If you are a UK based Finance Director aspiring to become a CFO (Chief Financial Officer) then this article is for you. We are a niche CFO recruitment boutique based in London and work all the time with PE houses and VC funds.
The Importance of Private Equity
The UK has a very well-developed market for investors, and private equity funds play an important part, they invest in growth companies, financing buyout and buy ins and lending where banks criteria do not fit. Often as a condition of investing or lending the senior team, in particular the C-Suite executives need to be right, have the correct industry experience and cultural fit.
Often FD’s who were in place when a business was a lot smaller don’t turn out to be suitable once a business has grown, and PE houses prefer to deal with FD’s or CFO’s who are familiar with PE houses and their ways of working.
So, cultivating a relationship with PE houses works to your advantage in several ways: –
- If your business needs to raise Equity funding, then you have contacts to explore the options with.
- If PE houses target a company for investment, and they determine it needs a new CFO, and you have a connection with them, and relevant industry experience, then you will be on their radar as a potential CFO candidate.
- The PE houses are themselves a network and you can get introductions from one house to another.
How to get connected?
LinkedIn is a great way to make contacts, reach out to PE investment directors a few per day, then if they accept you as a connection, make contact and ask to have a coffee. That way you can make a pitch in relaxed atmosphere and if they have an opportunity then you are known to them.
A good rule of thumb is that you need around 1,000 connections in firms to be able to expect a stream of opportunities. Investment Directors tend to be very protective of their own projects, so having multiple contacts within the same Private Equity House is often the best way to get access to as many investment opportunities as possible.
How likely are you to get offered an opportunity?
PE houses have large amounts of funds under management but not usually many investments are actively seeking executives at any one time. So, you may find an opportunity comes along once every two years or so.
If you cultivate many different PE houses at once, then the chances are at any one time at least one or more are looking for external CFO’s who are available and can be brought in to support a deal.
This market is not a place where opportunities come along instantly, often it can take six months or more before a deal reaches the point where a CFO is needed, so discussion and events can move more slowly than you may be used to with the more traditional agency routes.
What about Agencies?
Most of the major brands are not focussed onto the Private Equity market, but niche recruitment companies are. FD Capital Recruitment for example are a leading London based firm who are specialists in Technology Companies, backed by PE houses and Venture Capital funds, so if you are looking to get into the PE space then reach out to their team.
Likewise, if you are a business seeking a new CFO with existing PE House relationships, then FD Capital Recruitment are an ideal place to start as they are focused onto this niche in the market.