of such decisions. Another risk is stepping outside our circle of competence and pursuing things we do not understand. That would be our greatest vulnerability.

12/08/2025 What is the status of a potential US or Canadian listing?

I cannot say much, but we have completed PCAOB audits and invested significant time and money. That should tell you something about our direction.

12/08/2025 Do you see yourself growing KPG indefinitely, or do you plan to retire?

If you are not going to operate at a world-class level, then you should retire. Inspired by Warren Buffett and others, my focus is to lead KPG with that same long-term mindset. Buffett’s six decades of service show the importance of doing things for the right reasons and ensuring the business endures.

The most effective CEOs manage themselves to sustain their companies for the long haul. I work hard to look after my physical and mental health so that we run the business sustainably. The true value comes from duration.

12/08/2025 What are your long-term goals for KPG?

When we started, the goal was $50 million in revenue. Once we built the systems for that, we aimed at $100 million, then $150 million. Today, our goals are clear, and they are published in our owner’s manual.

We are building the foundation for Australia’s global accounting firm for private business owners who want to grow. There is a clear and differentiated market opportunity, and we believe we have the model, team, and shareholders to achieve it. We are having a lot of fun and making a real difference, which is the best part.

12/08/2025 How would you characterize the business approach of KPG, intuitive and adaptive or fixed and mechanical?

Our mission, values and vision are fixed, as is our strategy to focus on accounting firms between $2 million and $10 million that serve private business owners. Our 51-49 structure is also fixed. However, where we go, who we partner with, and when we act is driven by intuition and adaptability. We invest heavily in mindset, drawing on lessons from Steve Schwarzman’s “Think Big” and 3G Capital’s “Think Bigger,” as well as Jim Collins’ “Good to Great.” We aim to maintain the core while stimulating progress.

I would hate for our approach to be purely mechanical, losing intuition or adaptability. We keep the courage and energy to experiment, guided by our feel for the market, our people, and our clients.

12/08/2025 What could prevent KPG from becoming a $2 billion-plus company?

The biggest risks are making a large, undisciplined move or going outside our circle of confidence into areas we do not understand. Our progress has come from disciplined, data-driven growth. If we lost that discipline or pursued something beyond our competence, that could hold us back.

12/08/2025 What are your thoughts on AI in accounting, and how do you retain high-quality talent?

We see AI as a major opportunity, more powerful than past technologies. We recently appointed a senior executive to lead our AI strategy. We have mapped AI use cases across every position in the firm and are now deploying and training team members in core applications. We will be very aggressive in adoption.

I liken it to a person with ten arms instead of two. AI enhances our capabilities dramatically, and that in turn helps us retain top talent by empowering them rather than replacing them.

12/08/2025 What is the status of a potential U.S. or Canadian listing?

I cannot say much, but we have completed PCAOB audits and invested heavily in that process. That fact probably gives you some indication.

12/08/2025 What are your long-term goals for KPG?

When we started, the goal was $50 million in revenue, and we built systems to handle that. Once it was within reach, I told the team to run as if we were a $100 million business, then $150 million. Our goals today are clear if you read our owners’ manual.

We are laying foundations to build Australia’s global accounting firm for private business owners with ambition. There is a clear, differentiated opportunity, and we believe we have the model, systems, and team to deliver. It is a privilege to serve our shareholders, partners, and people. We are having fun, making a difference, and just getting started.

Risks & Macro

08/10/2021 How healthy are your clients’ businesses after recent economic turmoil?

Ninety-five percent of our revenues come from Sydney, one of the strongest economies globally. Australian business owners personally secure loans with their homes, so they are deeply committed to making their businesses succeed. They don’t walk away when things get tough.

As a result, our client base is extremely resilient. The government has also provided unprecedented support over the past 18 months. High-quality owner-operators in our base are performing well, and we don’t see signs of stress among them.

09/06/2020 Do you think the coming recession will be the worst since the Great Depression?

I listed the company in 2017 partly because I believed a recession was coming. We were at the top of the cycle, and I suspected an issue would emerge from China. The debt in local governments there seemed unsustainable, and I have long doubted whether authoritarian control can be blended with a true market economy. Still, I didn’t expect Trump’s economic policies to work as well as they did, lowering tax rates inoculated the US against China in the trade war and extended the cycle.

That said, we must resist the temptation to exaggerate every crisis as “the greatest ever.” I hope this downturn is not as severe as 1991–92, when banks and corporates reacted harshly and wiped out thousands of businesses. Since then, governments and banks have learned from the GFC how to respond more constructively. I also believe current leadership is better equipped, and unlike the early 90s, we may not “need” a recession in the same way. My hope is that policy action, coordination, and experience will soften the impact for businesses and families.

09/06/2020 How do you view Australia’s economic outlook given current challenges?

If we work together, with strong leadership and real infrastructure investment, I believe Australia is well placed. We have three trillion dollars in superannuation, one of the most educated and motivated workforces in the world, and an incredible record of innovation. On top of that, we have the resources sector, coal and iron ore, that underpins our prosperity. People may dismiss it, but if we turned it off tomorrow the economy would collapse five times worse than any depression. That reality means we are far from “down and out.”

I am short-term pessimistic but long-term optimistic. Bernard Arnault of LVMH has a saying: be pessimistic in the short term and optimistic in the long term. That’s my stance. In the short term, reduce risk and strengthen your position. In the long term, believe in the resilience of people, innovation, and leadership. I don’t think this will be a depression, but everyone should prepare as if it might be, while working to ensure it is only a recession. Mood is crucial, and I believe once a vaccine or solution emerges, optimism will return quickly.

08/10/2021 How has your global shareholder base contributed during COVID?

Our international shareholders have been very helpful. We’ve spoken with investors in Spain, London, Amsterdam, Finland, Georgia, the U.S., and elsewhere. They’ve shared perspectives on how COVID was unfolding in their countries, which helped us anticipate what Sydney and Melbourne might face. It’s been invaluable insight while we were locked down in Australia.

08/10/2021 Do you have views on DeFi and blockchain technology?

No, I don’t at this stage.

25/05/2022 How did you approach decisions and actions during the COVID response?

We started the firm in 2006, but my grounding goes back to 1993 at Pricewaterhouse during the 90s recession, then the tech crash in 2000, the GFC in 2008, and now the pandemic. From day one we ran the business with a strict focus on cash flow discipline. My first client actually paid upfront and told me only the paranoid survive. That mindset, avoiding waste, preserving capital, and staying prepared, has been with us ever since.

So when COVID hit, we were ready. We had already listed in 2017, and I had told investors we were recession-proof. The pandemic became an opportunity to prove that. Because we had invested heavily in cloud technology, our people could work from anywhere seamlessly. We focused first on health and well-being, sending care packages, providing online training, running virtual events like “Wisdom Wednesdays” with guest speakers, even virtual city tours. It wasn’t just words but action that showed care for our team, and that flowed through to our clients. We formed a COVID response squad, produced more than 60 real-time updates, and shared them across the network. Clients appreciated it, leading to over 500 Google reviews, an NPS above 65 compared to the global average of -18, and recognition as a great place to work. Despite the challenge, the firm grew more than 30% that year. I always remind the team: you can’t choose what happens, but you can choose your attitude, and that attitude is contagious.

25/05/2022 What do you mean by a shift toward outcome-driven behavior?

The pandemic accelerated acceptance of change. The biggest ongoing discrimination in the economy is ageism, some want things as they were yesterday. But our philosophy is to keep creating tomorrow. Across all ages, people embraced new technology and training at unprecedented speed. We achieved decades of technical progress in a short period, and everyone got on board with better ways to serve clients.

It also increased understanding of personal circumstances. Some have children, some care for parents, others face health challenges. Recognizing that humanity has built more tolerance and acceptance in the firm. We don’t employ tasks; we employ people, and unless you are excellent at leading people, you can’t win. For us this wasn’t a cultural grind, it was a chance to take our people-first approach further. Necessity became the mother of invention, and the culture strengthened around outcomes rather than rigid behaviors.

25/05/2022 Did you unify all offices for meetings and initiatives like Wisdom Wednesdays?

Yes. Each office controls its own P&L, but centrally we coordinated the entire COVID response. Health initiatives, client correspondence, and technical updates were handled by a cross-office partner group supported by marketing. When government announcements came out, our response went to clients within an hour. Partners collaborated across offices, sharing real-time updates via WhatsApp while on government helplines, saving time and spreading knowledge across the network.

I was incredibly proud of how the team leveraged teamwork. One of our core values is “play as a team,” and during this period we lived it. Because of the network structure, we could organize Wisdom Wednesdays, virtual travel experiences, and guest speakers for the entire firm. It showed that being a team is not just something you say but something you do in practice, and that strength was magnified across all our offices.

25/05/2022 Is everyone back in the office now?

I’ve said to everyone it would be good to have Mondays together, as it helps set structure for the week. We’ve generally gone for Monday, Tuesday, and Friday, but I’ve told directors to treat people as individuals. Last year we billed $50 million in revenue, and this year it will be $60–65 million. But rather than size, what excites me is helping each individual become the best they can be. Every partner must meet with each of their team members one-on-one on the first day of the month. If they don’t, that team member moves under a leader who will. Most of our people want to use the offices when it suits them, and we’re fine with that. We’ve proved the team can deliver from anywhere.

25/05/2022 Are you sticking to flexibility or requiring Monday attendance?

I’m not flexible at all about our values, how we serve clients, how seriously we take our work, and how we look after each other. But beyond that, I’m completely flexible. Some juniors must be in the office for training; that’s non-negotiable. But for most people, why tell adults how to deliver outcomes? We lead from values: put others first, do what you say, and play as part of a team. Adults trusted with responsibility usually over-deliver. So I’m inflexible about what matters, and flexible about everything else.

