by Elizabeth Fitzgibbons – Group Chief Commercial Officer

As 2025 approaches, the private equity (PE) landscape is witnessing a resurgence in deal volumes and a gradual recovery in valuations. Despite these positive trends, extended hold periods persist as a significant challenge, compelling fund managers to rethink and optimise strategies for portfolio companies initially designed for shorter-term holds.

CFOs in PE must align their strategic priorities with the evolving dynamics of the market and their portfolio companies. PE firms are managing larger and more diverse investments, prompting a transformation of back-office systems that cannot be effectively achieved without a people-centric approach to change management. Against this backdrop, private equity CFOs are central to every stage of the investment lifecycle, setting priorities and spotting opportunities.

The key strategic themes for 2025 are:

• Proactive preparation for extended hold periods

With hold periods showing little improvement from the peaks observed in 2023. Strategic planning should begin early in the investment lifecycle to maximise value creation. As exit timelines approach, tactical adjustments focused on value maximisation become imperative.

• Leveraging technology for efficiency and scalability

CFOs are increasingly responsible for the group’s strategic adoption of ERP systems and automation technologies, which can improve operational control, support scalability and align with long-term objectives. Unlocking value is key and the use of advanced analytics, artificial intelligence and automation will significantly enhance deal sourcing, due diligence and portfolio management by analysing vast amounts of data to identify investment opportunities and risks.

• Infrastructure – a core value driver

CFOs are increasingly focusing on critical internal functions around operational efficiency and resource allocation. They are constantly evaluating employees and third party advisors to ensure that all have the correct skill sets to enhance productivity and growth.

• Unlocking the value of cross-portfolio collaboration

CFOs are uniquely positioned to connect the dots between portfolio companies, facilitating the exchange of best-in-class ideas on market expansion and technology adoption. With one foot firmly in operations and the other in strategy – while maintaining a seat at the leadership table – they play a pivotal role in bridging gaps and driving collaborative growth across the portfolio.

The evolving role of CFOs in private equity

CFOs are highly valued for the impactful guidance they can provide and their role has dramatically evolved over the past decade. CFOs are now prioritising operational efficiency, leveraging technology and evaluating outsourcing to address the pressure of shrinking margins. Routine tasks, such as fund accounting, are often seen as low-value activities for in-house teams. Instead, CFOs aim to redirect talent toward strategic, value-driven functions like portfolio analytics and investor relations.

Overcoming technology implementation challenges

While CFOs recognise the need to automate fund accounting processes, they also identify it as one of the most challenging areas for technological integration. Paradoxically, while fund accounting is not a preferred area for team focus, it demands substantial attention due to its complexity and resistance to automation.

Automated invest reporting: The future of transparency

Investor expectations for on-demand access to financial data continue to rise, especially among smaller firms. Meeting these requirements without inflating costs requires the adoption of automated reporting solutions. By embracing these technologies, CFOs can enhance transparency and improve investor satisfaction while maintaining cost efficiency.

Conclusion

As private equity enters a new phase of strategic complexity, CFOs  are having to navigate the challenges of group priorities along with streamlining internal processes and workstreams, thereby ensuring their firms remain competitive in an increasingly demanding market.

How we can help

At Centralis, we partner with CFOs to enable them to outsource non-core functions and allow them to focus on high-value activities, supporting clients with outsourced tax, compliance, operational and accounting support, alongside fund administration and SPV management.

Get in touch to find out how we can support your business.