The Chief Financial Officer (CFO) plays a critical role in orchestrating the financial strategy of the company. With massive amounts of capital stockpiled by private equity (PE) firms and ready to be deployed, the demand for good CFOs will remain strong, though the role and tenure of CFOs paints a stark contrast.
In the dynamic landscape of private equity, the role of a portfolio company CFO has evolved significantly beyond finance and accounting. The CFO needs to be well-versed in operations, complex financing structures with significant leverage, mergers and acquisitions (M&A), systems and system automation, and data, while possessing a leadership presence and serving as a strategic advisor to the Board of Directors (BOD), management team, and shareholders.
CFOs at public companies are typically the shortest-tenured executives, staying in the role for approximately 3.5 years while other executive-level positions are 4-5 years. In private equity, the average tenure is much lower, averaging 12-24 months. According to Datarails1, the CFO turnover rate in 2021 was 21%. The minute CFOs get hired, the clock starts ticking, and the timeline to implement widespread value-added change is narrow. That is where Ankura can help.
Ankura works with many PE firms across multiple industries, and our Ankura OCFO® practice offers a wide range of solutions including interim management, financial planning and analysis (FP&A), accounting support/remediation, treasury, finance technology, and cost optimization to meet the needs of any complex situation. We are focused on helping PE firms and their portfolio companies to navigate challenges and create scalable and profitable platforms for growth. For more information on the Ankura OCFO® practice reach out to one of our experts.
1. https://www.cfo.com/news/cfo-turnover-rate-reaches-a-5-year-high-weekly-stat/654765/
© Copyright 2024. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.
