The private equity market is sitting in an extremely interesting position as the first quarter of 2025 draws to a close. Over the previous year, private equity participation was limited due to high debt costs, but 2025 is seeing rising private equity deal and exit activity particularly in global mergers and acquisitions (M&A). Happening alongside this is increased regulatory scrutiny on private market valuations and a growing emphasis on sustainable private equity investing. Private equity has not been immune to technological trends – including artificial intelligence (AI) and automation – and wider political instability either. More recent developments, such as the UK government’s reversal on tax hikes for private equity firms, mean that the year could prove to be a strategically profitable one for those companies that can take a firm hold on the private equity industry trends shaping the market.
As the industry adapts to these trends, investors and senior executives looking to attract talent want new skills from their corporate leadership teams. There will be an increasing demand for leaders with the financial acumen, strategic foresight and technical expertise to take firms forward into continued growth and success. Private equity firms looking for leadership with these capabilities will need to re-evaluate their hiring if they wish to take full advantage.
With that in mind, let’s look at the biggest private equity industry trends of 2025, and how they’ll affect recruitment strategies in the years ahead.
Regulatory Changes and Crisis-Resilient Leadership
The Financial Conduct Authority’s recent focus on private market valuations has underscored the need for transparency and robust governance within private equity firms. Such heightened regulatory environments demand leaders who are not only able to navigate complex financial landscapes but also committed to upholding stringent compliance standards.
Alongside this, the unpredictability of global markets requires leaders who can successfully navigate economic downturns, supply chain disruptions, and geopolitical instability. Private equity firms will be looking for executives who can remain agile, make data-driven decisions, and execute rapid pivots when necessary.
Implications for Hiring:
- Firms will be looking for CTOs and CFOs capable of leading adaptive technology initiatives to improve resilience against cyber threats and digital disruptions.
- Leadership candidates must demonstrate expertise in regulatory compliance and transparent financial reporting.
- There will be increased competition for those skilled in navigating evolving regulatory frameworks.
- Other key skills in-demand will include financial stress testing, scenario planning, and liquidity management and agile operational strategies that ensure business continuity.
The Impact of Technology
The adoption of AI and automation across private equity-backed businesses is changing the required skill sets for leadership roles. Gone are the days when financial expertise alone defined a successful PE executive. Today’s leaders must be capable of understanding and using AI-driven insights, predictive analytics, and automation tools for decision-making and operational efficiencies.
CTOS are now required to head digital transformation initiatives, keeping their organisations competitive. CFOs are often budget holders for tech investments, making decisions on when is the right time to invest and the likely returns. The result of successful digital transformation is to provide finance and operations executives with more real time data and reporting, helping them make better decisions. To take advantage, investors and senior executives must prioritise candidates with strong technological acumen and the ability to lead digital transformations.
Implications for Hiring:
- CFOs and finance leaders must be comfortable integrating AI-powered financial forecasting and risk assessment models.
- CTOs must drive digital transformation, ensuring technology investments align with business strategy.
- COOs must develop automation strategies that streamline operations and reduce costs.
- CTO candidates who can implement AI solutions and oversee digital overhauls will be sought after.
- Expertise will be needed to align operational strategies with technological advancements to drive efficiency.
Environmental, Social, and Governance (ESG) and Sustainable Investing Priorities
Perhaps the most consistent private equity industry trend over the last few years is ESG and sustainability. Regulators, and stakeholders are demanding greater accountability and sustainable business practices and ESG has been a priority for investors for some time now. While political shifts in the US may create some short-term uncertainty around ESG strategies, momentum in the UK and Europe remains strong, with these regions driving global progress through green financial instruments and investor incentives.
Leaders are expected to show how they plan to integrate sustainable practices into business strategies, balancing profitability with social responsibility. Private equity firms looking to showcase their ESG credentials must look for leadership candidates who have proven they can embed sustainability into the business model while maintaining profitability and growth.
Implications for Hiring:
- Leadership roles will be more focused on embedding ESG principles into corporate strategies.
- Executives must exhibit a commitment to ethical practices and sustainable growth.
- CFOs must be able to build ESG metrics into financial reporting and investment strategies.
- Leadership teams should be diverse, inclusive and committed to ESG.
- There will be a greater focus on the implementation of sustainable supply chain and operational strategies.
Shift Towards Operational Value Creation
Firms can no longer rely solely on financial engineering to drive returns. Market conditions demand a more hands-on approach focused on cost optimisation, digital transformation and workforce efficiencies. Resilient and scalable portfolio companies are much more attractive to investors and operational improvements are now the primary lever for value creation in private equity to maximise returns and provide long-term sustainability.
This demands a new breed of leadership with deep industry expertise, strategic vision, and change management skills. A recent report by Deloitte found that a one third of private equity investors and senior stakeholders believe that the positive impact of the CFO could be as high as 20% of the value realised on exit. CEOs are even more optimistic, nearly half believed the uplift provider by exceptional executives was higher than 20%.
Implications for Hiring:
- Leaders will be valued for their ability to streamline processes and enhance operational performance.
- Preferred candidates will have a track record of successful business transformations and operational turnarounds.
- Leaders must be hands-on and have expertise in implementing cost-saving initiatives, improving efficiency, and optimising supply chains.
- Industry-specific experience is becoming more critical, with firms seeking leaders who can navigate complex sector challenges.
A More Competitive Talent Landscape
The noted resurgence in private equity deal activity has intensified competition for seasoned executives. With a limited pool of experienced executives who possess the right mix of financial, strategic, and technological expertise, firms are exploring innovative strategies to attract and retain top talent in a crowded marketplace.
Implications for Hiring:
- Firms will need to offer competitive salaries, performance-based incentives and enhanced compensation packages to attract the highest calibre talent.
- Skills based hiring is a new way of assessing capabilities allowing firms to look beyond traditional credentials and focus on the expertise and competencies required for success in a specific role and identify candidates who can drive value from day one.
- Private equity firms must build strong employer brands to differentiate themselves as employers of choice.
- Building networks and communities of PE professionals gives firms useful connections and opportunities to share knowledge. As a PE specialist, we play a key role in creating opportunities for engagement and supporting firms in identifying and securing the best candidates.
- A focus on leadership development and succession planning will be essential for long-term talent retention.
Adapting to the Future of Private Equity Leadership
What these private equity industry trends make clear is that firms need a specialist recruitment partner who understands the market and can deliver the right leadership talent—both permanent and interim—to drive value creation.
Securing leaders with the right mix of financial acumen, strategic vision, and operational expertise is more challenging than ever. Cedar’s deep industry knowledge, extensive network, and bespoke recruitment solutions ensure firms have access to the best leadership talent tailored to their specific needs.
Whether you need a transformational interim leader to execute a critical initiative or a long-term executive to drive sustained growth, partnering with Cedar guarantees speed, precision, and expertise in leadership hiring.
Contact our experts today to find out how we can help you attract and retain the leadership talent essential for success this year and beyond.