Sep PE CEO/CFO Report: Generating Internal Velocity
- Scott Engler
- Oct 5
- 5 min read
For CEOs and CFOs, the shift is clear. Value creation depends on internal velocity—accurate financials, consistent decision-making cadence, and clear accountability across the organization. CFOs are playing a broader role across the investment lifecycle, from diligence to Day 1 to exit. Boards are beginning to address succession planning with greater urgency, and AI is moving from theoretical discussions to real operational impact >> See More Below
Table of Contents
📌 Carve-Out CFOs Set the Pace — McKinsey
📌Middle Market Isn’t Frozen—It’s Just Picky — PitchBook
📌Stop Hiring for Confidence—Start Hiring for Outcome — Forbes
📌AI That Actually Works in Portcos — Level Equity
📌Why Boards Don’t Take Succession Seriously — Heidrick & Struggles
📌Why Most CEO Transitions Fail — NACD
📌Your CPO Can’t Deliver Without Real Tools — Heidrick & Struggles
📌PE Is Boring Now—That’s the Point — Matt Levine, Bloomberg
📌Finance Teams Are Becoming Product Teams — Gartner
📌Modern CFOs Don’t Report—They Build — Hunt Club /
📌In Healthcare PE, the Right CFO Fit Is Everything — WittKieffer
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1) Carve-Out CFOs Set the Pace — McKinsey
In carve-outs, the CFO sets the tone for execution—often before the ink is dry. McKinsey lays out a practical blueprint: get the TSA right, size stranded costs early, and lock in Day‑1 control without overcomplicating. The best finance leaders don’t wait for stabilization—they sequence the cutover, control reporting, and drive confidence into the system while the rest of the business finds its footing. This isn’t a strategy problem—it’s a speed and clarity problem. If the CFO isn’t already dual‑tracking reporting, managing cash visibility, and driving cross‑functional rhythm pre‑close, the company loses time it rarely makes back. If your carve‑out CFO isn’t operating at company speed the day the deal closes, you’re not just behind schedule—you’re behind on value creation.
2) Middle Market Isn’t Frozen—It’s Just Picky — PitchBook
Deals are still getting done—just not on momentum alone. PitchBook’s Q2 report shows middle‑market sponsors shifting from platform velocity to bolt‑on discipline, with lenders focused squarely on cash flow over comps. Continuation vehicles are bridging slow exits, but sponsors are being asked to prove the operating model works—not just that the deal was priced right. CFOs now manage across hold strategies, not just toward an exit. Build durable systems, reporting clarity, and flexible capital views that keep sponsors and boards aligned through hold extensions. The CFO playbook isn’t forecasting the exit—it’s being exit‑ready all the time.
3) Stop Hiring for Confidence—Start Hiring for Outcome — Forbes
Leadership hiring is still biased toward polish—and it’s costing value. The fix is discipline: define success in context, test for adaptability, and assess how leaders handle ambiguity under pressure. The best operators don’t always wow in interviews—but they execute with clarity, consistency, and pace. Most misses aren’t “bad hires”; they’re right person, wrong phase. Treat leadership selection like deal underwriting: define the thesis, calibrate risk, and track post‑hire traction. If you’re not running a feedback loop from onboarding through performance, you’re guessing with expensive assets.
4) AI That Actually Works in Portcos — Level Equity
AI wins in PE don’t come from vision decks—they come from ops. Level Equity’s portfolio hackathon showed where traction lives: embedded automations in revenue workflows, classification tools, and forecast optimization. The winners weren’t the flashiest—they were the fastest to deploy. What mattered most? Clean data access, a strong internal lead, and a bias toward execution over experimentation. The portcos seeing value from AI aren’t betting on the future—they’re eliminating today’s inefficiencies and compounding the gains.
5) Why Boards Don’t Take Succession Seriously — Heidrick & Struggles
Succession risk is rising, but board readiness hasn’t caught up. Too many boards wait until a CEO stumbles or exits to engage, with no bench, no transition plan, and no post‑handoff support—just a rushed search and hope it sticks. Real succession planning is upstream: scenario plans, internal development, and first‑year success metrics that everyone owns. A new CEO without a runway isn’t a strategy—it’s a spin of the wheel that slows value creation.
6) Why Most CEO Transitions Fail — NACD
CEO turnover is accelerating—and transitions stall when no one owns the middle. Unclear mandates, short timelines, and pressure for fast optics create brittle starts for even strong leaders. Without structured onboarding, stakeholder alignment, and space to reset, transitions falter. Treat CEO handoffs as multi‑quarter, not one‑and‑done. That means post‑hire coaching, expectation pacing, and real‑time board support—not back‑channel corrections after the fact. If the first 180 days aren’t designed, you’re trusting luck with high‑value assets.