25/05/2022 Was there anything you wish you had done differently during COVID?

Not really. I always think you can do more, and one thing I wanted was to give everyone a great pair of headphones. I tried to order 300 pairs after a supplier sent me one, but supply chain issues meant he couldn’t deliver. Beyond that, our team over-delivered and performed extraordinarily during that period.

01/08/2022 Does KPG serve mining or fossil fuel exploration companies?

No, not to my knowledge. We do not have significant exposure to those industries and have not sought it out. It is not our history or area of expertise.

01/02/2023 What is your view on AI and machine learning, and major disruptions ahead?

Chinmay, I remember when IBM computers were first introduced and people thought all accounting work would vanish. I believe AI and machine learning will make an important contribution, particularly by removing repetitive work. Chartered accountants are highly trained, and freeing them from low-level tasks is positive.

For private business owners with complex, multi-jurisdictional needs, human advice and insight will always matter. Firms that don’t reinvest or innovate will be disrupted, while we remain focused on reinvesting 9% into future growth. I look forward to using technology to enhance, not replace, the advice we provide.

01/02/2023 Can you comment on funding availability and terms for U.S. and UK acquisitions?

Anoop, without giving away too much, we’ve secured strong banking relationships in the U.S. that provide terms as good as or better than in Australia. We believe we can achieve the same in the UK and are in discussions now. There is significant interest in funding our growth, and we’re confident in our ability to secure the capital we need.

01/02/2023 How do you think about risk in transactions?

We see our transactions as close to risk-free, though not literally risk-free. From day one, I’ve valued the group against the U.S. Treasury Bond with an assumed growth rate. My mindset has always been that the CEO is also the Chief Risk Officer. Rule one is don’t lose money, rule two is don’t lose money, rule three is don’t lose money. We rigorously structure deals to reduce the risk of capital loss to as close to zero as possible. There are always risks, but we control what we can, and anyone who knows me knows how aggressive I am about risk management.

11/08/2023 What are the key risks and disruptions over the next 30 years?

Having worked in this industry for 30 years, I have seen radical change and expect more ahead. The core thesis is governments will tax more, not less, and complex private business owners will need world-class advice. We are confident no technology, including AI, can fully resolve these complexities, so demand for our services will remain strong.

Globally, governments are increasing surveillance and regulatory enforcement, which creates a greater need for accountants and lawyers. Soft-left authoritarianism, rising regulation, and transformative technologies all point to higher demand for trusted advisors. We adopt every useful tool, but our paranoia about client outcomes ensures we remain relevant. Only the paranoid survive, and we are proudly paranoid.

11/08/2023 What is the impact of rising rates on your acquisition model?

There is no impact. The first deal I ever did was financed at 11.1%, and current rates have not reached that level. Even if they did, as long as we generate 30–35% returns and finance below 11%, we are pleased. Acquisitions remain viable, historical gearing is still usable, and no, it is not harder to do deals in the current environment.

19/11/2024 Are there any risks that keep you up at night?

Personally, I did experience disrupted sleep after moving to the U.S., but that was due to my schedule, not business risks. After adjusting my routine, my sleep and health are better.

In terms of business risk, Jim Collins’ work resonates with me, particularly his warning in How the Mighty Fall about hubris. The danger is thinking that skill in one area means competence in another. We are hedgehogs, we add value to $2,000,000 to $10,000,000 accounting firms serving private business owners using our 51/49 model. As long as we stick to what we know, we will be fine. Beyond that, I sleep well.

04/02/2025 Were any US offices impacted by California wildfires?

No, our offices were not impacted, but one of our team members’ homes was lost. The past four weeks have been horrendous, the worst I have experienced personally. Many people have been affected. Financially, the business is not impacted, but the human toll has been very difficult.

Last year in Florida, a hurricane destroyed the homes of five of our people. We have been careful and gentle in managing that office, supporting our people while continuing to build partnerships there.

04/02/2025 Are you facing new cybersecurity requirements?

No new requirements, but we have always invested heavily in security. The main challenge is the high cost of insurance, which remains frustrating.

12/08/2025 How is KPG approaching international funding structures and risk?

We are working on a bond that could sit above the parent company or have its own financing entity. Ultimately, we aspire to a listed holding company, likely Cayman-based, with an Australian holdco for Australian interests and global holdcos for US, UK, and other markets. Each market’s funding would flow through its respective holdco into the subsidiaries.

It is complex and has slowed us down, but we prefer to do it slowly and well rather than fast and in need of repair. We remain very conscious of risk, as always.

Personal Questions

09/06/2020 Can you briefly describe your journey from founding in 2006 to listing on the ASX in 2017?

Yes Alex, from the outside it looks straightforward, but in reality it was a long, demanding process. I often compare it to cricket: people watching behind the nets think they understand, but when the test bowlers are firing at you, it is a different reality. I began my career in 1993 at Price Waterhouse as an undergraduate, then moved into investment banking, where I eventually lost my job. They told me I didn’t fit in, but that experience confirmed I wanted to build a business rather than advise from the sidelines. Around that time I was reading everything Warren Buffett had written, and his focus on businesses that would endure in 20 years made sense to me. Death and taxes seemed the only certainties, and since I worked in tax, I saw an opportunity. Many accounting firms were poorly run, more like individuals with desks than real businesses. By 2005, when our first child was born, the partners at my firm broke promises they had made, and I was frustrated by the dishonesty I saw in the industry. I decided to start my own firm, and my two best mates said they didn’t know why I hadn’t already. So on 12 June 2006 we started Kelly+Partners.

Before founding, I had immersed myself in self-education. After losing my banking job, I read Think and Grow Rich, which encouraged me to seek out successful people and ask how they achieved their goals. At 22, unemployed, I wrote to leaders requesting an hour of their time, promising to publish their insights for young people. Over three months, I made 5,000 phone calls and secured 34 interviews. Publishers rejected me, so I self-published, got media support, and the book became a number one bestseller. That experience taught me how to develop, market, and sell a product. Over time I wrote a series of books every seven years, interviewing leading figures like Warren Buffett, Mandela, Gandhi, and Australia’s top business leaders and investors. These projects gave me credibility, a network, and speaking opportunities, over 2,000 engagements and 40,000 books sold. By 2006, I had read more than 3,000 books and had a clear vision for building a business. Starting out, though, it was tough: our baby was nine months old, I had a $300,000 wages bill, $200,000 worth of clients, and we had to sell our apartment and move several times to make it work. What looks today like a straight growth line was in fact years of pressure, house moves, raising kids, and a relentless push to build something enduring.

09/06/2020 What role did your wife play in supporting the business during the early years?

I came into the business with the full support of my wife, who I consider a co-founder. She was an accountant as well, prepared to sit with a baby under the boardroom table filling tax returns while I worked the hours needed to build the business. At the time I was waking at 3:30 a.m., working through to 6:30 p.m., spending an hour at home, then back at it until 11 p.m., while our baby woke every three hours. Beck wasn’t getting much sleep, and I didn’t think I should either. It wasn’t easy, but her sacrifice and commitment made the business possible.

The other key was financial discipline. I sold my apartment in Kirribilli, drove a $6,000 Magna, and we lived on $100 a week. We stayed in modest homes for nearly a decade while reinvesting everything. Most people focus on lifestyle and status, but I focused on capital. To me, career capital meant skills, books, contacts, and experiences. By the time we started, I had over 10,000 contacts, 3,000 books read, years at PwC and other firms, and two bestselling books behind me. With support at home, strict capital management, and continual personal growth, I was able to form the foundation of our business.

09/06/2020 What advice would you give someone who wants to become more focused?

I’d start by taking them through the planning process I use myself. I keep a 30-year written plan, originally inspired by Michael Hill’s approach. Each year I break that down into an annual one-page plan, then into quarters, then into months, and finally into daily tasks. My Excel workbook runs to about 30 pages and covers everything from fitness and spiritual life to learning goals, family milestones, financial position, and superannuation. I believe learning drives earning, so I make sure reading and growth are constant priorities.

For me, it comes down to intentionality and discipline. I use a diary where I write down my tasks every night so they sink into my mind, and I wake up already focused. It isn’t original, but I’ve never met anyone who achieved something significant without this level of organization. It’s like sport, you don’t land in the Olympics by accident. You have to decide: are you playing park cricket, or test cricket? Only you can hold yourself to the highest standard, and as a leader, you also need to help your people reach their best selves.

09/06/2020 What do you tell people who ask how to become more focused?

I take them through the same planning process I use. I keep a 30-year written plan, broken into annual, quarterly, monthly, and daily goals. My main workbook runs about 30 pages and covers everything from fitness, spiritual life, learning, and family to finances and superannuation. Each year I distill that into a one-page plan. Every night I write down the next day’s tasks so they sink into my mind, and by morning I’m already focused.

I believe a private business reflects the mindset of its founder. Growing businesses are led by growing people. Leaders must access their best selves, just as Buffett, Jobs, or Mandela did at different stages of their lives. Focus is about intentionality, discipline, and standards: are you playing at park level, or test cricket? That mindset, coupled with consistent planning, helps you bring your best self to work every day and inspire others to do the same.

09/06/2020 How many hours are you working since coronavirus began, and how do you manage energy?

I work at least 12 hours a day, five days a week, and at the moment I’m averaging closer to 14. I don’t work Sundays, but otherwise I regard myself as working all the time. I enjoy it, I don’t feel stressed, and I see my business as a vehicle to help people, which makes the work energizing rather than draining.

I don’t draw a hard line between work and life. I’ll take a client call while watching my son’s sport, then return to the game. There are many small gaps in the day that can be used productively. I love what I do, reading, learning, helping clients, so I never feel I need to escape from work to “get a life.” For me, family, partners, staff, and clients are all part of a full, integrated life. That’s why I can sustain the hours with energy and gratitude.

