Corporate CFOs now better equipped for PE roles

The changed remit of corporate chief financial officers since the financial crisis has aligned their skillset more closely with that of their private equity peers.

Chief financial officers are now better equipped to transition from corporates to the traditionally faster-moving private equity industry as the pace of change in the two sectors is more closely aligned, according to a study by recruiter Bronzegate Executive Search.

Since the economic crisis, there has been an “emphasis on effective transformation at an accelerated pace” within corporates, the report said, to the extent that it now emulates the timeframes seen in private equity.

Traditionally, a corporate might have undertaken change over a five to 10-year period – a considerably longer timeframe than the two to three years expected within a private equity portfolio company, according to the report.

“In the past, the most striking changes of emphasis for a CFO when making the transition from a corporate role to a private equity CFO role were the increased pace of change, managing high levels of debt, and a significantly increased focus on cashflow,” the report said.

But now CFOs across the corporate world are now under real-time pressure to deliver change, it added.

“Corporates have been forced to drive a transformational change agenda to survive and the role of the corporate CFO has become more focused on the critical areas of focus to private equity, such that the transition [into private equity] is somewhat simpler,” it said.

Corporate CFOs are now expected to play a bigger role in reshaping a group, both operationally and in terms of the company’s market positioning.

“This unified approach to change across almost all aspects of an organization is now increasingly aligned to private equity,” the report said.