How Private Equity is Reshaping Architecture, Engineering, and Construction for the Future

Private equity is becoming a game-changer for Architecture, Engineering, and Construction (AEC) firms. It offers not just capital but strategic resources to fuel growth and innovation. But what does this mean for AEC businesses? How can firms position themselves to attract the right kind of private equity partner?

In our latest AEC Unscripted podcast episode, we spoke with Ashraf Jahangir, PE, Chief Strategy Officer at Verdantas, a firm that exemplifies how private equity can transform an organization. Since its inception in 2020, Verdantas, an integrated environmental science, engineering, and consulting firm, has experienced remarkable growth. What began as a merger of three firms has expanded to include approximately 1,700 professionals across 75 locations, driven by nearly 20 acquisitions and backed by Sterling Investment Partners.

Ashraf shared valuable insights into how private equity is reshaping the AEC industry and the opportunities and challenges that come with it. In this blog, we’ll explore the highlights of that conversation and give you a taste of why this episode is a must-listen.

Redefining Growth with Private Equity

For many AEC firms, growth is no longer optional – it’s essential to remain competitive in an increasingly dynamic marketplace. Private Equity fills a critical gap by providing resources, expertise, and a long-term vision for success. As Ashraf explained, private equity doesn’t just bring capital to the table; it also introduces tools, market intelligence, and operational insights that help firms like Verdantas optimize processes and refine their strategies.

“Private equity is bringing in resources that would have otherwise been hard to come by.” Ashraf shared. “It’s not just about funding, but about leveraging that capital to optimize operations, scale, and most importantly, support our people.”

At Verdantas, private equity-backed growth isn’t just about acquisitions – it’s about finding the right acquisitions. Ashraf emphasized the importance of focusing on firms that align with Verdantas’ strategic goals in core markets like environmental science, water, and energy transition. “We are very focused on where we grow. It’s about ensuring that every acquisition fits with our broader vision. Our growth is about reinforcing our mission to be at the forefront of solving global challenges like climate change and energy transition.” 

Culture Matters: Employee Focus as a Growth Driver

One of the most striking aspects of Verdantas’ story is its commitment to an employee-first culture, even amid rapid growth. As Ashraf noted, Verdantas has prioritized transparency, inclusion, and engagement at every stage of its journey. This focus has paid off: Verdantas boasts an industry-leading voluntary turnover rate of under 8%, compared to the 11-12% typically seen in the AEC sector.

“Our people are the heart of Verdantas,” Ashraf said. “We believe that if we focus on creating a culture of openness, transparency, and opportunity, the growth will come. It’s about aligning our employees’ success with the success of the company.”

Verdantas has also integrated employees into its ownership structure, ensuring that the people driving the firm’s success share in the rewards. With more than 350 employees now holding equity, Verdantas has created a shared purpose and accountability that aligns perfectly with its private equity-based growth strategy.

Strategic Discipline: Filtering for Success

Ashraf highlighted the importance of clear filters for organic growth and acquisitions. By focusing on firms that complement Verdantas’ strengths in environment, water, and energy transition, Verdantas ensures that every acquisition contributes to its long-term goals.

“We’re focused on making sure that we’re not just adding any firm to our portfolio, but firms that align with our strategic vision. We know what works for us. It’s about staying disciplined, and sometimes that means saying no to great opportunities if they don’t fit our thesis.”

This disciplined approach has allowed Verdantas to avoid the pitfalls of “growth for growth’s sake” and instead pursue partnerships that enhance its service offerings and geographic reach. Private equity has played a pivotal role in refining these filters. Working with Sterling, Verdantas has sharpened its focus on strategic priorities, enabling the firm to make confident decisions about which opportunities to pursue and which to pass on.

Lessons for Buyers and Sellers in the AEC Industry

Ashraf’s experience offers valuable lessons for firms navigating the private equity landscape. Here are some key takeaways:

For Buyers

“Don’t rush in and assume everything will fit. Take the time to understand your target firm’s culture, its systems, and how well they’ll integrate with yours. Having those honest conversations early will save you from surprises later on.”

For Sellers

“Understand that change is inevitable – but it’s not all negative.” The right private equity partner will help you refine your strategy, provide operational support, and ultimately help you scale in ways you might not have been able to on your own.”

Ashraf also stressed the importance of viewing private equity as a partner, not just an investor. “It’s collaboration. The most successful private equity relationships are those where the firm’s leadership embraces the partnership and views it as a means of accelerating their vision, not diluting it.”

Why Private Equity Matters in AEC

The AEC industry is at a pivotal moment. Infrastructure investment, climate change, and energy transition are driving unprecedented demand for engineering and environmental services. Firms need the capital and expertise that private equity provides to meet these challenges. Verdantas’ story demonstrates how the right partnership can unlock growth, drive innovation, and create opportunities for employees, clients, and communities.

Ready to Learn More?

Private equity is reshaping the AEC industry, and Verdantas is leading the way. To hear Ashraf’s full insights, including actionable advice for buyers and sellers, listen to our latest episode of AEC Unscripted: M&A Edition.