Private equity firms across the UK and EMEA are finding that competition for Chief Financial Officers has reached a fever pitch. As a London-based recruitment agency, Cedar has witnessed first-hand how a perfect storm of factors has led to a talent drought for permanent CFOs in PE-backed businesses. The role of the CFO in a portfolio company is more pivotal than ever, yet finding (and keeping) the right finance leader is proving harder than at any time in recent memory. In this article, we draw on Cedar’s experience to explore current hiring trends, the forces behind the shortage, and what forward-thinking PE firms are doing in 2025 to win over top CFO talent.
The High-Stakes Hunt for CFO Talent
Demand for permanent CFOs in PE is soaring, but supply is scarce. As firms focus on value creation, turnover is high. Many portfolio companies cycle through two CFOs per hold. With tenures averaging just 2.5 years and 80% of hires made externally, few businesses can rely on internal succession.
Most mid-market firms lack a strong finance bench, and top candidates are either locked into exits or opting for interim work. Hiring a permanent CFO has become a high-stakes race. Delay, and you’ll likely lose them.
What’s Driving the CFO Talent Shortage?
The CFO shortage in PE-backed businesses is the result of several converging pressures:
- Deal Volume & Exit Churn: Record deal activity in recent years flooded the market with portfolio companies needing CFOs. With exits expected to surge in 2025, many current CFOs will cash out and move on, just as new acquisitions require experienced hands. The result: more vacancies than the market can fill.
- Sector Narrowness: Many PE firms demand sector-specific CFO experience, especially in hot areas like tech, which shrinks the pool unnecessarily. In reality, strong CFOs often transition well across industries, but rigid criteria continue to fuel the squeeze.
- Succession & Experience Gaps: With few internal successors and a strong preference for prior CFOs, firms end up recycling the same candidates. Many emerging leaders are overlooked, while seasoned CFOs are either retiring or shifting to portfolio careers.
- Post-COVID Role Shifts: Hybrid work is the norm, yet some firms still limit geography or expect in-office presence. Meanwhile, the CFO role has evolved, blending strategy, tech, and transformation. The bar is higher, and fewer candidates meet it all.
Together, these forces have made permanent CFO hiring fiercely competitive. Next, we explore how compensation and incentives are evolving to keep pace.
The Compensation Conundrum: Equity vs. Cash
In a tight market, money talks but it’s not just about equity anymore.
CFO pay in PE-backed companies has surged, with base salaries, bonuses, and equity all climbing as firms compete for scarce talent. On average PE CFOs earn around 40% more in base pay than their industry peers, reflecting both the demands of the role and fierce competition.
But not every CFO is chasing the big exit. Many now push for higher guaranteed cash to offset risk, especially where hold periods may stretch. As a result, FTSE-level cash packages are becoming common, even in mid-market roles.
Equity still matters but firms are getting smarter with structure. Accelerated vesting, partial liquidity events, and co-investment opportunities are increasingly used to tip the scales. That said, overloading on equity risk can deter talent, particularly first-timers.
The sweet spot in 2025 is a balanced, compelling package. Even up-and-coming CFOs are commanding serious pay and PE firms need to keep pace or lose out.
Location, Location: Talent Markets from London to the Nordics
Geography still matters, but flexibility now defines the talent edge.
London remains the UK’s CFO hotspot, with the deepest talent pool and the fiercest competition. But post-pandemic, regional markets like Manchester and Leeds have seen a sharp rise in CFO placements, helped by remote work and firms paying London-level salaries nationwide. The result? Candidates no longer need to uproot for top roles and firms casting wider nets are reaping the benefits.
Still, not all regions are equal. Smaller UK hubs often lack PE-experienced CFOs, and insisting on full-time, on-site presence in hard-to-reach locations can drag out searches. A bit of flexibility, such as hybrid working and weekly travel support, can unlock top talent without relocation friction.
Across EMEA, the challenge intensifies. Countries like Denmark or Austria may have only a handful of CFOs with relevant PE experience. Cultural fit, language, and tax treatment also complicate cross-border hiring. Yet top CFOs are increasingly mobile, many with international track records and a pan-European mindset.
The firms winning the talent race are those that stay flexible on location and creative on structure. Those that don’t are being left behind.
Strategies for Securing Top CFOs in 2025
Winning permanent CFO talent in today’s market takes more than just a strong offer, it requires strategy. Cedar sees top-performing PE firms deploying five key plays:
- Offer Flexibility: Hybrid or remote arrangements widen the talent pool and are now expected. With nearly 70% of PE CFOs working flexibly, firms insisting on full-time, on-site roles risk losing top candidates.
- Rethink Equity: Stretching timelines mean CFOs want certainty. Accelerated vesting, early performance bonuses, and secondary liquidity events are helping firms make equity packages more compelling, alongside market-leading cash.
- Plan Succession: Develop strong #2s and future CFOs internally. Equity incentives, mentoring, and clear progression make your team more attractive and reduce reliance on external hires over time.
- Focus on Retention: Securing a great CFO is only half the battle. Retention tools, such as staggered vesting, bonus pools, future role pathways and proper support (from workload to culture), can keep your CFO through the full cycle and beyond.
- Move Fast and Sell Hard: In a competitive market, speed matters. Keep interview processes tight, offers decisive, and be prepared to sell the role. Candidates are judging you as much as you are them.
Get these right, and you’re ahead of the pack. But as we’ll explore next, many firms are still losing ground through outdated approaches.
Pitfalls to Avoid in CFO Hiring
Even experienced firms can trip over outdated hiring habits. Cedar sees four common pitfalls that undermine CFO searches:
- Dragging Your Feet: Slow processes kill deals. Gaps, indecision, or chasing a “perfect” unicorn often result in losing strong candidates to faster-moving firms.
- Rigid Criteria: Demanding exact sector matches, prior PE CFO experience, or relocation from day one drastically shrinks the pool. Stay flexible on profile and distinguish must-haves from nice-to-haves.
- Misjudging Compensation: Underbidding or misaligning cash and equity risks losing talent. Some want certainty, others seek upside. Know your candidate’s motivations and tailor accordingly.
- Neglecting Culture and Onboarding: Top CFOs assess you too. Be transparent about your culture, and make sure onboarding is structured. Dropping them in cold is a fast track to failure.
Avoid these traps, and your firm is far more likely to land, and keep, the CFOs that drive real value.
Closing Thoughts
The firms winning in 2025 are those embracing flexibility, rethinking incentives, and treating hiring as a two-way process. They’re also building future leaders, not just buying them in.
In a capital-rich world, talent is the real edge, and a great CFO can be the difference between a solid return and a standout exit. Get your approach right, and you won’t just fill a role, you’ll attract leaders who stick, scale, and deliver.
If you’re rethinking your finance leadership strategy or want insight into what’s working in today’s market, get in touch. Cedar partners with private equity firms across the UK and EMEA to secure CFO talent that drives value from day one.