09/06/2020 What is the best way for people to contact you?

People can reach me through brettkelly.com.au, see my books at brettkellybookshop.com.au, or connect via Google or LinkedIn. Send me a message anytime, if I can help, I’m always happy to.

20/07/2020 How do you stay motivated?

When I left school, I joined Price Waterhouse as an undergrad, then moved to an investment bank before losing that job. I didn’t know what I wanted to do until my dad gave me a book about learning from successful people. I wrote to 80 prominent Australians, telling them I was 22, unemployed, and eager to learn. I asked each to give me an hour and answer 11 questions so I could figure out my direction and share insights with other young people. To secure those interviews, I made 5,500 phone calls in three months and ultimately met with leaders like Bob Hawke, Jeff Kennett, Gerry Harvey, and HG Nelson.
What I learned is that the key is finding work that aligns with your values and spending your energy on making other people better off. If your daily efforts are meaningful, you bounce out of bed each morning. Many people never find a great passion or purpose, which limits their contribution. But if you have a compelling reason and align it with your work, you generate more energy, achieve more, and sustain that drive over time.

20/07/2020 What made you choose accounting?

My father had a business that was nearly destroyed by an internal accountant who embezzled money. I was in year ten, and I was shocked that the auditors and directors didn’t see the fraud. I realized that if I wanted to be in business, I needed to understand numbers. So I studied accounting.

When I entered the profession, I saw how deeply my father had been impacted by not having that understanding, and I decided I could both protect myself and help others avoid that same fate. Too many accountants focus on profit or status, not clients. I wanted to create a firm built on genuinely caring for clients, building systems for private clients, and attracting the best people. I like people, which is unusual in technical professions, so my motivation was to combine technical excellence with a people-first approach.

20/07/202020/07/2020 How do you stay motivated?

When I left school, I joined Price Waterhouse as an undergrad, then moved to an investment bank before losing that job. I didn’t know what I wanted to do until my dad gave me a book about learning from successful people. I wrote to 80 prominent Australians, telling them I was 22, unemployed, and eager to learn. I asked each to give me an hour and answer 11 questions so I could figure out my direction and share insights with other young people. To secure those interviews, I made 5,500 phone calls in three months and ultimately met with leaders like Bob Hawke, Jeff Kennett, Gerry Harvey, and HG Nelson.

What I learned is that the key is finding work that aligns with your values and spending your energy on making other people better off. If your daily efforts are meaningful, you bounce out of bed each morning. Many people never find a great passion or purpose, which limits their contribution. But if you have a compelling reason and align it with your work, you generate more energy, achieve more, and sustain that drive over time.

20/07/2020 What made you choose accounting?

My father had a business that was nearly destroyed by an internal accountant who embezzled money. I was in year ten, and I was shocked that the auditors and directors didn’t see the fraud. I realized that if I wanted to be in business, I needed to understand numbers. So I studied accounting.

When I entered the profession, I saw how deeply my father had been impacted by not having that understanding, and I decided I could both protect myself and help others avoid that same fate. Too many accountants focus on profit or status, not clients. I wanted to create a firm built on genuinely caring for clients, building systems for private clients, and attracting the best people. I like people, which is unusual in technical professions, so my motivation was to combine technical excellence with a people-first approach.

20/07/2020 Where Brett Kelly is based?

I am based in Sydney. We started with offices on the Central Coast and in North Sydney, and today we have 13 offices across greater Sydney, one in Melbourne, and one in Hong Kong. Real estate in Sydney is extremely expensive, so from the start I made sacrifices to free up capital for the business. I sold my apartment, moved into rentals in Lane Cove, Seven Hills, and Oxley Park, including three years living near Mount Druitt, so that money could be reinvested into the firm.

Many of my peers tied themselves to large mortgages on homes they didn’t need, locking up capital and limiting flexibility. Beck, my wife, fully supported us living more modestly, raising our kids, and building the firm together rather than chasing material comforts. That discipline gave us the capital we needed to grow. Too often, people spend money on things they don’t need and become slaves to debt, losing energy and freedom. I’ve been fortunate to learn from many wise people, clients, mentors, and those I interviewed for my books, and their insights reinforced that financial choices rooted in values, not status, create the platform to build something meaningful.

How did you start the firm?

I first gained ownership in a firm on the Central Coast in 2006 with my mate Scott. At the same time, I was in discussions with another firm that had promised me a partnership. When they reneged on the deal, I told my wife I couldn’t work with people who didn’t tell the truth. I even considered leaving the profession. But my wife encouraged me to start a firm that reflected my values because she believed people liked me and I was good at the work.

Colleagues also urged me to do it, pointing out strengths I tended to undervalue in myself. I realized others often see your talents more clearly than you do. That support gave me the confidence to launch the firm in 2006, with a focus on creating an environment where people could do their best work, supported by systems designed for private clients.

20/07/2020 Where Brett Kelly is based?

I am based in Sydney. We started with offices on the Central Coast and in North Sydney, and today we have 13 offices across greater Sydney, one in Melbourne, and one in Hong Kong. Real estate in Sydney is extremely expensive, so from the start I made sacrifices to free up capital for the business. I sold my apartment, moved into rentals in Lane Cove, Seven Hills, and Oxley Park, including three years living near Mount Druitt, so that money could be reinvested into the firm.

Many of my peers tied themselves to large mortgages on homes they didn’t need, locking up capital and limiting flexibility. Beck, my wife, fully supported us living more modestly, raising our kids, and building the firm together rather than chasing material comforts. That discipline gave us the capital we needed to grow. Too often, people spend money on things they don’t need and become slaves to debt, losing energy and freedom. I’ve been fortunate to learn from many wise people, clients, mentors, and those I interviewed for my books, and their insights reinforced that financial choices rooted in values, not status, create the platform to build something meaningful.

20/07/2020 How do you maintain focus?

The greatest resource you have is your mind, so you must protect it from distraction. For me, it starts with clarity about the big rocks: people, clients, and building systems for the business. If those priorities are clear, you can say no to lesser distractions. Warren Buffett and Bill Gates both said the most important driver of success is focus, and I agree.

Distraction is everywhere, but if you build habits that direct your energy into the few things that matter most, you develop momentum. I grew up with seven brothers in a family of eight boys, so learning to tune out noise and concentrate on what matters became second nature. Energy and focus together will move almost any mountain, and most people underestimate how much those two qualities alone can transform their results.

21/09/2021 How did you come up with the idea to start the business back in 2005–2006?

In 2006, after leaving school I worked nearly five years at Pricewaterhouse as an undergraduate chartered accountant. Then I joined an investment bank, lost that job, and was unsure what I wanted to do. My dad gave me two books, one called… [transcript cuts off].

21/09/2021 How did you come up with the idea to start the business back in 2005–2006?

In 2006 I had left school, worked nearly five years at Pricewaterhouse, then joined an investment bank and lost that job. I didn’t know what I wanted to do. My dad gave me two books, Think and Grow Rich and How to Win Friends and Influence People. That second book made me realize that while I had strong technical skills, I lacked leadership and management ability. I wrote to 80 prominent Australians, interviewed 34, including former prime ministers and billionaires, and published those conversations in a book that became a national bestseller.

Afterward I returned to chartered accounting. I had been reading about Warren Buffett and saw accounting firms as Buffett-style businesses, similar to his mid-70s investment in H&R Block. These businesses are consistent, resilient, but often poorly run by technical people rather than business-minded leaders. I had worked in several firms and found them unpleasant for staff and clients. After one firm reneged on a partnership promise, my wife suggested starting my own. Initially I resisted, but colleagues encouraged me, and I designed a firm I would want to work in.

I developed a 50.1/49.9 partnership model, influenced by private equity structures, and studied Walmart, McDonald’s, and Disney for back-office efficiency, branding, and workplace culture. I created the “flight plan” offering for business owners and built the Kelly Partners Business System, a pyramid model with mission, values, strategy, and structure at its foundation. I insisted on systemization, documentation, and discipline, influenced by academic research showing smaller, consistent acquisitions create lasting value.

From the start, we aimed to build a 100-year institution. We gave every new joiner books like Good to Great and Raving Fans to establish a common language and culture. I worked 18-hour days, six days a week for years, supported by my wife and family. At its core, the idea was to build a radically different kind of accounting firm: values-driven, disciplined, and focused on people, not just profits. That seriousness of intent, combined with relentless effort, created the momentum we needed to get the flywheel turning.

08/10/2021 How are you building for succession and long-term stability?

We now have 54 partners, 300 people, and 17 operating businesses across diverse geographies and clients. That diversification reduces concentration risk. We also have a 15-person services team and a documented succession plan naming leaders who could step in if I were unavailable.
Succession is not a risk. The business is built on next-generation talent, which we are actively developing. Growth depends on nurturing those leaders, and we’re very focused on it.

08/10/2021 What books are you currently reading?

I’ve just read How Did You Do It, Truett? by Chick-fil-A founder Truett Cathy, and I’m rereading Michael Hill’s Toughen Up, which I now have in a large-print edition that’s surprisingly helpful. Other books in my stack include Hollywood Rajah: The Life and Times of Louis B. Mayer, 100 to 1 in the Stock Market by Thomas Phelps, Buffett’s Tips by John and Tyler Longo, and The Happiest Man on Earth by Eddie Jaku, a Holocaust survivor.

08/10/2021 Apart from Warren Buffett, which CEOs do you most admire?

I admire Mark Leonard of Constellation Software and have learned a lot from Lawrence Cunningham’s work. The Danaher business model and leadership have been outstanding. Locally, I greatly respect Michael Hill, who is now 82.

08/10/2021 Which business leaders inspire you most?

