CFOs of private equity-backed companies feel the heat

A survey revealed the vast majority of CFOs working for private-equity portfolio companies are worried about their job security, The Wall Street Journal reported Nov. 27. 

The report cited a recent Accordion survey of 200 finance chiefs and private-equity sponsors that found that 91% of CFOs worry about their jobs following a private equity investment in their employer. That's up from 87% in 2021 and 66% in 2019. 

More private equity firms are looking for CFOs that can identify and implement strategic initiatives to drive growth in addition to performing more traditional reporting and finance tasks, according to the report. But firms and CFOs don't always see eye-to-eye on where to focus their time and energy to meet these goals. Accordion's survey found that only 24% of CFOs cited acquisitions as a key focus, compared with 43% of private equity executives. Forty-five percent of CFOs cited cost reductions as a key focus, compared with 28% of private equity executives. 

Regular communication between portfolio company CFOs and private equity executives is more important than ever to align business goals, said Henry Neely, CFO of Specialty1, a network of dental surgery practices backed by private markets firm VSS.  

Mr. Neely told the Journal that communication, especially early on, needs to be happening every couple of weeks — just a 30-minute or hour-long phone call is enough to form a successful relationship, he said. Aaron Miller, a partner at private equity firm Apollo Global Management, added that the biggest mistake CFOs can make is sharing bad news late or not at all.  

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