The Route to Private Equity CFO: Expert Advice on How to Get There
The Chief Financial Officer (CFO) role is more crucial than ever in contributing to the success of Private Equity backed business. During turbulent times, when financial resources are more stretched and timelines more uncertain, businesses rely on CFOs to provide expertise and leadership.
Naturally, there is no ‘one-size-fits-all’ way to work as a CFO, especially within private equity, but there are several important factors to consider for those looking to step up and lead a business. To take a more detailed look into these requirements, we gathered a panel of industry leaders together to discuss how they transitioned from senior finance leaders to private equity-backed CFOs.
Here are the key learnings from our Route to Private Equity CFO webinar, with commentary from:
Maria Carradice, Managing Director at Mayfair Equity Partners
Phil Symes, CFO at Redington
Brian Southward, CFO at Roboyo
Are there key attributes needed to become a private equity CFO?
Before embarking upon the journey to becoming a private equity-backed CFO, it’s important to go back to the basics: what does it take to succeed in this role? What attributes must you have to hit the ground running? Maria begins the webinar by stressing the importance of being, as she puts it, “a jack-of-all-trades. Depending on the business, you may have to head up the IT, cybersecurity or data protection side of things. You may also have to head up HR or operations functions.” While it can be useful to have previous experience in these areas, what Maria believes is most crucial for the role is that insatiable hunger to learn.
Phil echoes this thinking, with a focus on resilience. “It’s a pressurised job. You have to hit your numbers. That’s key if you want a good relationship with the private equity house. Don’t try and cheat—be transparent. That said, it’s a very rewarding job in terms of the breadth of work you do. And if you want to be the CFO of a commercial business, this is a good way to do it.”
What are the realities of being a private equity CFO?
The role of the CFO has been changing at a rapid rate. As Brian states: “It’s a role that has gone from the back of the office to the front line. This is down to increased expectation from enterprises, as well as accelerating change, a constant pursuit of growth and profits, the volume of data and the need to extract value from it, and greater compliance requirements driven by regulation and consumer expectations. Essentially, today’s CFO needs to be a superhero.”
And while the DNA of being a CFO in any industry is the same, there are key challenges that separate this role from the rest in private equity. In a private equity environment, these challenges are often more heightened and exaggerated than in commercial business. As Brian continues: “It’s all about speed, discipline and focus. But the need to cover ground - often new ground - fast and successfully means that the reality is gripping and the sense of achievement exhilarating.”
For those looking to take on this role, what key advice do our panellists have?
For Brian, though he recognises that everyone’s routes will differ, he believes “you’ve got to be a technical specialist in finance. But what I believe is perhaps even more important is the need to be a leadership figure and have an inquisitive nature—a desire to learn.”
For Maria, a key trait that will inevitably bolster success is when “a CFO is a right-hand-man for the CEO. To do this, you need to understand the commercials of the business and how that business makes money.”
Finally, Phil closes by stressing the importance of references. “As a CFO, you are going to be checked out—and checked out carefully. Therefore, it’s worth thinking about who you are going to give as references and, in particular, whether they are credible to a private equity house. Most of the time, you’ll find you know more people than you thought!”
To explore the route to becoming a private equity CFO in more detail, watch the full webinar discussion here.
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