Welcome back to Experience in Clubhouse Design, the podcast where we explore the evolving world of private club architecture, design trends, and the business forces shaping the industry. Today we're diving deep into a seismic shift happening right now in the architecture world—one that's particularly relevant to those of us in the club and hospitality space.

In August 2025, Kuo Diedrich Chi Architects, better known as KDC, announced they were joining ClubWorks as a partner firm. For those unfamiliar, KDC is an absolute powerhouse in our industry. They've been the creative force behind multiple winners in Golf Inc.'s Amenity of the Year, Golden Fork, and Clubhouse of the Year competitions. They aren't just award-winners; they're the firms shaping how members experience luxury, community, and hospitality.

But here's what makes this announcement significant: it's not just another merger. It's part of a much larger trend—private equity and private capital rolling up professional services firms, including architecture practices. And this trend is accelerating fast.

Today, we're going to unpack what this means for the industry, for design quality, for innovation, and ultimately, for the clubs and resorts that we all care about.

Let's start with the basics. What exactly happened here?

Kuo Diedrich Chi Architects was formed in 2017 through a merger of two established firms, Kuo Diedrich and Chi Design Group. They've built a stellar reputation in the club and hospitality space. Now, they've joined ClubWorks, which describes itself as a network of wholly owned firms providing professional services in the private club, real estate, and hospitality industries.

Here's what's interesting about ClubWorks. it's not just buying up architecture firms randomly. They've created what you might call a one-stop-shop for private clubs. Their portfolio now includes:

• Peacock + Lewis Architects and Planners
• JBD JGA Design and Architecture
• Visionary Spectacle Studios (architectural visualization)
• GGA Partners (consulting)
• Private Club Films (video production)
• ClubWorks Engineering
• Buffalo Groupe (marketing)
• And now, KDC

Do you see the pattern? They're assembling an integrated service platform. If you're a club looking to do a major renovation or build a new facility, ClubWorks can theoretically handle everything from initial consulting to architecture, interior design, engineering, marketing videos, and even helping you communicate with your membership.

Michael Leemhuis, Chairman and CEO of ClubWorks, said something telling in the announcement: "Their influence is respected globally across the club industry, and we're proud to welcome them into ClubWorks as we continue shaping the future of experiential environments."

Notice that phrase "shaping the future." That's the language of consolidation and transformation.

Now, let's zoom out. What KDC and ClubWorks represent is just one data point in a much larger phenomenon. Private equity has discovered professional services firms, and they're pouring money into the sector at an unprecedented rate.

The numbers are staggering. The private equity market in the United States alone was expected to reach $460 billion in 2024, with projections to hit $765 billion by 2027 representing an 11% compound annual growth rate. After a two-year slowdown, deal activity rebounded strongly in 2024, with global private equity deal volume increasing 22%, from $1.3 trillion in 2023 to $1.7 trillion in 2024.

But here's what's really interesting: professional services firms have become a particular favorite. We're seeing massive investments in accounting firms, consulting practices, wealth management companies and yes, architecture firms.

Why? Three reasons keep coming up:

First: Recurring Revenue. These firms have predictable cash flows. Clubs need ongoing design work. Restaurants need renovations. Resorts have continuous development projects. For private equity, that predictability is gold.

Second: Fragmentation. The architecture industry, particularly in specialized niches like club and hospitality design, is highly fragmented. There are dozens of small to mid-sized firms. Private equity loves fragmentation because it creates consolidation opportunities. They can build what's called a "platform" company like ClubWorks and then execute a "buy-and-build" strategy, acquiring smaller firms and integrating them into a larger network.

Third: Scalability with Technology. Modern architecture practices can leverage technology in ways that weren't possible a decade ago. AI-assisted design, virtual reality walkthroughs, cloud-based collaboration tools, advanced rendering software all of this means firms can do more with less, or serve more clients without proportionally increasing headcount. Private equity sees this as a value creation opportunity.

