Gary McGaghey is the CEO of Williams Lea Tag Group. He shares four strategies to help CFOs thrive in the private equity space. They include:
- Get to Grips With Complex Cash Flow Requirements
The cash flow requirements for private equity are complex, so you need to get your head around what the fund is trying to achieve with each investment and how it will get that money back. Furthermore, the investments are dynamic and may not fit the usual parameters of managing a company’s cash flow. It will help if you think creatively.
- Build a Reliable Fact Base
The private equity fund has limited resources; they want to make sound business decisions and know how the company can go ahead. You may not get the right information upfront, and you need to build up a reliable base of facts that you can present to strengthen your case for what needs to be done. It would help if you worked tirelessly towards building this fact base; it is not an easy task, but it is essential to get your message across and communicate with the fund.
- Build Effective Teams
It would help if you built effective teams to be effective with your messaging when approaching the private equity fund. You will be working with individuals with a high level of expertise in their field, and you need to minimize any conflict or misunderstandings. It would help if you always remain objective and not let your emotions cloud the message you are trying to convey.
- Lead With Transformation in Mind
The private equity fund needs to see that you are open and prepared to work with them for them to cooperate and listen to you. They need to know that you won’t change and that any action you take leads toward the right outcome. This is what they expect of you, so be open and honest and develop a two-way conversation so the relationship will continue for some time.