The Jul/Aug PE & CEO/CFO Report > PE Gets Creative
- Scott Engler
- Oct 3
- 9 min read
CEO & Co-founder, Sync Executive Partners | Fmr CEB/Gartner
September 4, 2025
A massive reset is underway across private equity. Over $1.8 trillion in portfolio assets have aged to or past the traditional five-year hold periods, with another $360 billion maturing annually. Yet exits remain constrained—just $600 billion last year—forcing sponsors to rewire strategies rather than ride out the cycle. LPs are demanding action. As Mubadala’s Jean Francois Roberge put it, “DPI is the new IRR.” Distributions—not just returns on paper—now define performance.
Sponsors are turning to carve-outs, continuation vehicles, and rewiring the operating model. Go-to-market dysfunction and retention risk are flashing red across portfolios, even as sponsors push for AI adoption, operational excellence, and value creation discipline. Many portfolio companies are fighting to unlock productivity while moats are being drained by lightning fast disintermediation. This environment favors those who can drive pace, focus and execution—not wait for perfect conditions.
Isn't the old curse "may you live in interesting times"?
2025 is shaping up to be a volatile Q4. With rate cuts, continuing tariff uncertainty, and business model reinvention, the firms that succeed will be those willing to re-evaluate leadership teams, reset the operating cadence, and deliver against new portfolio realities.
Here are Our Curated PE CEO/CFO Highlights — July & August 2025
Carve-Outs as the New Playbook Source: S&P Global
How PE CFOs Drive AI Adoption Source: Accordion
CV² and the Liquidity Shift Source: Financial Times
Generative AI Doubles—But Skills Lag Source: Russell Reynolds Associates
Preparing for the PE 401k Play Source: Barron’s
The New Realities of he IPO Markets Source: Wall Street Journal
5 Reasons CEOs and CFOs Need to Start GTM Planning Source: SBI
How to Win as PE CFO Source: The CFO Show
The Modern CFO Source: Run the Numbers Podcast
Apollo’s AI Integration Blueprint and 5x ROI Source: MIT Sloan Management Review
The Four Pillars of Agentic AI Readiness Source: McKinsey & Company
16 Critical Questions for New CEOs Source: HBR
Enjoy this collection of PE CEO/CFO articles for July & August 2025. Please email me with errors, typos.
Carve-Out Value Rising - S&P
Carve-outs are no longer fallback strategies—they’re deliberate value creation levers. As large corporates refocus on core operations, PE sponsors are capitalizing on dislocation, executing carve-outs with precision and speed. Deal volume is rising, and the profile of these transactions has shifted from reactive to strategic.
For CFOs, carve-outs demand immediate action: stand-up systems, separation-ready reporting, and TSA oversight from day one. For CEOs, the challenge is cultural and structural—building focused, independent companies out of corporate complexity. These deals only work when leadership turns fragmentation into focus. With $20B+ in deal value in Q2 alone, carve-outs aren’t a trend—they’re the playbook.
How CFO's Drive AI Adoption - Accordion
Sponsors are pushing for AI adoption across their portfolios—but CFOs are struggling to deliver. A recent survey shows that while 98% of PE sponsors expect aggressive AI implementation, 68% of portfolio CFOs lack clarity on where to begin. The urgency is high, but readiness is low—and the credibility gap is growing.
This disconnect isn’t just technical—it’s strategic. CFOs without a clear AI roadmap risk being sidelined in boardroom conversations. Sponsors want cost reductions, forecast acceleration, and better investor storytelling—but few finance teams are set up to deliver. The takeaway: AI fluency is now table stakes. The CFOs who frame a structured adoption strategy—grounded in governance and business value—will shape the next wave of performance.
CV² Liquidity Play - FT
Continuation vehicles are evolving fast—no longer just an exit workaround, they’re becoming core to how sponsors manage aging assets. The next version, CV², involves selling to multiple secondaries while retaining exposure to high-performing assets. It’s part liquidity solution, part conviction signal—but it raises the bar for governance and communication.
CFOs now play the lead role in these complex structures. They’re tasked with fair valuation, audit transparency, and LP engagement across an increasingly skeptical investor base. For CEOs, CV² often means longer holds and continued performance pressure, with no finality in sight. In this environment, clarity beats creativity. These deals work when leadership earns investor trust—deal after deal.
We've launched our strategic search and fractional, advisory and interim networks: go to www.syncexecutivepartners.com for more.