Michael Hill inspires me because of his 30-year planning discipline. He started his business in his 40s after losing his home in a fire, which is an amazing story. I also admire Charlie Munger, though I prefer his earlier thinking to his more recent work. My number two hero after Buffett is Bernard Arnault of LVMH. He has revived century-old companies by adding central benefits like leasing and marketing while letting them grow their heritage brands. His model of longevity appeals to me far more than the short-cycle world of tech. As Steve Jobs once said to Arnault, “I don’t know who will be using my iPhone in 20 years, but I know everyone will still be drinking your Dom Perignon in 200 years.” That perspective on enduring value fits perfectly with accounting, death and taxes will remain certainties. The demand for high-quality accounting and tax services will only grow over the next 20 years, and we’re well positioned to meet it.

08/10/2021 Which Australian CEOs do you admire?

I particularly admire Brett Blundy and Graham Turner of Flight Centre. Graham built an extraordinary business, and Brett has been a very sharp investor and builder of enterprises.

08/10/2021 Rugby league or AFL, who’s your team?

I grew up in Penrith after selling our apartment in Kirribilli to fund the business, so I’m very fond of the Penrith Rugby League team. My wife’s father is a diehard South Sydney supporter, so that rivalry is alive in the family.

In AFL, my father and half-brothers were passionate Melbourne fans when they moved from England, and I was taken to Sydney Swans games from the mid-1980s. So I have loyalties across both codes.

07/02/2022 What happens if you are suddenly incapacitated?

There is a designated partner who would step in if anything happened to me, whether short or long term. All our partnership agreements include documented succession plans, which have been in place for many years. While I may front the business and bring certain skills, what truly matters is that we are building scalable systems, processes, and methods, inspired by groups like Constellation. This ensures the business is not dependent on any one person.

07/02/2022 From a key person risk standpoint, does the business need to become somewhat “de-Bretted”?

I have done everything possible to ensure the business is not dependent on me. We have more than 20 decentralized businesses run by strong partners who manage their firms day to day using our systems and insights. It is actually embarrassing how decentralized we are, but that is the design. From inception, the business has been built to avoid key person risk, and I think we have proven that.

I may bring communication skills and clarity that others do not, but this is a team effort in every sense. The value is in the people across the group, not in me personally.

07/02/2022 What books are currently on your reading list?

I think 100 Baggers is such a valuable book that I bought copies for our services team so they can all read it. I am also reading Invest Like a Dealmaker by Chris Mayer, which I think is excellent. My general philosophy is always be reading, always be learning.

I would also highlight Odd Bjorn of REQ, who writes great material, including content we published today in our Quality Shareholders letter. I am very impressed with his work and recommend looking him up.

14/02/2022 What do you do in your spare time to relax and refresh your mind? Any tips, exercise, meditation, or hacks you can share?

The key is that I am extremely organized, and I teach this to our clients. Every December I plan the year ahead, booking out all holidays. For the past decade I’ve had 16 weeks of holidays every year, aligned with my children’s school breaks. When I am on holiday, I focus on being present with them, though I may quickly check emails because I genuinely love my work. My kids are 16, 13, and 9, and I value spending time with them. I carry cards with my goals and our capital allocation framework, placing them in my wallet, car, and elsewhere, to stay focused. I also never work on Sundays, unless in an extreme emergency. In accounting, more than 50% of professionals experience mental health episodes, largely because they never stop working. Choosing one day a week not to work, whether Sunday, Saturday, or Friday, is essential to stay fresh and aligned.

I also have a trainer, Matthias, and I work out every Monday, Wednesday, and Friday at lunchtime. If someone schedules over my gym time, I simply do not attend. Exercise is critical to me. I also believe in meditation, though I view it as an updated version of ancient practices like prayer. For centuries, people sought solitude without distractions. Today, you can find the same in an empty church, mosque, or synagogue if you switch off your phone. We should not discard ancient wisdom and try to reinvent it all in one lifetime. Quiet time away from noise is vital. I don’t see my work as hard; I love helping people and gain energy from it. I avoid people and situations that drain me, even among family and friends. I curate my relationships to limit negative input. We live in privileged times with more opportunity than ever in history. Remembering this, while staying realistic about challenges, keeps me upbeat and helps me manage what I let into my life.

25/05/2022 Who are your main sources of wisdom and inspiration?

I’ve been shaped by thousands of books and the idea of a “mastermind,” which I learned from Think and Grow Rich. My first book in 1998, Collective Wisdom, came from interviewing 34 prominent Australians. I saw many achieved their goals but often at the expense of family, friends, or health. That wasn’t the definition of success I wanted. My second book in 2005, Universal Wisdom, explored the lives of seven people who changed the world: Martin Luther King, Nelson Mandela, Mother Teresa, Pope John Paul II, Warren Buffett, and Helen Keller. Their truths transcend culture and time.

For me, it’s clear that non-violent resisters like Gandhi, Mandela, and Martin Luther King had the deeper impact, because they tapped into conscience and universal truths. Their ideas endure beyond their lives. That’s the type of wisdom I want to tap into and model for our firm.

25/05/2022 What is your favorite quote?

Time is limited, death is certain. People live as if they have forever, but they don’t. That perspective makes you deliberate about the difference you make every day.

25/05/2022 What is your favorite book?

If I could only take one to Mars, it would be the Bible, it underpins much of Western culture. For business, The Snowball on Buffett is my top pick. Other favorites include King of Capital (Schwarzman), The Founders Mentality (Bain), The Outsiders (Thorndike), Toughen Up (Michael Hill), and Titan. Recently I’ve been sharing 100 Baggers by Chris Mayer with partners, it shows how long-term compounding creates extraordinary results.

25/05/2022 What is something most people don’t know about you?

Most people already know me as someone who deeply cares about colleagues and clients. I don’t keep much hidden.

25/05/2022 What is your biggest regret?

I wouldn’t call it regret, but my dad passed away when I was 29. I wish I had filmed him telling his life story. He was wise, and I would love for my children to have known him.

25/05/2022 Who would you most like to have a drink with?

My father. He never met my wife or children, and I think he would have loved being part of their lives.

25/05/2022 What does your downtime look like?

I like to read, walk, run, and lift weights. I also make sure I spend every night having dinner with my family and every weekend with them. If I need to work, I do it at 4 a.m. on Saturdays before family time.

25/05/2022 Any final takeaways for the audience?

Don’t try to copy someone else’s routine or habits. The world doesn’t need another version of someone else. Wisdom starts with knowing yourself, your strengths, weaknesses, and authentic self. Bring that honestly and humbly, and keep growing.

25/05/2022 How have you grown alongside Kelly Partners?

I’ve always loved people, and this firm lets me spend every day helping them. That’s my sweet spot. Over 15 years I’ve become more patient, tolerant, and empathetic, with greater capacity to help. I attribute it partly to experience and partly to being a lifelong learner and maximizer, always curious, always improving.

25/05/2022 How does your family handle your drive?

My wife is a saint, and my kids understand who I am. It’s about mutual acceptance. I’m honest about what drives me, and I try to be equally accepting of them. That honesty keeps balance in place.

01/08/2022 Do you have a policy on directors’ minimum shareholding or loans to buy shares?

No, we do not. However, our directors hold significant shares, as filings show. We also never provide loans for directors to buy shares; they must do so independently.

16/11/2022 What has been the employee response to receiving company shares?

It was very interesting. When we first gave shares at the IPO, I personally wrote a check for 220,000 dollars, which equated to 1,000 dollars each for 220 people. After two years, more than 50 percent of them had never logged into Computershare to claim their shares or their dividends, which was disappointing. With Upstreet, everyone is engaged. They know they have shares, it feels personal, and it is in their hand in real time. Engagement has been much higher. Most importantly, I have not done this so I can say to our people, “I gave you this.” Instead, the purpose is to create real alignment with them in a way that is seamless and present in their daily lives.

16/11/2022 Have you noticed behavioral changes in your team from issuing shares

Yes. We listed the company for that reason and made everyone an owner. It has made a distinctive difference; people feel aligned. We live in an era of wide disparity between the wealthiest and the poorest. I cannot solve that globally, but within our business I can make sure our people genuinely feel like owners. They can call their broker and buy stock, but more importantly we acknowledge their efforts with something that is meaningful and tied to our mission. Instead of useless shopping vouchers, we give shares that help people become better off, including financially, and that has real long-term value.

16/11/2022 Why did you choose to issue shares instead of cash rewards for recruitment and referrals?

Most people are short term, and the key to achieving anything is delayed gratification. If you offer most people cash up front, they will take it. We decided not to offer cash but to give shares because it reflects our values and reinforces long-term thinking. We are giving people something they would not otherwise receive, and if they hold it, it can bring them significant benefit over time. The share price has not gone up in a straight line, but over five years it has performed well, making that argument stronger.

We have also converted small discretionary benefits into share benefits. For example, instead of a birthday cake we give shares. Our people like that, it is better for their health and better aligned with our mission. They themselves asked us to stop giving cakes because they wanted to avoid sugar. So we continuously challenge ourselves to animate our values in practical ways.

16/11/2022 Why were you meeting with Shaquille O’Neal?

I wrote a book when I was 22, after losing my job. I wrote to 80 prominent Australians, interviewed 34 of them, and asked about getting ahead, Australia today, and the future. More recently, Shaquille O’Neal was coming to Sydney. My kids wanted to meet him, and I arranged through a friend for him to attend a client function. I wanted to ask him how he built his life and what lessons he has learned personally, professionally, and financially. It went really well.

When you meet high achievers, you usually find they are nicer and more encouraging than most people. Shaq was terrific. We even talked about his businesses and how important ownership is for him. As a member of a minority community in the US, he models being a wise and successful businessperson. I found him inspiring.

01/02/2023 How are you managing your time and energy to achieve the 25-year BHAG?