According to multiple industry reports, add-on acquisitions in professional services which includes architecture have become a primary driver of private equity deal activity. In some segments, add-on deals represented nearly 80% of all transactions. These aren't massive, headline-grabbing buyouts. They're strategic additions to existing platforms, building scale and service capabilities.

So let's talk about the upside. What are the potential advantages of private equity involvement in architecture, particularly in our niche of club and hospitality design?

Advantage 1: Capital for Investment

Architecture firms traditionally operate on relatively thin margins. They're partnership models where profits get distributed annually. This structure doesn't encourage major capital investments. But clubs and resorts are demanding increasingly sophisticated services virtual reality presentations, sustainability consulting, smart building integration, wellness design expertise.

Private equity brings capital that can fund these investments. A firm backed by PE can afford to hire specialists in emerging areas, invest in cutting-edge software, or even fund research and development into new design methodologies.

Howard Kuo, principal of KDC, hinted at this when he said their partnership with ClubWorks would allow them to "scale creativity, push boundaries and deliver even more impactful solutions for our golf club and hospitality clients and partners around the world."

Advantage 2: Integrated Service Delivery

Think about the typical club renovation from a General Manager's perspective. You hire a consultant to assess needs. Then you hire an architect. Then a separate interior designer. Then engineers. Then someone to do renderings. Then a marketing firm to help communicate the project to your membership. Every handoff is a potential point of friction, miscommunication, or delay.

What ClubWorks is building and what similar platforms aim to achieve is eliminating those handoffs. One relationship, one accountability structure, theoretically better coordination.

For club leaders, this could mean faster projects, fewer surprises, and more predictable outcomes.

Advantage 3: Operational Excellence

Private equity firms bring sophisticated operational frameworks. They have playbooks for improving financial management, optimizing pricing strategies, standardizing quality control, and developing talent. Many smaller architecture firms are run by brilliant designers who, let's be honest, may not be equally brilliant at business management.

PE-backed firms can implement systems that improve efficiency without compromising design quality. Better project management software. Standardized contract templates. More disciplined budgeting and scheduling. These aren't sexy topics, but they make a real difference in client experience.

Advantage 4: Geographic and Service Expansion

With PE backing, firms can more easily expand into new markets or add complementary services. A firm known for clubhouses might add restaurant design. A firm strong in golf facilities might expand into wellness centers or residential hospitality. This breadth can benefit clients looking for consistent design language across multiple project types.

Now, let's address the elephant in the room. Because for every advantage, there's a legitimate concern. And frankly, some of these concerns are significant.

Concern 1: The Partnership Model vs. The Corporate Model

Architecture, particularly at the high end, has traditionally operated on a partnership model. Senior designers have ownership stakes. They're not just employees; they're literally partners. This structure aligns incentives—when a project succeeds and a client is thrilled, the partners benefit directly.

Private equity changes this fundamentally. Partners become employees, or at best, minority shareholders. The primary accountability shifts from clients and creative excellence to investors and financial returns.

Will this change the culture? Almost certainly. The question is whether it changes it for better or worse.

Concern 2: The Pressure for Growth and Returns

Private equity firms typically hold investments for 5-7 years. During that period, they need to demonstrate significant value creation to achieve returns that satisfy their limited partners the pension funds, endowments, and family offices that invest in PE funds.

This creates pressure for growth. Rapid growth. Which often means more projects, more clients, more revenue. But architecture isn't manufacturing widgets. Quality design requires time, iteration, deep client relationships, and sometimes, saying no to projects that aren't the right fit.

Will PE-backed firms start taking on too many projects? Will junior staff get stretched too thin? Will the quality control that built these firms' reputations suffer in the pursuit of scale?

Concern 3: The Homogenization Risk

One of the joys of the club and hospitality design world is its diversity. Different firms bring different aesthetic sensibilities. Different philosophical approaches. Different regional influences. This variety is healthy it means clubs can find designers whose vision aligns with their unique character and membership.

