Three ways to become a CFO for a private equity healthcare portfolio

So, you want to be a CFO for a private equity-backed healthcare business?

Serving as the top financial executive for any organization is both a challenging and rewarding path, but this is especially true in a private equity portfolio business.

The problems you’re solving are more complex and time-sensitive, but the reward for growing a business and participating in a “wealth event” is unmatched.

Related: Six things every CFO should know about private equity

Healthcare is a particularly active sector for private equity investment due to its resilience, especially as the population grows older and drives demand for specialized health services.

Because of the rewarding career private equity offers and the popularity of healthcare as an investment target, we’re often asked how skilled financial leaders can land their first CFO position in a healthcare portfolio. This is what we say:

Do a great job where you’re at

If you’re already serving in a private equity healthcare portfolio, consider staying put. Most organizations want to make an internal CFO hire when possible because it’s viewed as the least risky choice.

If you’re looking to join a healthcare portfolio but don’t have the experience to be in the CFO seat, interview for a financial planning and analysis role. Performing at a high level in this position, diversifying your skillset and seeking opportunities for greater visibility will put you on the trajectory to one day interview for CFO.

Join a startup

Startups imply risk for all stakeholders, whether that be an investor or a member of the C-suite. However, most of the money in private equity healthcare investment is currently flowing into lower middle-market firms building startups to grow their own investment platforms.

This is one of the main routes to a private equity CFO position, but it’s also valuable experience for any financial leader. Joining a platform investment means you’ll have exposure to M&A, integration and the overall private equity playbook.

Interview at a turnaround

Turnaround investing in private equity involves purchasing a company that is facing bankruptcy and restructuring the business to get it out of distress – much of which falls on the CFO to be the financial steward and planning expert.

Strategies to turn a company around commonly involve cost cutting, organizational restructuring and finding new revenue streams to fund the business. Serving in this role is less glamorous than joining an organization primed for growth, but it’s a valuable experience for any CFO and helps build credibility for future roles.

Turnaround businesses are also more willing to hire young talent as the CFO, if they’ve previously served in a financial planning and analysis position.

The takeaway:

Being CFO in a private equity-backed healthcare business is a uniquely rewarding career. If you’re interested in this path, three common strategies include getting hired in a lower-level finance position and working your way up to the C-suite, joining a startup or joining a turnaround investment.

To learn more about healthcare private equity, contact Josh Kotelnicki at (336) 217-9159 or josh.kotelnicki@charlesaris.com.