A little help from your friends: Top takeaways from the Fall Roundup

Private equity execs at PEI’s CFOs & COOs Fall Roundup took advantage of being surrounded by peers to discuss the evolution of the CFO position, fundraising trends and implementing the right ESG program.

It’s more important than ever for CFOs and COOs to be able to share practices and advice with each other, as the roles’ remits expand and pressing issues needing resolution enumerate. That was the sentiment that seemed to dominate PEI’s CFOs & COOs Fall Roundup in San Francisco on November 17.

“The CFO’s role has gotten broader, I think, to include things like investor relations, ESG and fundraising. And since we’re learning more about the functionality of the firm, it’s great to be able to reach out to my peers to see how finance is supporting various operations and managing risks,” one CFO said.

“We all have our own network of people we can call to ask about different things but it’s just incredibly helpful to get in front of such a diverse group of my peers to see how everyone is tackling different issues because maybe someone has come up with a solution to something that would be really helpful to my firm, too,” added the vice president of finance at a software-focused shop.

Here are some of our takeaways from 2022’s Fall Roundup.

‘No one wants to be the outlier’

As Private Funds CFO reported earlier, few things have thrown CFOs for a loop more than having to calculate net performance in compliance with the SEC’s new Marketing Rule in the absence of any guidance from regulator.

During the event, several CFOs said they do not expect immediate enforcement actions relating to violations of the rule, but that it was important to get others’ perspectives and understand different approaches to see if their own interpretations and practices were similar.

“We really spent a lot of time thinking about how our practices fit under the new rule and talking to other firms to see how they’re doing things just to be sure the way we’re doing things isn’t so wildly out of the ordinary. Even now, I still want to talk to other firms about how they’re doing things like calculating net [performance] to get a better idea of where our practices fit within the industry, because no one wants to be the outlier and the first firm subject to enforcement under the new rule,” the vice president of finance explained.

CFOs become critical to the fundraising process…

As CFOs become more and more involved in the fundraising process, investors want access to them earlier on in the due diligence process, since CFOs have the best visibility and familiarity with the firm’s portfolio.

The CFO of a private markets investment firm noted that the chief finance role was traditionally only involved later in the fundraising process, in meetings with investors to discuss the firm’s economics and operational issues.

But investors now want to better understand the firm’s back office operations and its “financial matrix,” the VP of finance of a venture capital firm noted.

“Investors want a lot more data about the firm, and just want a better understanding of the kind of operation you run, and that’s something the CFO or other finance exec can provide, so they’re getting involved in the fundraising process at a much earlier stage than they may have in the past,” the VP of finance added.

…as fundraising takes longer 

CFOs are only more critical to the process as fundraising cycles get longer.

The venture capital VP of finance said her firm has been fundraising for the past two years on its latest fund, much longer than they thought they would be.

“LPs are putting off allocations for longer, seeing how their portfolios look and where they need to make adjustments, so even though they want to invest with you, they may need to take some other actions before actually being able to commit capital. So, instead of three months, it may take nine months or longer,” one CFO said.

To help deal with longer fundraising timelines and to try to reach new potential investors, particularly family offices, more private equity firms are turning to placement agents to make introductions.

“We’re working with a placement agent to try to facilitate relationships with these investors because it’s so hard to get in front of them otherwise,” the CFO of a venture capital firm noted. “Without a pre-existing relationship or a warm introduction to these people who might be interested investing in your firm, you may not have much success reaching them on your own.”


ESG is the latest issue being added to the CFO’s already full plate. So it’s all the more important for CFOs to stress to investors that they must be clear about what they want from the firm in terms of transparency.

CFOs identify the value creation opportunities in any sustainability strategy, assist in setting ESG goals and help establish performance metrics and processes to track and report progress. CFOs are also building controls around data on companies’ measurements of ESG factors.

And they’re managing increasing LP appetite for data around their ESG and diversity, equity and inclusion initiatives.

The head of growth for a private equity firm said GPs are willing to provide the data investors need on DEI and ESG so long as the investor can articulate what exactly is needed and why.

“We’ve created a very transparent process to say here’s the data we collect, and here’s what it includes and what it doesn’t include. We explain to investors what we’re comfortable with collecting and we’re very transparent about any gaps in our data collection.”

When it comes to quantifying ESG data, firms are trying to decide whether to build out systems in-house to capture the data or to work with a service provider to do it.

The head of ESG at a start-up private equity firm said her firm is working with a service provider to track ESG data.

“We were able to get a software-based solution to put everything online, so there is no opening Excel files and trying to self-calculate all of the data,” she explained. “It’s all warehoused under the same platform and very accessible, to us and our investors, and we thought that was the best approach.”

Institutionalizing ESG

As ESG has become more operationally important to firms, more private equity managers are creating ESG committees or advisory boards to help meet any regulatory reporting requirements, handle investor data requests and evaluate portfolio companies and potential investment opportunities.

“We have a large ESG committee that spans associates and the co-head of private equity. All together, there are 15 members. And I think that’s important to be able to understand the acronyms in ESG, what’s going on with investors, what regulators are looking for and take that to their respective teams to come up with appropriate strategies,” noted a PE managing director, general counsel and CCO.

The head of growth for a PE firm agreed that forming an ESG committee is one of the easiest things a PE firm can do during its ESG “journey.”

“I think this is an important step to build your ESG program and become more institutionalized,” the head of ESG added.