But consolidation tends toward standardization. When multiple firms operate under one corporate umbrella, there's pressure for consistency in processes, deliverables, and yes, even design approaches. Will we start seeing more cookie-cutter solutions? Will the distinctive creative voices that made these firms special get diluted?

Concern 4: Talent Retention and Compensation

Here's a uncomfortable truth: many talented architects join firms with the hope of eventually becoming partners. It's the traditional career path work your way up, prove your value, eventually get an ownership stake and a meaningful share of profits.

In a PE-owned structure, that path becomes much more limited. There's less equity to go around. The upside gets captured primarily by the PE investors. Will top design talent start avoiding PE-backed firms? Will the best young architects gravitate toward remaining independent practices?

Some PE-backed professional services firms have addressed this through creative equity and bonus structures. But it's a real challenge, and in a people-intensive business like architecture, losing top talent can be devastating.

Concern 5: The Exit Imperative

Private equity investments have exits. Eventually, the PE firm needs to sell the company either to another PE firm, to a strategic buyer, or occasionally through an IPO. This creates uncertainty for clients.

Imagine you're a club that's developed a 15-year relationship with a particular architecture firm. You trust them. They understand your culture. You've worked together on multiple successful projects. Then private equity buys the firm. Then five years later, they sell it to another private equity firm with a different investment thesis.

At each transition point, things change. Leadership changes. Priorities shift. Suddenly, your trusted design partner feels less stable.

Concern 6: The Financialization of Design

Perhaps the deepest concern is philosophical. Great architecture comes from a place of passion, craft, and service to clients. It's about solving problems elegantly, creating spaces that enhance human experience, honoring context and culture.

Private equity comes from a place of financial engineering, return optimization, and exit strategies. These aren't inherently bad capitalism needs efficient capital allocation. But they're fundamentally different value systems.

Can these two worldviews coexist productively? Or will the financial imperative gradually crowd out the design imperative?

We're not entirely in uncharted territory here. Private equity has been rolling up other professional services sectors for years. We can learn from their experiences.

The accounting industry provides a particularly relevant case study. For decades, accounting firms operated as traditional partnerships. Then, starting in the 2010s and accelerating recently, private equity discovered the sector.

The results have been mixed. On the positive side, P E backed accounting firms have successfully invested in technology, expanded service offerings, and achieved scale that allows them to compete more effectively. Many have grown rapidly through acquisitions and have improved operational efficiency.

On the negative side, there have been culture clashes, partner retention issues, and concerns about whether the focus on financial metrics has compromised service quality. Some traditional accounting professionals lament the loss of the partnership ethos.

The consulting industry is another instructive example. Firms like Accenture successfully transitioned from partnership models to corporate structures and have thrived. But they maintained strong cultures focused on professional development and client service. The ones that treated consultants as interchangeable resources rather than valued professionals struggled with retention and reputation.

The lesson seems to be this: structure matters less than culture and leadership. PE-backed professional services firms can maintain quality and integrity but it requires deliberate effort, strong leadership, and investors who genuinely understand and value the professional services ethos.

So what does all this mean practically for club managers, boards, and others in the hospitality space who hire architects?

For Club Leaders:

First, do your homework. If you're considering working with a PE-backed architecture firm, understand their ownership structure. Who makes the final decisions? How stable is the leadership? What's the expected exit timeline? You're entering into relationships that might span years—you want to ensure your design partner will be there for the long haul.

Second, insist on continuity. Put provisions in your contracts that specify which designers will actually work on your project. The firm's reputation was built by specific talented individuals. Make sure those individuals will be dedicated to your project, not spread thin across a dozen others.

Third, consider the advantages. Don't dismiss PE-backed firms automatically. They may offer capabilities—integrated services, advanced technology, geographic reach—that independent firms simply can't match. Evaluate them on their merits.

