Conversations with clients are often strikingly different. A private equity firm defines the search profile for the CFO of a portfolio company. The investment is heading for exit soon. But the client definitely doesn’t want a “seller”. “Storytelling, roadshow, the sale itself: we’ll handle all that,” the client says. “What we need is a CFO with outstanding industry knowledge!” That’s quite unusual. In general, CFOs with specific industry knowledge are particularly important in only a few sectors, including:
· Construction (planning, controlling and cash flow in project billing and partial completion, including claims management).
· Food, fashion and fast-moving consumer goods (where the top CFO skills are hands-on or theoretical supply chain know-how and an understanding of how fast-changing trends hit inventory and working capital).
· Commodity producers and traders (where the quality of hedging often matters more than operational excellence).
In Germany, private equity isn’t particularly heavily invested directly in any of these sectors. So why are PE firms increasingly focusing on functional skills beyond accounting, controlling and cash flow, even for assets that are performing well in their industry? We see private equity preparing for refinancing. That means CFOs above all need broader functional skills: managing leveraged buy-outs, private debt, alternative forms of financing and so on.
