Many chief financial officers (CFOs) who have improved the economic environments of privately run and publicly traded companies have aspirations of entering the private equity industry. This is particularly true given the fact that many of these CFOs are eager to take the crown of multi-year expansion plans and new wave strategies. In point of fact, there are very few jobs that provide Chief Financial Officers with the same opportunity to alter an organization and position it for success as being the CFO of a private equity company.
However, it can be challenging for chief financial officers to make the change from privately owned and publicly traded corporations to private equity firms. The challenges that a chief financial officer faces in the private equity industry tend to be specifically demanding: loaned capital typically means larger risks, chief financial officers frequently have less time to reach target results, and investors frequently subject them to close scrutiny. In addition to this, certain venture capital firms demand regular briefings from the CFO so that other members of the managerial team can also play important roles in determining the company’s financial direction.
However, a venture capital CFO is often relatively new to their firm which means that they are highly improbable to have social ties in the C-suite group or heritage within the company to support them. This is because investment firms tend to be smaller than other businesses. These CFOs require a powerful team in place before they can move forward with ideas and initiatives that are revolutionary and forward-thinking.
In light of these obstacles, Gary McGaghey, Business CFO of Williams Lea Tag, an end-to-end advertising production services group with revenues of €1.3 billion, presents four tactics that will help CFOs thrive in private equity organizations. McGaghey stresses the importance of the CFO being able to catch up with the finance at play, establish a stronger level of transparency for financial decision making, recognize talent gaps in clubs, and contribute with transition in mind in order to make it much simpler to address the challenges that are associated with private equity. Website: https://www.garymcgaghey.co.uk/