PER’s Essmann: Competition for PE talent is heating up

As the operating environment for private equity firms becomes more complex, chief financial officers and finance teams are facing a fast-growing and evolving to-do list. Nadja Essmann, CFO practice head at executive search firm PER, tells Private Funds CFO how this is impacting the types of skills small and mid-sized PE firms are looking for in finance recruits, and why professionals who can demonstrate those skills are so highly sought after.

What skills and experience are private equity funds looking for when hiring CFOs to their firms today?

Private equity firms usually approach us with a comprehensive and multifaceted list of requirements for their fund CFO roles. These criteria typically cover several crucial areas, such as fund accounting, financial reporting, controlling, tax, legal, compliance, fund administration, investor relations, treasury management and adherence to regulatory standards. Moreover, candidates are expected to possess expertise in investment analysis, enhancing financial structures, improving operational efficiencies, and providing support to portfolio companies on finance matters. Familiarity with IT systems is also seen as increasingly important. CFOs should ideally boast several years of previous experience in the private capital sector, enabling them to adeptly navigate the distinct challenges and complexities inherent in this dynamic industry.

How much competition is there for CFOs and finance professionals in PE funds?

Competition for fund CFOs and finance professionals in private equity is intense due to the continuously expanding market. With high demand, it’s a candidate-driven market. Experienced private equity fund CFOs are highly sought after, but they often have many options and are less inclined to switch due to their carry participation. Hence, private equity funds frequently recruit finance experts from the Big Four firms with a background in audit and the potential to learn the requisite skills for the fund CFO role, and then train and develop them internally.

How can PE funds improve their chances of attracting top talent in this area? 

Private equity funds should cultivate a positive company culture that values diversity, collaboration and innovation. Competitive compensation packages, including carry participation, incentivize long-term commitment. Highlighting career development opportunities and meaningful work within the organization can further entice finance professionals. Additionally, offering work-life balance initiatives, including flexibility and support, acknowledges the importance of employees’ wellbeing. By prioritizing these factors, private equity funds can enhance their appeal to top talent in the finance sector, ensuring a mutually beneficial relationship for both the firm and its employees.

Are you seeing any changes in the types of finance roles being recruited?

As the private equity industry continues to grow and professionalize, there is a noticeable evolution in the types of finance professionals being recruited. Smaller funds often require versatile finance specialists who can handle various areas. However, as funds grow larger, finance departments become more specialized to meet increasing regulatory demands. Across all fund sizes, there is a steady rise in demand for skilled finance specialists in the private capital sector, offering promising career prospects and attractive earning potential.