KPMG is in advanced negotiations about a sale of its pensions advisory unit division to Exponent Private Equity.

News of the potential sale come as the accountancy firm looks to restructure its business.

Regulatory pressure on KPMG — and its other big four rivals — has increased this year following the discovery of deeply flawed audits carried out by the company in 2018, which led to it being fined £18m by the Financial Reporting Council.

KPMG’s pensions division advises clients on the management of pension assets worth over £50 billion and employs about 450 people.

Sky News has reported that Exponent is working on a deal for the business worth in excess of £200 million.

Talks about a sale of the unit have reportedly been taking place since June, with a number of other bidders submitting offers to KPMG.

KPMG UK chairman, Bill Michael, has been vocal in his desire to see the firm reform its practices.

The company has invested £45m into its audit arm, including the recruitment of 800 new auditors after deciding to end all non-audit work for audit clients last year, which had an impact on its pension and tax businesses.

This decision, along with the technological disruption and regulatory redrawing of the audit market facing KPMG, are the drivers behind the firm’s decision to sell its pensions unit.

A spokesperson for KPMG commented: “Following significant interest in our market-leading pensions practice, we can confirm we have entered into exclusive talks with Exponent with a view to progressing a sale. We will not comment further while negotiations remain ongoing.”

Exponent Private Equity has previously backed companies such as Quorn, the meat-free food brand, and whisky producer Loch Lomond Distillery.

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