As the role of the Chief Financial Officer continues to evolve, so do the responsibilities and expectations of CFOs. With pressure mounting on public company CFOs to become strategic partners rather than just financial overseers, Gary McGaghey is a global CFO with many years of experience in the finance sector. He shares the following ideas to assist CFOs in private equity.
Increase transparency in reporting and processes
As a CFO in a public company, you will likely be required to provide detailed reports to your shareholders and investors. However, you’ll need to report to a limited partner who isn’t necessarily interested in the intricacies of your financials. Instead, LPs will want to know your plan for growth in the portfolio and how you plan to utilize the capital they’ve invested in the fund. He Garry advises CFO to include a breakdown of the fund’s expected returns, the fund’s investment strategy, and a detailed list of capital sources and their expected returns.
Leverage technology to become a strategic partner
One thing that public company CFOs have over their private equity counterparts is using the latest technology. You have an opportunity to select the best tools for the job, ranging from software to reporting tools to communication platforms. You can control access to your financials, providing data and results to those who need it without delivering it to everyone. As a private equity CFO, you can control access and determine who needs what information and when they need it.
Be a coach and mentor for your team.
This requires you to be a coach, mentor, and friend to your team members. When hiring for your team, look for people who have the same personality as you. Show your team members that you care about their success, and they’ll likely achieve success for you.
Develop a relationship with investors
Partnerships are essential in private equity. You have to have a good relationship with your investors, and the best way to do that is to get to know them. You can use this to learn more about the investors and what they want out of the fund.
CFOs need to be transparent in reporting and use technology to be strategic partners. They also need to be coaches and mentors for their team members and develop relationships with investors. Read on to find out more about Gary McGaghey and his work at crunchbase.com