Generative AI Adoption Doubles — Skills Lag - RRA
Generative AI usage among executives has nearly doubled in the last 12 months—but leadership capability hasn’t kept up. Confidence in leading AI efforts sits below 50%, while legal risk, critical thinking, and ethics are becoming active concerns. The tools are moving faster than the teams.
For CFOs, that means investment is outpacing governance. For CEOs, it means AI strategy must extend beyond pilots to leadership training, change management, and board education. Without structure, speed becomes risk. The firms that scale AI responsibly will gain a lasting edge—not just a temporary boost.
401(k) Gets a PE Injection - Barrons
Private equity is entering the retirement mainstream. New regulations allow limited PE exposure in 401(k) plans—expanding access, but also scrutiny. LP expectations are about to shift dramatically. CFOs must build institutional-grade reporting. CEOs must align culture, growth, and governance with a new tier of investor visibility. The capital may be passive, but the reputational stakes are not.
IPOs Reopen, But the Bar Is Higher - WSJ
The IPO market is showing strong signs of life again. Nearly 100 companies have gone public in the first half of 2025—a 41% jump from last year—indicating that investor confidence is rebounding after a quiet period. This momentum in public markets often signals improved conditions for private equity firms looking to sell their investments, either through mergers and acquisitions or IPOs.
Despite the uptick in IPO activity, private equity deal flow is still sluggish. High interest rates, economic uncertainty, and trade policy issues like tariffs are making it harder for firms to confidently exit their positions. Many private equity managers are holding off on selling companies because they aren’t yet seeing the strong returns they want.
One bright spot is that rising public stock prices are making it easier for firms to assess the value of their portfolio companies. This could build confidence and unlock more deal activity in the second half of the year—if market conditions continue to improve.
5 Reasons CFOs and CEOs Need to Start GTM Planning - SBI
Heightened Market Uncertainty The macro environment is more unpredictable than it’s been in years. Each recent year has brought new disruptions—resignations (2021), inflation (2022–23), election hesitancy (2024), and now a volatile policy environment. Companies must plan in a climate of ambiguity.
Business Model + Execution Model Transformation AI is driving simultaneous shifts in what companies sell and how they operate. GTM planning must now account for new product types, pricing models, delivery mechanisms, and internal workflows—all evolving in real time.
Declining ROI on Sales & Marketing Spend While costs are stabilizing, revenue growth is slowing. That means tighter GTM targeting and planning are essential to reverse the downward trend in return on growth investments.
Falling Net Revenue Retention (NRR) NRR is consistently declining—signaling that legacy assumptions about expansion and upsell are no longer reliable. Planning must shift to focus on durable, efficient growth levers.
Early-Year Momentum Drives Year-End Outcomes Companies that start strong grow up to 6x faster. That momentum doesn’t happen by accident—it comes from having a clear, aligned plan before the year starts.
The Modern CFO - Run the Numbers
How to Win as a PE CFO - The CFO Show, Run the Numbers
PE-Xcelerate is lunching our New PE Accelerator Certifications for CFOs and CHROs. Use this link to join 100+ executives in driving PE Excellence.
Here's what a recent CEO wrote about our course:
Apollo’s AI Integration Blueprint - MIT
Apollo isn’t just dabbling in AI—they’re making it a core part of how they drive value in their portfolio companies. As early as due diligence, they’re evaluating where AI can move the needle—whether it’s boosting sales, streamlining operations, or unlocking new customer experiences. Their dedicated AI team partners directly with company leadership to find real use cases, not science experiments. It’s a structured, hands-on approach that ensures AI initiatives actually tie back to business outcomes, not just tech hype.Case studies show 5x ROI, 20%+ productivity gains, and 65%+ procurement savings.
AI is core to PE value creation – Apollo embeds AI across portfolio operations to boost competitiveness and value.
They map “value pools” – AI is aligned to ROI-rich areas like finance, ops, sales, and customer care.
Diligence starts pre-deal – Apollo assesses AI readiness and industry impact before investing.
The Four Pillars of Agentic AI Readiness
Agentic AI isn’t an IT rollout—it’s a C-suite transformation imperative. CEOs must own it, not delegate it. McKinsey makes clear: the winners won’t be those with the most pilots—they’ll be the ones who rebuild the operating model around intelligent agents.
What Leaders Must Do:
Scale, don’t stall. Stop spinning up disconnected AI experiments. Shift from sporadic pilots to enterprise-scale programs that are tied to business priorities.