Brendan, I plan my year in advance, book and pay for holidays upfront, set quarterly goals, and break them into monthly plans. I manage an ideal day and aim for 10,000 steps daily. I quit alcohol 18 months ago and surround myself with positive, solution-oriented people.

I rely heavily on our senior leaders. Business has never been just about me, and staying healthy, physically and mentally, is critical to play the long game. At 48, I have plans to age 50, 75, and 100. My family, colleagues, and clients are a great source of joy, and I feel more energized by our mission today than ever.

01/02/2023 Why do you publish checklists and books for investors?

As a team, we love learning. We believe personal development drives professional development. I hold myself to the same standard I expect from others, so I share my checklists and reading lists to set a public benchmark. It keeps me and our team accountable. If we commit to something, we will spill blood to deliver. That’s how my mind works.

01/02/2023 How do you judge character and define leadership?

For us, character is measured by three things: are you a person for others, do you keep your promises, and do you believe a team can do more than an individual? Leadership means making others better off, through self-sacrifice and taking responsibility for the benefit of others. I like Jim Collins’ level 5 leadership model: someone smart, humble, and determined. I aspire to that while recognizing progress, not perfection.

We’re fortunate to have an exceptional leadership team. Visitors to our offices often remark on the quality of our people. I tell them: meet our partners, meet our people. If you resonate with their values, join us. That’s how we’ve built momentum.

01/02/2023 With many vacancies open, how is recruitment progressing?

Roughly 70% of openings are due to growth and 30% are replacements. People naturally move around, but retention of our best talent is excellent. Our top 10% drive about 90% of outcomes, yet we focus on being a right-people organization, not just a people-focused one. We’re growing quickly and creating opportunities daily, so recruitment remains a key priority.

01/02/2023 Kenny, who are your business heroes?

Warren Buffett is absolutely my business hero, and I’m aligned with Brett on that. His values and approach to business are what we aspire to emulate.

01/02/2023 Kenny, what’s your secret to delivering first results as a listed firm?

It’s not me, it’s the team. We prepare early, focus consistently, and stick to accounting firms only, which keeps the business simple. After seven years, we’ve refined our processes, and with a disciplined team effort, consistency follows.

11/08/2023 What is your succession plan if you are unable to continue leading?

This question comes up often. At our recent Board meeting we confirmed a clear succession protocol. Two long-term leaders, each trained closely by me for more than 12 years, have been nominated to act as co-CEOs if needed. Every partnership agreement contains a succession plan, and our partners understand how the business should be run in my absence.

I now spend 75% of my time in the U.S., which reflects my confidence in our partners. Unlike the big four, where partners are glorified employees, our partner-owner drivers hold 49% of the business, nearly 10% of the listed stock, and many also invest in our equity fund and properties. Their net worth is tied to our success, and they are exceptional leaders. I see little risk to continuity, as they are the true drivers of this group.

11/08/2023 Can you elaborate on your comment about selling a stake and personal financial setup?

I study Warren Buffett’s personal financial structure. He left $130,000 outside Berkshire, which grew to over $1 billion and now pays him $40–60 million in annual dividends. That setup allowed him to take little from Berkshire and focus on compounding assets. I intend to create a similar position, enabling me to lead Kelly Partners with greater flexibility, low salary, and minimal dividend reliance. That will allow us to play a more expansive, long-term game in building a much larger business.

11/08/2023 Are you reducing reliance on yourself as a key man?

Yes. I constantly work to make myself less central. We have strong succession planning, and our partner-owner model ensures leadership is broadly distributed. While I bring ideas and energy, I share my mission and insights across the group, and our people are highly capable.

The CEO’s primary role is risk management. I follow the Mohnish Pabrai mindset: heads we win, tails we don’t lose. That means avoiding risks that could harm reputation, values, health, or relationships. We seek asymmetrical opportunities and relentlessly focus on protecting the business. I am confident in the strength and quality of our team and the durability of the model beyond me.

31/01/2024 What are your views on CEO compensation compared to Mark Leonard and Warren Buffett’s approach?

My average remuneration since inception has been about AUD200,000 per year, which is modest relative to market value. Rebecca and I own all our shares outright, and no shareholder has ever had to issue me stock simply for being CEO. I’ve tried to lead consistently for nearly two decades, in a world where consistency is rare, and I intend to continue building the business in that spirit. Like Buffett, I intend to fund my lifestyle with capital outside the business, which allows for the right long-term decisions inside the business.

I aim to follow the example of leaders I admire: Warren Buffett, Bernard Arnault, David Ogilvy, and Mark Leonard. Ogilvy sold his equity, which I see as a mistake, I will not do that. Over the next years, I’ll share more about how we structure compensation and ownership, but the principle remains: leadership through aligned ownership and modest direct remuneration.

31/01/2024 Any recent book recommendations?

Yes. My favorite of the past 12 months is The Dream of Solomeo by Brunello Cucinelli, which explores human-centered capitalism. I also recommend Going Public in the U.S. and The Dhandho Investor, which reflects much of our approach to life and business. Another is Les Schwab’s autobiography, which I am currently reading.

I also recommend The Rack We Built about Rackspace, which highlights the critical importance of values and culture. It shows how culture can be damaged when mercenaries, not missionaries, enter a business. That lesson resonates deeply with our experience. These books are excellent guides for understanding leadership, purpose, and long-term value creation.

31/01/2024 When will Be Better Offshore resume?

The program will return in the next 12 months. Over the past year, my focus has been on U.S. expansion, but we plan to bring in quality guests to share wisdom with our people, clients, and shareholders.

31/01/2024 Will you host a Berkshire-style AGM in Sydney?

Yes. We have planned it more than once and will do so imminently, subject to time and cost. With a larger team we would already be doing more, but we will commit more effort to this year’s AGM.

31/01/2024 How do you think about time allocation and opportunity cost?

Time is the ultimate capital. I prioritize health first, then family, then the business. I do not socialize much outside work, nor do I run side businesses. Everything I do commercially is within Kelly Partners, ensuring shareholders benefit fully.

There are two approaches: balance, or ruthless prioritization of what matters most. I choose the latter. We do not claim monopoly on wisdom but continually strive to improve understanding and outcomes. I thank shareholders for encouraging us to think harder through their questions. Being public has given us extraordinary partners and relationships, which is invaluable.

19/04/2024 How did your personal journey lead to starting Kelly Partners?

That is a great observation. A mentor of mine, now 64 and worth about $4 billion, once said that for $25 you can buy a book containing hundreds of years of wisdom and decades of business experience. If you are humble enough to take those lessons and apply them without ego, they will move you forward. They may not answer everything in full, since times change, but they will get you 80 percent of the way in almost any situation. From a young age, I was fortunate to realize this. I grew up as the middle of eight boys, which taught me self-reliance. My father ran a business and was hurt by an accountant who gambled and embezzled money. Seeing the damage to him changed my direction, I chose accounting over law, because it is the language of business. I joined Price Waterhouse as an undergraduate and spent four and a half years seeing great businesses up close. Later, I joined an investment bank, but I was told I did not fit in, which was true.

I remember one manager dismissing a billionaire client as “just a green grocer,” and that arrogance struck me. I wanted to learn from successful people, not belittle them. Losing that job actually freed me. At an outplacement service, a psychologist asked how I felt, and I admitted relief. I had followed all the rules, degrees, jobs, status, but my values were not money, status, or power. My father, who had come from humble beginnings and built a business in Australia, gave me two books: How to Win Friends and Influence People and Think and Grow Rich. The first emphasized working with people and focusing on their success, which was transformative. The second encouraged me to seek out successful people and ask them directly what made them succeed. Disenchanted with what I had seen in business, I wanted to find something mission-based and larger than individual egos.

So I made a list of 80 prominent Australians across politics, religion, academia, business, and sports. At 22, unemployed, I wrote to them asking for an hour of their time to answer 11 questions so I could share the insights in a book for young Australians. After making 5,000 phone calls over three months, I secured 34 interviews. This produced 800,000 words across four lever-arch files. Publishers had told me I would never get access, but once I did, they dismissed me because I was not a known media figure. Still, I believed there was an audience for a 22-year-old writing a book instead of feeling sorry for himself. That became my first book, which I now see as something very special.

To learn how to publish, I bought a cassette series from the authors of Chicken Soup for the Soul and every self-help tape I could find, filling a bookshelf in my garage. While making calls, I listened constantly. That broadened my mindset and tapped into what Gallup’s strengths test later confirmed was my number one strength: learning. I had also read Philip Fisher’s Common Stocks and Uncommon Profits, Alfred Rappaport’s Creating Shareholder Value, and the work of Warren Buffett and Charlie Munger. At that time in Australia, almost nobody knew who Buffett was. I read The Warren Buffett Way by Robert Hagstrom and realized I had found a model of integrity and value creation that shaped my own path.

19/04/2024 Why did you leave investment banking and return to accounting?

In investment banking, I realized something was fundamentally wrong. One colleague dismissed Warren Buffett, saying he had never heard of him. If you are in investment banking and do not know who Buffett is, you are in the wrong place. I came to learn that in professional services the one thing you cannot find is true service, and in investment banking the one thing you cannot find is a banker who actually invests. They are so transactional.

So I returned to chartered accounting, completed my Chartered Accountant program, did my master’s degree, and became a tax agent. I went through three firms, each time hoping to make equity partner. They promised pathways but never delivered, not because they were dishonest, but because as small-business operators they were too busy managing clients and survival. Eventually, in March 2006, my friend Scott asked me to help him out of a partnership. I took 75 percent, he kept 25, and I ran the business while he ran clients. Three months later, two other colleagues asked me to do the same. My wife Rebecca, also an accountant, encouraged me despite my frustration. We had a nine-month-old child and few options, so we invested $50,000, set fixed fees with 50 percent paid upfront to solve cash flow, and built run-rate revenue of about $12 million. Alongside that, I compounded my own capital at 60 percent per year for 18 years by following the wisdom of Buffett, Munger, Ben Graham, and Philip Fisher. I have always seen myself as an investor first, executing diligently on every lesson shared with me.

