What every FP&A leader in a private equity portfolio company needs to know

If you’re a financial planning and analysis (FP&A) professional considering a role in a private equity portfolio company, the path can be both challenging and rewarding.

Private equity-backed businesses operate at a faster pace than traditional organizations. In these environments, FP&A leaders are tasked with providing actionable insights that drive strategic decisions. If you’re ready for rapid career growth, frequent interaction with senior leaders and the opportunity to play a pivotal role in business transformation, this may be a good path for you.

But before making the leap, it’s essential to understand the unique demands and opportunities that come with working in a private equity portfolio company.

An impressive résumé is expected, and many private equity hiring managers want even more.

In a newly acquired private equity portfolio company, hiring managers will strive to secure the best FP&A leader possible.

Ideal candidates will have growth-planning experience, advanced financial modeling skills, have served as a strategic partner to prior business leaders, are prepared to deliver complex financial analysis in an easily digestible format and can serve as key lead on financial decisions.

Investment banking and/or integration experience is a major plus. These individuals help combine financial systems and tools or implement new ones, and experience in a business sale or a merger will stand out in the hiring process.

Related: How to find and land an executive-level career opportunity 

In the private equity landscape, finance teams also tend to run “lean and mean,” so disciplines that are historically siloed into different roles are frequently bundled into one.

If you’re a current FP&A lead and do not have cash management and/or treasury experience, we recommend gaining at least some exposure to both in advance of joining a private equity portfolio role. This doesn’t necessarily mean handling or managing banking relationships, but it does mean having experience with covenant calculations, debt servicing, etc.

Be prepared to serve as a strategic partner to your team, and know you may be asked to flex outside of your role.

We can’t overemphasize the importance private equity FP&A leaders play in strategic financial decisions. You will own the FP&A process end to end and be required to present findings directly to senior leadership, all while fielding questions that directly influence decision making.

The best example of this is inorganic growth. You may not be conducting due diligence yourself, but you will assist with modeling and financial analysis during the M&A process.

Related: How to align corporate development hires with operational growth

On a team where you are the sole FP&A person, you will also need to step outside of your role from time to time to help with other initiatives, whether that be strategy, financial stewardship or otherwise. You will interact with people at all levels of the business and should be able to relate to everyone and form relationships accordingly.

You’ll be paid well, but a successful career in private equity also means you could lose your job.

Equity is now viewed as a requirement for top FP&A talent in the private equity world. Even controllers are beginning to receive equity packages in their compensation plans.

If you do your job well in a private equity portfolio company, you’ll help sell the company for a premium. Sometimes the acquirer will seek to retain A-Players, but often you’ll lose your job and be handed a healthy paycheck.

The truth is that private equity offers some of the most competitive wages in the professional world, but you must be prepared to cycle out at the end of the holding period.

Top takeaways for private equity FP&A leaders:

In private equity portfolio companies, FP&A leaders play a pivotal role in driving strategic financial decisions, facilitating growth and navigating transactions. The demands are high, but so are the rewards.

Private equity offers a fast-paced, high-impact environment where top performers can achieve rapid career growth and enjoy competitive compensation — often with an equity upside. However, it’s essential to understand the expectations and embrace the possibility of transition when the portfolio company changes ownership.

By honing your financial modeling, strategic communication and cross-functional leadership skills, you can position yourself for success and capitalize on the unique opportunities private equity presents.

To learn more, contact Ryan Morgan at (336) 217-9105 or ryan.morgan@charlesaris.com.