Automate end-to-end, not task-by-task. Don’t settle for AI-enhanced tasks—redesign entire workflows to be agent-led, from initiation to outcome.
Break silos. Transition from AI as a data science side project to cross-functional transformation squads—blending ops, product, tech, and design.
Industrialize with guardrails. Build toward repeatable, governed deployment. That means systems for testing, auditing, iterating—and ensuring responsible scale.
The Four Pillars of Agentic AI Readiness >To lead this transformation, CEOs must ensure alignment across four critical foundations:
People. Upskill teams to co-design with agents, not just consume outputs. This means mindset shifts, not just tooling.
Technology. Invest in or integrate an agentic AI mesh—a modular architecture that supports scalable, plug-and-play deployment.
Data. Eliminate latency. Agents require real-time, high-quality data access across systems to operate effectively.
Governance. Ensure safe autonomy. Set clear policies, audit trails, and accountability frameworks to balance speed with oversight.
This isn’t about buying smarter tools. It’s about rearchitecting how your company works, end-to-end. If you don’t lead it from the top, it won’t scale. If you do, you can create real competitive separation in agility, cost, and customer experience.
16 Questions for New CEOs
A CEO’s first 100 days can set or stall momentum. From prioritizing key advisors to balancing reactive firefighting with vision-building, this guidance hits the heart of value creation. Private equity CEOs must move quickly to align teams, clarify strategy, and establish focus—or risk drowning in stakeholder expectations.
Leadership Effectiveness & Team Design
Who will drive change from the trenches—coaching, empowering, and elevating their teams, as opposed to just managing the business and tracking metrics?
Is my team inclusive of leaders who have different viewpoints?
Do I have leaders on my team who will challenge old ways of thinking and drive towards where the business is headed?
What signals am I sending to the organization and clients with my leadership choices?
Stakeholder Alignment
Who are the most important stakeholders based on where the organization is going, not where it’s been?
Do your stakeholders have a clear understanding of what the organization’s priorities are?
Who are the culture carriers in this organization? Are their voices involved early enough to build alignment, not just communicate decisions?
How are we measuring whether trust in leadership is growing or fading?
Strategic Vision & Execution
What actions can we take now that will drive immediate impact for where the organization is headed?
Is the organization currently clear about how it creates value and the big strategic questions that must be addressed?
Who has the insight and foresight to shape the vision—and how fast should we move to stay ahead?
How are priorities being balanced to deliver results today while driving future growth?
CEO Focus & Time Management
In which areas can you truly move the business? (As opposed to letting what’s most visible or urgent capture your attention.)
How will you plan to listen broadly enough to see the full picture—and how will you act boldly to shape it?
How are you managing your time between reacting and leading—and what needs to shift?
What are you concerned you might be missing—and who will you trust to tell you the truth?
That's all for this month, DM me with any questions or typos.
📎 Source Appendix
Carve-Outs as the New Playbook Carve-outs are no longer fallback plans—they’re now core value creation levers for PE sponsors. 🔗 S&P Global
The AI Expectation vs. Execution Gap 98% of sponsors demand AI transformation, but 68% of CFOs lack a starting point. The credibility gap is growing. 🔗 Accordion
CV² and the Liquidity Shift Continuation vehicles are now essential liquidity tools—but they demand CFO-led governance and investor trust. 🔗 Financial Times
Generative AI Doubles—But Skills Lag Executive usage of GenAI has doubled—but leadership fluency, ethics, and governance are still playing catch-up. 🔗 Russell Reynolds
401(k)s Get a Private Equity Boost PE enters the retirement mainstream via 401(k) access, raising transparency and reputational stakes. 🔗 Barron’s
The Reopening of IPO Markets Nearly 100 IPOs in H1 2025 signal renewed momentum, but PE exits remain difficult under macro pressure. 🔗 Wall Street Journal
Top Planning Trends for CEOs and CFOs Planning is now a leadership discipline. Agile, transparent teams gain an edge in volatile markets. 🔗 Bryan Kurey on LinkedIn
Apollo’s AI Integration Blueprint Apollo operationalizes AI across its portfolio—cutting costs, improving customer experience, and building smarter companies. 🔗 MIT Sloan Management Review
The Four Pillars of Agentic AI Readiness Agent success depends on aligning people, technology, data, and governance—led from the top. 🔗 McKinsey
16 Critical Questions for New CEOs A distilled checklist across four areas: team, stakeholders, vision, and personal time management. 🔗 [Synthesized from various CEO onboarding frameworks and leadership guidance]
Comments