The role of the private equity-backed CFO has never been more demanding.
Sponsors’ escalating appetite for data has led to increasingly strenuous reporting demands. Proliferation of the buy-and-build strategy has made integration expertise a common prerequisite for the role. Challenges facing modern IT and HR departments, which often fall under the CFO’s purview, continue to grow more complex. And while modern finance chiefs must be well-versed in accounting and finance, they also need the strategic savvy to act as a true partner to the CEO.
Among their many responsibilities, what do sponsors consider a PE-backed CFO’s most critical contribution to value creation?
A recent survey from Deloitte sought to answer that question by quizzing both PE professionals and portfolio company CFOs on the most effective ways CFOs can “drive improved operational performance in (a) business.”
- 94% of fund respondents chose “delivering valuable (management information) which can be used by the broader business.” Meanwhile, only 59% of portfolio company CFO respondents chose that option.
- 56% of portfolio company CFOs selected being a “strategist” who acts to “challenge/partner (with the) CEO,” while just 41% of PE fund respondents chose that option.
The results indicate sponsors believe a CFO’s contributions to strategic and operational decision-making should come via (or in concert with) a clarifying set of facts.
The lack of alignment in responses may help explain why 41% of surveyed PE fund respondents believe portfolio company CFOs “only partly” understand their role in driving value.
High-impact CFOs often embrace their role as ...