7) Your CPO Can’t Deliver Without Real Tools — Heidrick & Struggles
Boards want HR to move numbers—retention, engagement, productivity—but many CPOs are flying blind. Heidrick shows how outdated systems, weak analytics, and unclear authority block execution. They’re accountable for outcomes but don’t own the levers. If you want culture and talent to drive value, wire HR like a performance function: decision rights, clean people data, and systems that operate at deal speed. Strategy without enablement is just another slide that won’t move the KPIs.
8) PE Is Boring Now—That’s the Point — Matt Levine, Bloomberg
Private equity has matured—and so have the returns. The edge isn’t leverage or mispricing anymore; it’s repeatable execution. Margin expansion, cost discipline, and system‑led scale are the difference makers. “Boring” ops are becoming alpha. Diligence ends at close—value creation begins with consistency. Teams that embrace rhythm and rigor will beat those still chasing flash or hoping multiple expansion does the heavy lifting.
9) Finance Teams Are Becoming Product Teams — Gartner
Gartner projects finance shifting from reporting to enablement. Future‑ready CFOs are building teams that push insight to the edge—where decisions happen. Automate low‑value tasks, embed tools in workflows, and treat finance as a platform for scale. Most portcos aren’t there yet, but first movers gain operating leverage faster. Next cycle, finance won’t be judged by clean closes alone—it’ll be judged by how quickly it accelerates decisions across the business.
10) Modern CFOs Don’t Report—They Build — Hunt Club
Hunt Club reframes the CFO as an architect of speed, trust, and scale—not just a steward of numbers. The best CFOs design operating cadence, build durable systems, and anchor investor credibility. They make other leaders faster. Sponsors can’t afford to mismatch CFO profile to business stage. Cash fog, FP&A rework, and decision drag usually trace back to underpowered finance leadership. A great CFO doesn’t only run finance—they multiply execution across the org.
11) In Healthcare PE, the Right CFO Fit Is Everything — WittKieffer
Healthcare‑backed companies often rotate CFOs early—and for good reason. The thesis drives the profile: some deals need controls and stability; others demand pricing rigor and M&A fluency. The mistake is asking one CFO to do both at once. Sequence the role to the first 180 days and onboard like it’s a growth lever, not a plug‑in. In regulated, margin‑sensitive sectors, “fit” isn’t a luxury—it’s the precondition for value creation at speed.
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Bibliography (linked)
McKinsey — What CFOs Need to Get Right in a Buy‑Side Carve‑Out: https://www.mckinsey.com/capabilities/m-and-a/our-insights/what-cfos-need-to-get-right-in-a-buy-side-carve-out
PitchBook — Q2 2025 US PE Middle Market Report: https://pitchbook.com/news/reports/q2-2025-us-pe-middle-market-report
Forbes — Four Ways to Improve the Selection of Leaders: https://www.forbes.com/sites/tomaspremuzic/2025/09/29/four-ways-to-improve-the-selection-of-leaders/
Level Equity — Five AI Lessons from a Portfolio Hackathon: https://www.linkedin.com/posts/level-equity_five-big-ai-lessons-from-our-portfolio-hackathon-activity-7374084654590488577-O9ea
Heidrick & Struggles — (Boards & Succession resource — add your preferred link)
NACD Directorship (Fall 2025) — CEO Succession Cover Story: https://www.nacdonline.org/globalassets/public-pdfs/nacd-directorship-fall-2025_cover-story.pdf
Heidrick & Struggles — Chief People Officer Monitor 2025: https://www.heidrick.com/en/insights/human-resources-officers/chief-people-officer-monitor_building-hr-functions
Bloomberg / Matt Levine — Private Equity Is Getting Boring: https://www.bloomberg.com/opinion/newsletters/2025-09-23/private-equity-is-getting-boring
Gartner — Future of Finance 2030: https://www.gartner.com/en/finance/insights/future-of-finance-2030
Hunt Club — Building the Modern CFO Profile (Laurence Tosi): https://hs-609582.f.hubspotemail.net/hubfs/609582/Building%20the%20Modern%20CFO%20Profile_Lessons%20From%20Laurence%20A.%20Tosi.pdf
WittKieffer — CFO Transitions in PE‑Backed Healthcare: https://api.wittkieffer.com/wp-content/uploads/1998/09/cfo-pe-backed-healthcare-wittkieffer.pdf
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