SURVEY: Just 4% of Private Equity-Backed CFOs Keep Inherited Teams ‘As-Is’

New PE-backed CFOs often find inherited teams lack the expertise and horsepower to maximize return on investment.

That was among the key findings in a recent Vardis survey of over 1,250 North American private equity portfolio company CFOs.

• Only 4% of PE-backed CFO respondents report keeping their inherited teams “as-is.”
• 47% of respondents report “quickly” making changes to their team after being hired.
• 76% of respondents report changes to their FP&A teams, while 74% report changes in Financial Control. Other concentrations of change include the Financial IT (48%) and Treasury (41%) functions.
• When asked where they are most likely to invest during the coming 12 months, 60% of respondents indicated FP&A while 54% named Financial IT.
• 33% of respondents reported annual revenues below $100 million and 26% reported revenues between $101-$250 million.

Operational improvement has become the dominant lever of LBO value creation amidst soaring transaction multiples and intense competition for deals.

PE-backed CFOs must act decisively on issues of human capital to position themselves for a profitable exit. Talent-deficient teams often monopolize a CFO’s time and fumble execution of their agenda.

Team building skills are especially vital in the lower-middle market where deals tend to focus on founder- or family-led companies with small or stagnant finance teams and less-than-robust processes.

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