19/04/2024 How can people identify their natural skill set?

Often other people see your strengths before you do. In recruiting, I ask candidates if they do bookkeeping. Many casually mention handling books for parents or local businesses, which actually shows real ability. We once had a team member passionate about writing on stocks. I encouraged him to leave and focus on that, because it was his natural calling

The key is to notice what you do in your spare time without pay. For me, Saturdays and Sundays are spent reading or talking to people about business, not playing golf. Asking others what they see you as best at can also clarify things. If they had to trust you with a million dollars to do one thing, what would it be? That is often the truest signal of your talent.

19/04/2024 Why do you admire Bernard Arnault, and how did you meet him?

My greatest heroes are Bernard Arnault and David Ogilvy, followed by Warren Buffett, Charlie Munger, and Mark Leonard of Constellation Software. While Buffett and Munger are revered as investors, Arnault and Ogilvy inspire me because they built and operated global businesses with an investor’s mindset and relentless vision. Arnault turned LVMH into a luxury conglomerate when no one thought it possible, reshaping the entire industry much like Buffett did with Berkshire.

Luxury businesses fascinate me because they can last for centuries. Handmade, high-quality items tap into something deep in human nature, creating generational value. I admired Arnault so much that I read everything available in English and even had French material translated. I have always had a global perspective, my father migrated from England and taught me the world was larger than our suburb. Eventually, I reached Arnault through the same persistence I used with Buffett, who once returned a signed book to me after I wrote to him. These encounters have reinforced my belief that learning from the best shapes everything I do.

19/04/2024 How did you manage to meet Bernard Arnault, and what was the experience like?

I believe that if you can get near someone, you feel their energy and see that they are people too, even if they have built themselves into something extraordinary. That is why I was determined to meet Bernard Arnault. Knowing his great love was Christian Dior, I studied everything ever published about Dior, even owning original books. I approached the general manager of Dior in Sydney, shared my passion and knowledge, and eventually convinced him to connect me. I returned with my wife, purchased some dresses, and was invited to Paris for the Couture show, which Arnault always attends.

There, I met him briefly, perhaps a couple of minutes, though it felt like an hour. He was tall, lean, imperious, radiating intellect and character even from 20 yards away. It was an extraordinary life experience. My only regret is that I did not ask for a selfie, my wife insisted I behave. Unlike Buffett, whom I would never impose on given the limited time he has left, I felt Arnault still had many years ahead, making the meeting worthwhile. That encounter reinforced my belief in holding myself and my company against the highest standards, benchmarking against the very best in the world.

19/04/2024 How do you view alignment with shareholders and your board?

I own 48 percent of the group, so every consequence of my actions is felt directly by me. I have always behaved as a true owner, fully aligned with shareholders. When Lawrence Cunningham joined our board, the only other board he sat on was Constellation Software. Later, he also joined Markel. At the time, our market cap was under $200 million Australian, compared to Markel’s $8 billion and Constellation’s $50 billion. That should make people ask why he would sit on our board. For me, it comes back to surrounding myself with people of great ideas, because ideas shape actions, actions form habits, and habits determine the future.

19/04/2024 How is your compensation structured, and how do you respond to investor concerns?

When we listed in 2017, I asked to take only $1 in salary, but investors said that would misstate earnings. The board set my salary at 1 percent of revenue, which was $360,000 at the time. For five years, I did not increase that, even though I could have earned three times more working part-time as a chartered accountant. Over those years, we grew market cap from $45 million to around $350 million. My average remuneration has been about $250,000 a year over 18 years while creating over $600 million in value.

If I had been compensated like executives at Constellation or TransDigm, I would own far more of the group today. Instead, my interests have never come before the company’s. For example, the company lent me money to relocate to the US, which I have since repaid through property sales and by selling shares at a discount to the current market price. The structure is fair for shareholders and ensures alignment.

04/06/2024 Who is Brett Kelly?

I’m someone who likes to make things better. I’m 49 this year and started in accounting at 18. When I was 15, my father’s company was damaged by an accountant who embezzled money. That changed my path. I had planned to study law, but realized how critical accounting is. I joined Price Waterhouse as an undergraduate cadet and spent four and a half years there before moving into investment banking at Schroders. I lost my job, which was difficult at the time, but in hindsight, it reinforced that I didn’t fit in with transactional, short-term bankers.

From a young age, I read Philip Fisher, Ben Graham, Warren Buffett, and Charlie Munger. After banking, I worked in a software company that built one of the first tools for economic value added (EVA) analysis. That reinforced the principle that investors need returns above the weighted average cost of capital. I then interviewed 34 prominent Australians, turned those interviews into a bestselling self-published book, and did 200 speaking engagements. That experience gave me entrepreneurial skills most accountants never acquire, building a team, raising and risking capital, creating and selling a product. When I returned to accounting, I saw good businesses operated poorly, with unhappy people and weak succession planning. I studied Australia’s intergenerational report, saw succession as a huge issue, and in June 2006, my wife Rebecca and I founded Kelly Partners.

04/06/2024 What is a typical day for you?

Living in Los Angeles, I usually wake up around six, work out, and take the kids to school. If I need to work before school, I’ll use my study, then exercise afterward. My Australian workday starts at 3 p.m. and runs until 7 p.m. I then have dinner, and in the past I often worked again from 9 p.m. to midnight. Lately, I try to finish by 7 p.m. so I don’t work all night. During the mornings in the U.S., I focus on our businesses here and prospect for new firms. I’ve met with more than 100 firms across the U.S., which helps me learn the market and culture. Conferences are also easier to attend from here, allowing me to observe and connect with major players.

My days are highly structured. I have lunch at 1 p.m. every day and use physical reminders like a card with my goals, CEO responsibilities, and three-year plan, which I keep in my wallet and car. This aligns with our vivid vision and detailed calendars planned annually in December. On weekends, Saturdays are for family and workouts with my kids, two sons, 19 and 16, and a 12-year-old daughter. I walk 7,500–10,000 steps daily, enjoy reading in my study, and spend time by the beach. Sundays start with church, then activities with the kids, such as galleries or museums, and finish with family dinner. I may handle urgent Australian calls in the evening but aim for rest. Structure gives me freedom; with clear goals and calendars, I can focus without distraction.

04/06/2024 How is life in the U.S.? Are you missing Australia?

I’m enjoying life here. The quality of my experience depends on the quality of the people I’m with, and I’ve had the privilege to spend time with outstanding individuals. Whether in Barcelona, Texas, Florida, Sweden, or here in Los Angeles, being with great people makes me happy. Living in the U.S. has allowed me to do things I couldn’t easily do from Australia. For example, I spent two and a half days with Jim Collins in Boulder in a small group of ten, which was transformative. Experiences like that expand my perspective and leadership, which in turn expand our business.

Being here has energized our partners and senior leaders. The excitement of building in a market 15 times larger than Australia is contagious. Personally, I like the openness of people here, the sunshine, and the opportunities to connect with global thinkers and investors. It’s surreal but also motivating, and I believe the growth of our business is directly tied to the growth of its leaders. Living here helps me grow, and that energy translates across the whole organization.

21/08/2024 Do you have comments on proposed changes to the TASA code of conduct?

When politicians intervene in industries they don’t understand and fail to consult broadly, problems arise. While I don’t expect a negative impact on our business, the proposals need more discussion and reflection. Some elements could open the door to abuse, which helps no one. After the PwC scandal, the government likely felt compelled to act, but more measured consultation with practitioners would be preferable.

21/08/2024 Any book recommendations?

I recommend The Fastenal Story, highlighted on David Senra’s Founders podcast, which I listen to weekly and always find inspiring. I also recommend Accelerating Excellence by James King, which I’ve reread several times for its lessons on self-mastery and bringing out the best in others. We admire Mark Leonard’s approach and include universal values such as humility, empathy, and shared ownership in our owner’s manual. These ideas guide us to listen more, speak less, and remind ourselves of our limitations while striving to improve.

21/08/2024 Final remarks to shareholders, partners, and team?

I want to thank everyone for their commitment to KPG. Our progress often surprises even us, and it has only been possible through the collective efforts of 600 people, 100 equity partners, and, most personally, my wife, whose sacrifices and wisdom made our U.S. expansion possible. While I may articulate our mission, it is never the result of one person.

What matters most in life is who you get to spend your time with. We are fortunate to work with exceptional people, partners, clients, and communities. At 18 years old, KPG is still just beginning, and compounding will continue to surprise people. If we remain humble, curious, and determined, I believe the best is yet to come. Thank you all.

29/09/2024 What have you learned from Warren Buffett and others, and how does it shape your approach?

If I were not doing this, I would be an academic studying big ideas and their impact. I follow thought veins from original sources. I first discovered Warren Buffett through Philip Fisher’s Common Stocks and Uncommon Profits, then found Charlie Munger, who I personally identify with. At 19, I joined Price Waterhouse’s EVA group and studied Alfred Rappaport’s Creating Shareholder Value. I also built valuation software linked to Bloomberg and trained managers on EVA. Over time, I have read more than 3,000 books, taking lessons and applying them directly into the business.

From Buffett, I learned permanent capital and the holding company model. From David Ogilvy, the vision of a global professional services brand. From Bernard Arnault, how to buy old businesses and reinvigorate them. From Sam Walton, to go where others will not. From Ray Kroc, to productize a service and repeat it at scale. From Michael Hill, the importance of maintaining control when listing. From Mohnish Pabrai, the principle of “heads we win, tails we do not lose.” Buffett himself says his big ideas came from others, and mine are the same, a seamless patchwork of big ideas. Applying this to accounting firms is powerful. They are fundamentally good businesses, but often poorly run. We built a system to handle the 80% of recurring operations and free partners to focus on the 20% that creates impact. Buffett teaches compounding capital and reputation. I believe compounding big ideas, values, and behaviors delivers even better long-term returns.

