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The Role of the Private Equity-Backed CFO

08/02/17

With great leverage comes great responsibility: the role of the Chief Financial Officer in a private equity-backed business is demanding. The nature of highly leveraged environments, especially when supported by institutional funds, places a great deal of scrutiny on the CFO.

It is increasingly likely that as a CFO in a private equity-backed business, you will have been brought in by the investors, often with a specific remit such as adding growth, leading a turnaround, making acquisitions, or preparing the company for sale. You may be required to work with limited resources and at a relentless pace, making continuous improvements towards long term objectives and ensuring the finance function supports the growth of the business. 
The first and foremost responsibility for a CFO, as number one within the finance function, is the reporting of accurate numbers. The implementation and accuracy of systems, processes, and controls is crucial, and is the first requirement of investors. You will also be expected to leverage this knowledge to help make commercial decisions in the business.

Given the multiple stakeholders involved, the ability to communicate performance, plans, and objectives is paramount – private equity investors rely on their CFOs to give them a clear picture of what’s going on inside the business. Of course, you will also be expected to work closely with your partners inside the company, and may have responsibility for banking relationships. 

Ultimately, the responsibilities of a private equity-backed CFO make for engaging roles. You will be given a high degree of autonomy, work with a broad range of people and businesses, and partner closely with the CEO and investors to tackle dynamic challenges. You will have a clear plan in place, and be a key part of the team working towards it. If you are willing to pair determination with a long term view towards remuneration, taking on a CFO role in a private equity backed company can be deeply rewarding, both professionally and financially.  

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