Tom Birch, Senior Partner at Bronzegate, provides an overview of private equity market expectations for the second half of 2024 and the impact on the CFO and finance leader talent market.

Many of our clients are optimistic about the UK and European private equity market for the remainder of 2024. Bain & Company confirms that 46% of assets have been held for four years or more, indicating that many private equity firms are seeking exit opportunities and we shall see a modest recovery in exits. PitchBook also anticipates an increase in deal deployments in the second half of the year as macroeconomic conditions improve.

This positivity is already influencing the CFO and finance leader talent market. In 2022, 80% of our placements were new deal hires, compared to 75% replacements in 2023. In 2024, we are observing a more balanced split between new hires and replacements and the interim market is also incredibly active.

Large cap slowly starting to recover

The large cap sector is showing signs of revival, with private equity firms becoming less apprehensive about increased borrowing costs and constrained leverage. Firms have re-engaged in high-value transactions, with five deals exceeding €1 billion in enterprise value (EV) in Q1 2024*.

The mid-market continues to be resilient

Whilst there are still gaps between seller expectations on price and what buyers are prepared to pay, the mid-market has proven more likely for buyers and sellers to find common ground on deals. The mid-market has therefore shown some real resilience as it accounted for the majority of the deal activity across the market.

Fundraising off to a strong start in H1

European private equity fundraising has had a very strong first half of the year, with capital raised tracking 42.2% higher than in 2023 if the current run rate continues. This robust fundraising has been supported by Large Cap funds from firms like EQT, Cinven, and Apax, injecting additional dry powder and demonstrating a strong appetite for M&A.

Impact on talent: CFO market remains competitive

With the market showing green shoots of new deal activity, this is resulting in a buoyant talent market with an uptick in the hiring of private equity CFOs for new deals. The PE CFO market remains highly competitive, with many CFOs actively seeking new opportunities after remaining in deals for longer than expected. As exceptional CFOs become available, we are finding that they are quickly inundated with offers and private equity firms risk missing out on top talent by not acting decisively.

We are working closely with our clients to act swiftly, maintain momentum in the hiring process, and ensure robust processes are in place to present the right incentives to candidates quickly. The current landscape shows that if firms do not secure top talent promptly, their competitors will.

Tom Birch, Partner, specialises in Private Equity CFO and Finance Leader appointments

*Pitchbook 2024

*PwC 2024 M&A Outlook Report