What are the Advantages of CFO Services for Private Equity?

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With optimism on the horizon for private equity dealmakers in 2024, companies everywhere should start considering what they need to do to pave the way for a successful transaction. From reworking operations to implementing cost-saving strategies, there are many potential paths a company can pursue to achieve maximum deal value.

In many cases, private-equity-backed portfolio companies (and their CFOs) simply don’t have the time, resources, or specialized knowledge that is needed to identify the right investment opportunities and rework operations for optimum efficiency – and do so without interrupting their day-to-day functions.

As such, it is often more beneficial in terms of cost, time, and outcome to outsource these transformative solutions to a trusted team of professionals.

As experts in helping private-equity-backed portfolio companies create value, manage risk, and seize opportunities, we’ve outlined some essential information about the advantages of CFO services for PE dealmakers.

What are Private Equity CFO Services?

Private Equity CFO Services involve a range of solutions across finance, accounting, operations, information technology, risk management, mergers and acquisition and IPO readiness support, supply chain management, and many other functional areas of business.

The associated activities are typically conducted alongside a consultant or team of experts who seek to obtain a solid understanding of the company’s unique position, needs, and goals before identifying the solutions that will empower growth and efficiency down the road.

Common types of Private Equity CFO Services:

  • Accounting
  • Working Capital Management
  • Internal & External Reporting
  • Financial Planning & Analysis
  • IT Support & Technology
  • Team Management
  • M&A and/or IPO Support
  • Compliance – Debt, Equity, Audit, Tax, Legal
  • Risk Management
  • Human Resources
  • Legal/General Counsel
  • Supply Chain Management
  • External Audit Support

For information regarding the top traits of today’s leading private equity CFOs, head to our blog: The Ideal Private Equity CFO: Expectations, Traits & Other Considerations.

Advantages and Benefits of CFO Services for Private Equity

Private Equity CFO Services provide unparalleled financial, market, and private equity expertise

With the ever-evolving nature of the private equity space, an ongoing period of increased competition, and the economic uncertainty that plagues the markets of today, PE-backed companies must do everything in their power to stay on top of both current and potential future conditions – and shift their approach to PE dealmaking as needed.

Private equity CFO services provide access to a team of experts with specialized knowledge in financial management, market analysis, and private equity growth strategies that they utilize to help companies capitalize on lucrative investment opportunities, optimize capital structure and portfolio performance, navigate changing market conditions and potential risks, and build a scalable and effective finance function.

Private Equity CFO Services ensure proper usage and implementation of industry-leading technology systems

From identifying processes that are well suited for automation to training users on how to properly utilize a platform, private equity CFO services help ensure the implementation of modern and intuitive technology solutions.

When improperly managed, technological transformations can introduce organizational chaos and unnecessary complexities – even during times when there isn’t a private equity deal on the horizon.

Whether it is better for a company to optimize their current configuration or make the switch to a new system, private equity CFO consultants have the specialized knowledge that is needed to ensure that any technology implementations 1) suit the company’s unique needs and goals, 2) comply with relevant regulations and cybersecurity best practices, and 3) are integrated with limited interruptions to operations.

For more information about CFOs and technology, head to our blog: 4 Reasons Why the Modern CFO Needs to Be Technology Focused.

Private Equity CFO Services enhance operational efficiency and profitability while ensuring a seamless integration

Private equity transaction success requires a hefty focus on proper planning, resource attribution, process rework, and the ability to cut down on costs without sacrificing day-to-day needs – and when dealmakers run into road bumps, a poorly managed integration process is often to blame.

By developing a robust project roadmap that sets the stage for what’s to come and implementing proven best practices for cash flow management, debt compliance, financial reporting, supply chain management, and more, private equity CFO consultants strike a balance between cost-saving strategies and operational realities to help companies ensure a seamless integration.

Private Equity CFO Services help navigate risk and establish compliance

Portfolio companies and PE-backed organizations are often required to adhere to stringent regulatory requirements and standards, which can be incredibly challenging to maneuver without the right expertise.

Utilizing private equity CFO services will ensure the creation of robust controls and governance structures that help companies establish compliance swiftly and effectively – and take a more proactive approach to risk mitigation going forward.

Private Equity CFO Services ensure the creation of a solid exit strategy and establishes strong communication methods with employees, investors, and stakeholders

Oftentimes, portfolio and PE-backed company teams are focused on securing the deal – not what happens afterwards.

Whether it is better for the company to pursue growth via a merger, acquisition, carve-out, or other type of strategic transformation, outsourcing private equity CFO services ensures the development of a solid exit strategy.

In addition, one of the keys to a successful and efficiently executed transaction – and exit – is having established effective methods of communication with employees, investors, and PE stakeholders to keep everyone informed on progress and ensure they have a solid understanding of their main responsibilities throughout the entire course of the deal.

Private equity CFO consultants will work across teams to effectively manage both employee and stakeholder communication, from sharing historical financial information to negotiating deal value.

Final Thoughts on the Advantages of Private Equity CFO Services

While 2024’s private equity market does show signs of optimism, there are many factors that organizations need to consider if they are to achieve deal success.

Oftentimes, it is incredibly helpful to turn to a trusted partner who acts as an extension of your team to identify current and future needs, swiftly integrate the solutions you need most, navigate market changes and competition, and maximize deal value.

About Bridgepoint Consulting

Bridgepoint Consulting, an Addison Group Company, is a leading national consulting firm providing advisory services that help organizations optimize financial operation and technology utilization while mitigating risks. From assistance with strategy, process improvement, technology, or regulatory compliance, our experts create significant connections to bridge resource gaps, allowing companies to sustain and succeed at every stage of their lifecycle.

The firm’s practice areas include: Finance & Accounting Advisory, Risk & Compliance, Private Equity Advisory, and NetSuite consulting. Bridgepoint Consulting is headquartered in Austin with offices in Atlanta, Boston, Dallas, Denver and Houston.

Looking for PE CFO Services?

Whether you need strategic financial solutions, day-to-day operational support, or are simply looking for some guidance to bring your latest transformation to life, our team of private equity experts, financial gurus, and industry-leading CFOs at Bridgepoint Consulting are here to help. By aligning our goals with yours and combining actionable insights with specialized expertise, we alleviate dealmaking complexity at every phase of the journey.

Contact us today or explore how we can partner for growth at the link below.