How to recruit an FP&A leader who’s ready to drive inorganic growth

Private equity portfolios and their sponsors are eyeing dynamic financial planning and analysis (FP&A) hires to focus on both strategic finance and corporate development.

Traditionally, portfolios will hire an individual corporate development leader or team—depending on the organization’s size and inorganic growth strategy. But the right FP&A hire can adopt these responsibilities.

Having an FP&A leader run point on modeling, diligence and acquisition structuring can pose several benefits in a private equity setting. It’s a cost saver, primarily, as strong corporate development talent comes with a large price tag.

Secondly, an FP&A leader’s responsibility is to develop a story around your company’s financials and cascade that message across the organization. Creating this “story” supports internal alignment on your growth strategy but can also help source acquisition targets and explain the state of your business.

If you’re a hiring decision-maker in a private equity-backed business and are considering whether to add an FP&A person who can run point on  M&A opportunities with the right sponsor support, this is our advice:

Find someone who wants to be a CFO

We’ve seen two archetypes for M&A-minded FP&A candidates: current investment bankers at the director-level or former investment bankers currently in a finance role.

No matter which archetype works best for your hiring needs, it’s imperative to find an FP&A leader with CFO ambitions. This ensures they approach finance holistically and are excited to take on additional responsibilities. The right person will seek to break out of their financial silo.

Related: Six things every CFO should know about private equity

Your target candidate should also be someone with a balance of soft and hard skills. Ask yourself: “can you see this person forming relationships with people at all levels of the business and developing rapport?”

Be tactical with your compensation package

Hiring an FP&A leader may be less expensive than hiring a true corporate development leader, but compensation in the finance and accounting landscape is undergoing a transformation.

Before 2020, it was rare to offer any form of equity to finance leaders below the CFO. Today, it’s standard to incorporate some form of equity for FP&A leaders and more common to do the same for controllers, depending on the business size and structure.

Download: 2024 Fall Finance & Accounting Compensation Report

While cash compensation will be lower for an FP&A leader versus a corporate development expert, be prepared to offer a compelling equity package and other long-term incentive if you plan for this hire to support your corporate development initiatives.

The takeaway:

If you’re a hiring decision-maker for a private equity portfolio company weighing the pros and cons of adding an FP&A leader versus a corporate development leader, you’re not alone.

More companies are leveraging their FP&A leaders as corporate development advisors. To successfully expand the scope of this function, find someone who wants to be a future CFO and consider developing a strong equity package to help your offer stand out.

To learn more about FP&A trends we’re seeing, contact Ryan Morgan at (336) 217-9105 or ryan.morgan@charlesaris.com.