Why the CFO is becoming private equity's quarterback

Mike Lo Parrino, EY Americas FSO Private Equity Leader, explores the evolving role of the private equity CFO.

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In the seven years since EY has conducted the Global Private Equity (PE) survey, private equity CFOs have assumed increasing responsibility for the overall operations of their firms.

They have expanded their oversight beyond the traditional finance functions to include IT system implementation, investor relations and cybersecurity, even as the industry has experienced record growth. Now they are expected to take on an even more strategic role, assisting with the decision-making and deployment of new investment products, location strategy and a changing investor profile, while also keeping a mindful eye on increasing margin pressures.

At the same time, private equity CFOs are also leading the effort to find ways to deploy innovative new technologies, particularly those that leverage next-generation data and robotics. As part of their more strategic mindset, they are also helping to elevate their firms’ overall talent profile and interact more frequently with portfolio companies.

The PE CFO’s role has evolved over the past seven years in five key ways:

1. The CFO spends more time than ever on asset growth, innovation and talent.
2. CFOs must strike a balance of tactical and technical skills to be effective, strategic leaders for their entire organization
3. Attracting and retaining diverse talent combined with an inclusive culture are top talent management priorities
4. CFOs consider advanced technology solutions to complement new, strategic responsibilities
5. The next generation CFO will leverage data for the benefit of both the private equity firm and portfolio.

To read the full survey, visit ey.com/privateequity.