For Architects:

If you're considering selling to private equity or joining a PE-backed platform, be clear-eyed about the tradeoffs. You'll likely get immediate liquidity and potentially powerful resources for growth. But you'll also be giving up autonomy and probably a degree of creative control.

Talk to other architects who've made similar moves. Understand what changed and what didn't. And negotiate thoughtfully—not just on price, but on governance, creative authority, and client relationship management.

For Design Talent:

This trend will reshape career paths in architecture. The traditional partnership track may become less available. But PE-backed firms may offer other advantages—better salaries, more structured career development, exposure to larger and more diverse projects.

Choose firms based on culture and leadership, not just ownership structure. A well-run PE-backed firm that values its people and maintains design excellence may be a better career choice than a dysfunctional independent partnership.

For the Industry:

The architecture profession should be having serious conversations about this trend. What regulations or professional standards might be needed to ensure PE involvement doesn't compromise design quality or professional ethics? How can the industry preserve its best values—craftsmanship, client service, creative excellence—while embracing potentially beneficial capital and operational improvements?

So where does this all go?

Based on the broader private equity trends, we can make some educated predictions. First, consolidation will accelerate. We'll likely see several large platforms emerge in the club and hospitality architecture space, each owning multiple firms. ClubWorks appears to be building one. There will probably be others.

Second, independent boutique firms will face pressure but won't disappear. Some clients will always prefer the personal touch and creative freedom of independent architects. These firms may need to specialize more narrowly or compete on pure creative excellence, but there will be a market for them.

Third, we'll see experimentation with hybrid models. Perhaps firms will be partially PE-backed while maintaining some partnership structure. Or maybe we'll see profit-sharing arrangements that align incentives across both investor and design talent.

Fourth, technology will continue to be a differentiator. The firms that most successfully integrate AI, virtual reality, sustainability analysis, and data-driven design will have advantages regardless of their ownership structure.

And finally, quality will ultimately determine outcomes. If PE-backed architecture platforms maintain design excellence and client service, they'll succeed and the model will prove viable. If financial pressures compromise quality, clients will notice and react accordingly.

The KDC-ClubWorks deal is an important test case. KDC has a stellar reputation. ClubWorks is building an impressive integrated platform. If they can maintain what made KDC special—creative excellence, client relationships, design innovation—while adding the advantages of scale and resources, they'll validate the model.

If instead we see dilution of quality, loss of creative leaders, or clubs feeling like they're getting generic solutions, it will raise serious questions about whether private equity and high-end architecture are truly compatible.

The private equity wave in architecture is here. It's not a maybe or a someday—it's happening right now, and it's going to reshape the industry we all work in and care about.

Like any major change, it brings both opportunities and risks. Capital and scale and operational excellence on one side. Potential loss of culture and creative autonomy and client focus on the other.

The outcome isn't predetermined. It will depend on the choices that PE investors make, the leadership that architects provide, and the standards that clients demand.

For those of us in the club and hospitality world, this isn't just an interesting trend to observe from the sidelines. It directly affects the quality of spaces we'll be designing, building, and operating for decades to come.

So stay informed. Ask questions. Hold your design partners—regardless of their ownership structure—to the highest standards. And help ensure that as the business model of architecture evolves, the core values of great design remain unchanged.

That's all for today's deep dive into the private equity revolution in architecture. I hope this gave you a lot to think about. If you found this valuable, please subscribe and share it with colleagues who care about the future of club and hospitality design.

Keep building spaces that bring people together and create unforgettable experiences.

Sources Referenced:

• Golf Inc. Magazine - "Kuo Diedrich Chi Architects joins ClubWorks"
• EY Private Equity Insights 2024-2025
• Cherry Bekaert Private Equity Industry Reports 2024-2025
• McKinsey Global Private Markets Report 2025
• BDO Professional Services PE Trends Analysis
• Cooper Parry Professional Services Insights
• AlphaSense Private Equity Trends 2025