29/09/2024 What lesson have you drawn from Buffett and Munger about life and relationships?

Life is ultimately about who you spend your time with, the quality of those relationships, and whether the people you love want to spend time with you. If you value wisdom, both Charlie Munger and Warren Buffett are very wise, and I have tried to learn from that.

29/09/2024 How do you apply what you learn from books and mentors?

The ultimate sign of respect for a teacher is to rigorously apply what they taught you. I treat all these thinkers and writers as teachers. A personal life hack of mine is writing thank-you letters to people whose books or ideas shaped me. I tell them what I learned, how I applied it, and the difference it made. Often they reply with gratitude, surprised that someone not only read their work but acted on it. My number one Gallup strength is learning, and to me, you have not truly learned something until you apply it.

29/09/2024 How do you manage your time to achieve so much?

Life is about standards. At 22, I interviewed former Australian Prime Minister Bob Hawke. His assistant showed me his diaries planned five years ahead. That changed my perspective. Since then, I plan years in advance, first my children’s school holidays, then group events, then my personal learning goals. I work intensely in the gaps.

I set quarterly goals, carry them on a card in my diary, and even tape them to my car’s steering wheel. I reflect daily and track priorities through scorecards, a method I developed from studying thousands of high performers. Success, to me, is achieving your own goals. My brother’s sudden death at 45 gave me urgency, time is limited and death is certain. I am intensely focused on living the best life I can with the time I have. While I am serious about my focus, I do not take myself too seriously. Other people may be more relaxed, and that is a gift in its own way.

09/11/2024 What has been your biggest learning in the past 12 months?

The biggest lesson is the importance of bringing in people who share our mission. We distinguish between missionaries, who are aligned with our long-term goals, and mercenaries, who may not be. Growing the business with people who believe in our vision is critical. That remains a strong focus as we continue to build partnerships and deliver opportunities for shareholders. I am more energized than ever about what lies ahead and grateful for the support of our quality shareholder group.

09/11/2024 What is employee sentiment toward KPG’s corporate trajectory?

Our people are energized by the opportunities we are creating. Unlike the rigid global model I experienced at Pricewaterhouse, we want staff to work across LA, London, or other offices without having to resign. We are building an intern program with a top 50 US college and will exchange interns between regions. Clients are already being referred across borders, and feedback from both staff and clients has been overwhelmingly positive. We differentiate ourselves by being willing to do things differently, even when that is uncomfortable in the short term, because it strengthens our long-term competitiveness.

09/11/2024 What bottlenecks to growth do board members see, and how are they being addressed?

Paul noted that acquisitions depend on whether potential partners are organized enough to act, so helping them plan is key. Ada emphasized people development, ensuring current staff grow and learn quickly while training the next generation. Ryan stressed balance: scaling outreach through partners while keeping integration and culture strong, since many companies fail by neglecting that. Steve observed that many target accountants are older and bogged down in day-to-day work, making it hard for them to focus on the future, though KPG has the team to convert opportunities once they decide.

19/11/2024 What would happen to KPG if something happened to Brett Kelly?

I am fit and healthy and continue to contribute, but the strength of Kelly Partners lies in our values and people. We prioritize acting in the interest of others, keeping our word, and playing as a team. I am proud of our more than 100 equity partners, 500 team members, and 20,000+ client groups. Their contributions drive these results, not just me.

While I may play a visible role, the business has been carefully structured with a model designed to endure. So long as that model is maintained with integrity, it is likely to outperform in the very long term regardless of individuals. The backstory and results from our people show consistent long-term performance, and I am confident that will continue whether or not I am present.

11/12/2024 What role do Lawrence Cunningham, Mark Leonard, and William Thorndike play in KPG?

I have read all of Lawrence Cunningham’s books for years. He reached out to me about four years ago asking if I was trying to build the “Constellation of the accounting industry,” to which I said yes. We became friends, and he later joined our board after serving as an observer. He has been invaluable in introducing me to high-quality people across the US. Lawrence also organized my meeting with Mark Leonard. Mark was incredibly generous, wise, and supportive, saying what we are building is worth continuing. Early on, I received a lot of negative feedback, so it is encouraging to have respected leaders validate what we are doing. William Thorndike has also invested, and his perspective as author of The Outsiders is very helpful. Being in the US allows me to meet the best people in the world more easily, which has been fantastic.

11/12/2024 How much time are you spending in the US versus Australia?

This year I made eight trips back to Australia, nine last year, and will do four next year. I usually leave Sunday night, arrive Tuesday, work until Saturday morning, and put in 16-hour days while I am there. I remain mainly based in the US, which works very well. Nobody is inspired by a small vision, our partners are energized by the mission. Next week we are holding our first offshore partners retreat in Hawaii, bringing together Americans, Australians, Hong Kong, and India. The group is energized, my kids are happy here, and when your wife and kids are happy and healthy, life is good.

11/12/2024 What keeps you awake at night about KPG?

I grew up with seven brothers in a family of eight boys, so nothing keeps me awake at night. I sleep from 10 to 5 most nights without drama. That said, if something is keeping you awake, it usually means you have not done the work to resolve it, so I stay awake and handle it rather than worry.

I am never satisfied with where we are. I do not go to sleep thinking everything is perfect. I sleep to stay healthy so I can work on the mission the next day. I love David Ogilvy’s idea of “holy dissatisfaction,” because I always believe we can become a much better business over time. I stay grateful each day for our health and the chance to keep improving.

23/12/2024 What inspired your books on wisdom and reflection?

I lost a job at 22, read a book that said to find people who achieved things and ask them what they did, and then saw the BBC’s Seven Up series, which followed people every seven years. That inspired me to stop every seven years, reflect, and write. Too many people I met in outplacement at age 50 had no idea how they ended up lost, stressed, and unemployed. My books are a series on wisdom, reminding us that if you get nothing else in life, get wisdom.

My father embodied that lesson. He treated people well, encouraged them, and showed me that people have unlimited potential. Sadly, most only realize it under extreme circumstances, like war. I learned that leaders often miss the extraordinary people right in front of them because they’re too focused on themselves. Steve Jobs once worked at Atari, Nelson Mandela was a law clerk. Imagine failing to nurture talent like that. Leadership should look up to people, not down on them. Through interviewing prime ministers, billionaires, sporting heroes, and others, I learned that everything meaningful is done with and through people. If leadership cannot unlock the full productivity and potential of each person, the firm cannot truly grow.

23/12/2024 Do you place responsibility on founders and owners to lead well rather than blame younger generations?

Absolutely. Great leaders serve their people first, using their talents in service to others so their people in turn serve clients. That cycle of mission, values, and vision creates a culture of difference-making. True leadership begins with humility, accountability, and the willingness to learn and improve. It is the opposite of the loud, performative style many assume leadership requires. The best leaders are quietly determined, authentic, and committed to making people healthier, wealthier, and wiser.

When leadership is self-serving, the business falters. I’ve seen it firsthand, running the firm for myself led to trouble until a partner helped me shift perspective. She would say, “Stop playing against yourself.” That reminder is key: often leaders’ biggest obstacle is themselves. When they get out of their own way, their authentic leadership can emerge and unlock extraordinary potential in their people.

23/12/2024 How do you help leaders and team members stop “playing against themselves”?

The good news is that research shows both negative and positive impacts ripple through teams. One underperformer drags down performance, but a great performer lifts everyone. People mirror their leaders, if you read more, get fitter, or work harder, they’ll follow. In 85 partnerships we’ve acquired, people and clients always reflected the values of the partner. So when leaders complain their people aren’t doing something, I remind them that their people are simply being them.

That’s why we require every partner to meet monthly one-on-one with each team member. Annual reviews don’t build relationships. Regular, intentional conversations show you care, and people reciprocate. Leadership means out-leading your team, operating at a higher level so they stretch toward you. It’s not entitlement, it’s sacrifice. If you won’t serve others, you aren’t a leader; you’re just a teller. Real leaders know their people deeply, their families, challenges, goals, and care enough to invest time and effort. Otherwise, you’re treating people like machines.

23/12/2024 What leadership mistakes have taught you the most?

Everything I share I’ve learned the hard way myself. One of my biggest lessons was that you’re not the boss because you hire, you’re the boss because you’re prepared to fire. I once kept someone on who was turning up late and dragging the team down. When I finally let him go, my team said I should have done it three months earlier. They didn’t want to “sign his death certificate”, that was my responsibility. Teams want you to lead, not avoid the hard parts.

Another mistake was over-promoting people. I often saw potential and assumed commitment would follow. But you can’t do someone else’s commitment for them. Some have the ability but not the willingness. Promoting them too early led to disappointment. I’ve learned that leadership is about discerning both potential and commitment, not just one or the other.

12/08/2025 Can you comment on Lawrence Cunningham’s departure from the board and any skill gap?

It was a privilege to have Lawrence on the board for three years. He contributed then and continues to support us now. He introduced us to influential people, including the senior team at Constellation Software, and gave us opportunities such as attending a Toronto conference where I was interviewed by Mark Leonard. Those experiences gave us confidence we are on the right track.

Lawrence remains in demand. He is on the boards of Constellation and Markel Insurance Group and has taken a senior academic role in Delaware. He simply could not keep doing everything. I respect his decision. He remains a huge friend of the business. There is no skill gap left by his departure, only gratitude for the benefit of his involvement.

12/08/2025 Can you comment on the departure of Lawrence Cunningham from the Board, and is there now a skills gap?

