A CFO's Guide to Private Equity

It may come as a surprise to some of you to learn that the tenure of the average CFO or CEO of a private equity backed company is approximately four years.[1]  This four year billet fits snugly in the three to five year average hold period for a PE portfolio company.  With companies being flipped and top executives being replaced nearly as often as the world watches Olympic curling, it is important to understand the expectations and constraints faced by C-level executives of PE back companies.

A recent CFO.com article shines a light on this subject by stating, “CFOs are used to steering the finance department without much interference, and PE firms may get more involved in day-to-day decisions than a finance chief would expect.”[2]  The focus of this article resonated with Private Equity Primer as we presented on this topic last month at a local chapter of a national CFO group called The Financial Executives Networking Group ("FENG")

PE | PRIMER re-recorded its presentation titled “A CFO’s Guide to Understanding Private Equity” in a three part video series that has been posted on-line for your viewing pleasure.  In total, these videos cover:

  • How the CFO Can Effectively Advise the CEO, Board, & Shareholders in a Capital Raising Process
  • The CFO as Quarterback for the Due Diligence Process—What to Expect
  • Safeguarding the Business Against Private Equity Tricks—How to be Prepared
  • What Private Equity Firms Often Look For in a Portfolio Company CFO

Private Equity Primer encourages you to grab a hot beverage of your choosing, sit back, relax, and learn by viewing the three part video series at: 

To train the best deal attorneys, bankers, consultants, and aspiring students, Private Equity Primer created industry-leading training that leverages repetition to mastery, case study delivery, and real world simulations.  Please check outour full service offerings and subscribe to our email list for the latest on training, transaction knowledge, and the ever changing landscape of legal services, investment banking, and accounting. 

[1] Source: CEO stats come from study referenced by Eileen Applebaum in here article “How Does Private Equity Really Make Money?”  Roosevelt Institute.  June 12, 2012.  http://www.nextnewdeal.net/rediscovering-government/how-does-private-equity-really-make-money.  CFO stats from Advantage Partners (www.advantagepartnersinc.com) March 9, 2015 marketing email stating “…the average tenure of a CFO in a mid-cap private equity-backed company in three years and 11 months.”

[2] Source: “How to be the CFO of a Private Equity Owned Firm.”  CFO.com.  Marielle Segarra.  January 2, 2015.  http://ww2.cfo.com/accounting-tax/2014/01/how-to-be-the-cfo-of-a-private-equity-owned-firm/.