Private equity CFOs – who now wear multiple hats outside their normal accounting and finance functions – are developing stronger leadership skills to successfully juggle the various work demands, delegates heard at the EVCA CFO Forum in Brussels this week.
Discussing the future role of the private equity CFO, the panel said the gig requires strong management skills and a greater sense of responsibility for the overall success of the firm.
Increasingly this means CFOs delegating work to in-house specialists, or third party service providers, to free their time for more demanding tasks, said at the forum Marc Rappoport.
At the forum, Frog Capital CFO Rob Shaw added that CFOs are increasingly embracing this firm-wide leadership role, rather than just being a master of the back-office. “Do we all have to be accountants? Clearly not,” he said.
Recent research into the private equity CFO role (conducted by PEI and EY) reveals them shifting their focus away from “tactical” functions like tax and valuation to more “strategic” functions like investor relations and portfolio analytics.
Currently 16 percent of CFOs name tax as one of the most important “tactical functions” of the job, but over the next two years only 10 percent of CFOs expect that to remain the same. Similar drops in valuation (from 10 percent to 7 percent) and treasury (from 9 percent to 6 percent) were expected in the next two years. Only fund accounting was a tactical function expected to increase in importance.
The results do not mean traditional finance functions were no longer vital to firms’ success, but indicated that CFOs have recognized the need to “free up their resources so greater focus could be given to the more strategic priorities,” Scott Zimmerman, EY private equity assurance leader for Americas, and one of the study’s lead authors, said in reaction to the research results.