It was a privilege to have Lawrence on the Board for three years. He made enormous contributions and introduced us to valuable people, such as the senior team at Constellation Software, enabling us to attend their Toronto conference. I also participated in an interview with Mark Leonard, which gave us confidence we are on the right path.

Lawrence left because of his increasing commitments, including serving on other boards and taking a senior academic role in Delaware. He told me directly that he could not continue with everything, particularly what paid him the least. I respect that. He remains a supporter and friend of the business. There is no skills gap, only gratitude for what he contributed.

12/08/2025 Do you see yourself retiring or continuing long term?

It was partly a joke in the shareholder letter. If you are not operating at a world-class level, then you should retire. Personally, my focus is to get the group to a point where I can leave it like Buffett has left Berkshire. Longevity creates value. Leaders like Buffett, Larry Ellison, and Sam Walton managed themselves carefully to sustain long-term performance. I aim to do the same, looking after my health and running the business in a sustainable way.

Other

07/02/2022 Can you talk about the investment side of the business, its purpose, management, and criteria?

We established Kelly Partners Investment Office, modeled on McKinsey’s investment office, to provide a long-term wealth creation platform for our partners. It began as a partners’ fund with select clients and network investors, designed to give our people greater financial opportunities than they could find elsewhere. It is run by Anoop Kalra, whom I first met during Kelly Partners’ pre-IPO round. His experience includes Perpetual, Caledonia, and Eliston, making him one of Australia’s leading investors.

The fund is doing well, and we see it as part of a full-service, multi-generational offering. We are also building a multi-property fund, acquiring office properties so our partners can collectively own them, similar to if they had independent firms. Over time, we will also establish a value fund for partners and clients to invest in the world’s best businesses. This is a 25-year play, and we see meaningful opportunity ahead.

07/02/2022 Final remarks to the team and shareholders?

I want to recognize our entire team, from the most junior to the most senior, for their excellence. The quality of my life is defined by the people I work with and the clients we serve, and I am grateful every day for that. This is not the Brett show; it is a collective effort.

I am equally pleased with the quality of our shareholders, which has only improved over time. Globally, we now have extraordinary investors contributing to our thinking and helping us improve the lives of our people, clients, and communities. That is what excites us most: taking great ideas from our shareholders and executing them with passion to make a real difference. Thank you, and I hope everyone has a great day.

14/02/2022 What are your plans for the annual general meeting (AGM)?

We are preparing a very exciting AGM, aiming to create a southern hemisphere version of Berkshire Hathaway’s annual meeting. We are working hard to connect with thoughtful global investors who share a value mindset. To give an example, Lawrence Cunningham wrote a book on Berkshire’s shareholders. I wrote to every single one of them, sending books and letters, to build connections with people of quality and substance.

This is not just about the event itself but about surrounding ourselves with the best ideas and partners over time. We believe that deliberately curating our shareholder base and community will continue to strengthen our business. For me, that is just as important as the financial compounding. I love London, and although I cannot be there, I hope one day we host people at our Sydney AGM in the same spirit.

01/08/2022 Closing remarks to shareholders.

Thank you for your faith and support. Please refer clients or talented accountants to us, as we aim to be the best accounting firm for private clients. I thank our teams across all offices, our services team, our CFO Kenneth Ko, our General Counsel Joyce Our, and the whole senior executive team.

It has been another great year. We continue pushing innovation and making investments for the future. The first five years as a listed company have been a warm-up, and now we know much more about what we are doing. That gives me great confidence in the future prospects of the business.

16/11/2022 Any closing reflections?

I must head to my next meeting, but I want to emphasize how strongly we support Upstreet and the difference it has made. When I started the business, I borrowed 160,000 dollars. Today our market cap is about 225 million. We have compounded equity at 60 percent a year for 16 years. This approach is one of the clues to that success. We are proud of the culture, the alignment, and the results this has created.

01/02/2023 Final remarks to shareholders?

We take shareholder partnership very seriously. With 1,300 shareholders, we view ourselves as in business together, building something meaningful for clients, people, and communities. Being listed gives us not just capital but insight, ideas, and connections from our partners worldwide. That value far outweighs the small financial cost of listing.

I want to thank all of you for your support. We’re committed to growing KPG into a stronger and better business every day. Have a great day, and thank you.

11/08/2023 Final comments to shareholders?

We are grateful for the commitment of our quality shareholders, partners, team members, clients, and communities. None are taken for granted. By operating consistently with our mission and values over the long term, with intensity and focus, we believe the future for Kelly Partners is increasingly bright.

Thank you to everyone for your involvement, questions, and partnership. We welcome continued dialogue, and I encourage anyone with further analysis or questions to reach out to Ken or me directly. And with that, as I like to say, have a great day.

31/01/2024 Final comments?

We have over 550 people in the group, all making world-class contributions. It is a privilege to represent them. I represent the business, not myself, and I know shareholders will be impressed with the quality of our people. Thank you for your time, your support, and for being true partners in our mission. We are in a tremendous position to deliver meaningful, long-term value, and I look forward to continuing the journey with you.

09/11/2024 Why did you conduct a strategic review with Jefferies?

From time to time, reflection is due. We see the business as having huge potential, and working with bright people who share that view made sense. Jefferies wanted to work with us, and we with them. Together we considered how best to operate the business for the long term, seeking external input from people we respect who could highlight options we might not otherwise see.

09/11/2024 How do shareholder events like the Omaha gathering fit into your strategy?

At the Berkshire Hathaway meeting in Omaha, we hosted a shareholder gathering that brought together investors from around the world. It allowed us to share insights, learn how to run businesses better, and strengthen relationships. The event was memorable, and we have already booked the same venue again. We encourage shareholders to join us in the future as these gatherings add real value to our community.

09/11/2024 What formal items were covered at the Annual General Meeting?

We noted that minutes from the prior AGM, held on 16 November 2022, are available through the company secretary. The Notice of Meeting was mailed to members on 10 October 2023 and taken as read. Voting is being conducted via an online poll, with Computershare appointed as returning officer. Eligible shareholders can access resolutions through the online platform and cast their votes accordingly.

09/11/2024 What resolutions were voted on at the AGM?

Four resolutions were considered: adoption of the remuneration report, re-election of Director Stephen Rubrey, re-election of Director Paul Cook, and remuneration of non-executive directors. All resolutions were conducted by poll with proxies presented on screen. Final results were to be announced to the ASX after confirmation by Computershare. The Chairman thanked Mr. Rubrey and Mr. Cook for their significant contributions since pre-IPO, noting the heavy workload undertaken with modest remuneration.

09/11/2024 What closing message do you want to share with shareholders?

We are humbled by the ongoing support from shareholders, partners, team members, clients, and community organizations. The business is long-term focused, and our people are united and energized by the opportunities ahead. While we enjoy taking the time for an AGM, our passion remains on building partnerships and communities that last. It is a privilege to do what we do, and I thank everyone for their commitment. Have a great day.

19/11/2024 Do you consider the business undervalued?

No, I do not. Over time, we have explained how to value this type of business, and our responsibility as management is to keep driving value for all stakeholders. That is where we remain focused.

23/12/2024 Where can people find more of your work and ideas?

I share content across platforms, Instagram, YouTube, LinkedIn, TikTok, and through our websites, kellypartnersgroup.com.au and brettkelly.com.au, which include videos and books. I also host the Be Better Off Show podcast with around 80 episodes and may add more soon. If someone wants to reach me, they can email and my assistant will make time.

I love interviewing people, whether it’s Jordan Peterson, Shaquille O’Neal, or a client, because everyone has a story and unique wisdom. Listening and learning from others keeps me growing, and it reinforces what I believe: this profession is a privilege. We sit in people’s lives at very meaningful points, and it’s up to us what difference we make while we’re there.

04/02/2025 How will a US listing affect current shareholders?

Our understanding is that ordinary equity owners, and we only have ordinary equity on issue, would be issued ordinary equity in what is likely to be a Cayman Islands top-co structure. There may be some other benefits within that structure, but the transition should be seamless.

Effectively, you would stop trading here one day and start trading there the next, continuing as a shareholder in what would then be a US-listed entity.

04/02/2025 Are you intending to create a dual class structure in any US listing?

We have been advised that while we will not have a traditional dual class structure, we will adopt a variation. All shareholders will receive ordinaries for ordinaries in the Cayman Islands top-co, with an additional benefit for existing shareholders.

This structure is designed to reward long-term holders by increasing their proportional influence the longer they remain invested, which aligns with our values and approach to governance.

04/02/2025 Is the US listing intended as a dual listing alongside the ASX?

No, it is not. We intend to leave the ASX and list in New York. Dual listing would add unnecessary cost without delivering benefits.

04/02/2025 What are the pros and cons of creating a dual class structure to maintain control in a US listing?

We worked with Munger Tolles & Olson, particularly Ron Olson who has long advised Warren Buffett and designed structures for Berkshire, Snapchat, and Alphabet. He has developed a structure for us that gives the best chance of retaining control while expanding access to capital.

Our model is unusual, and many people misunderstand it at first glance. Without the right structure, it would be difficult to preserve. This approach allows us to protect the integrity of our owner-driver model while raising capital to grow over the next decade. If the economics are not right, we will remain patient before executing.

12/08/2025 How do you view shareholder impact stories like Jack’s?

Hearing Jack say he bought his first home after investing in KPG during COVID gives me enormous joy. One of my greatest privileges is trying to operate with Olympic-level commitment, doing business properly, and making a difference for our people, partners, communities, and shareholders.

At Berkshire’s meeting in May, Buffett said he avoided institutional shareholders because he wanted to make a difference for individuals, and that sustained him for sixty years. That resonates with me. I hope Jack bought a modest home so he can stay invested in KPG and other strong businesses. There is still much more ahead for us.

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