CFO Q&A: Erie Street’s Matthew Hallgren on starting as CFO amid covid-19

Private Funds CFO caught up with Chicago-based private equity advisory firm Erie Street’s new CFO Matt Hallgren to hear about some of the specifics of his onboarding process, and what to prioritize when joining a new firm in the midst of a crisis.

What did your onboarding process look like, given you started some 10 days after Illinois issued its stay-at-home order?

I had the benefit of spending time with the team and getting to know everyone through the interview process in January and February. When I decided that this was the move I was going to make, I had a bit of a transition period in my old CFO position. That said, I had a start date of March 30 – right in the midst of all this. So I started my new role as CFO in the virtual environment, but I did participate in a budget review meeting with the entire team for a day in early March. So I wasn’t necessarily starting and meeting all of the new faces for the first time over Zoom, but I will say, officially starting the job from home has definitely been an interesting experience.

What are your initial priorities as you settle in?

What I’ve been focused on my first couple of weeks is the liquidity positions, both internally at Erie Street and at Performance Improvement Partners, a company we recently acquired as the tech advisory arm of our business – making sure we’re laser focused on daily cash flows, what it means for our receivables, what’s happening with our respective client base that potentially could have a direct impact on our liquidity, as well as for projects that were in the works or in the pipeline for future revenue streams.

I think it is a critical time for companies – especially those owned by PE firms – to have an ownership structure that’s very hands-on to help them navigate through today’s very uncharted waters.

What are some of the steps you took to protect the business right away?

Right away, I just jumped into the details to make sure the right controls were in place around the buffers for liquidity, and we immediately implemented a heightened of review on cashflow. For example, vendor payments historically pop up in the system, notifying you that that someone’s invoice is due or there’s an action item. We implemented additional levels of review to better understand when payments were due, or when there was a necessary step to take to receive payment. Most of the tools we need to monitor receivables were already in place, but now we just have a heightened level of awareness around it.

Sometimes when things are good and business is humming along, you’re not as detail-focused. You have long-standing relationships with clients whose businesses are pretty stable, and you rely on that relationship a lot. When the world gets turned upside down like it has, you really have to assess your business, and see how the situation is impacting your clients, which leads you to find potential exposures and risks that otherwise typically wouldn’t exist.

It’s really all about building a much greater level of discipline around information flow, so that everyone has a full picture of what’s going on.