A mid-market private equity investor recently claimed, at a dinner hosted by Real Deals, that the best way to find out if an FD is up to the job is to throw three balls at them. If they catch at least two, they can stay. At least for the time being.
Because while there is no doubting the attraction of private equity-backed status for a finance director – an unparalleled focus on growth, discipline, autonomy and above all, of course, the potential for serious financial reward – there are also serious challenges. Not least, the urgency of working with debt. Private equity firms are also notoriously hot on marshalling cash and cost control.
For FDs who find the prospect of a lifetime in FTSE purgatory hard to swallow, and who instead want a real slice of the action for themselves, private equity can be the obvious path. But it is a path fraught with danger and the threat of a P45. Private equity investors aren’t afraid to make changes to the management teams they back, and more often than not it is the FD in the firing line.
If you are a considering a leap into private equity or are a seasoned pro, we would love to hear your thoughts! Email Amy.Carroll@caspianmedia.com.
Is life as a private equity-backed FD for you? Find out at the FD Surgery Manchester in November.