/ OVERVIEW: We are pleased to share with you our 2021 Private Equity CFO Survey. It's our sixth annual installment. During April 2021, we contacted CFOs of PE portfolio companies worldwide and compiled more than 300 responses. Lots to dig into, but here are some of the highlights:
PANDEMIC IMPACT NOT AS BAD AS FEARED
We were struck by the difference in the responses to the same question in April of 2020 and April of 2021. In 2020 survey, 70% of respondents anticipated that the pandemic would have a material, negative impact on their Company’s profitability, value and viability. One year later, only 30% indicate that these concerns were borne out. Decisive steps taken by investors, CEOs and CFOs to respond to changing market conditions were effective in protecting jobs and preserving the long term viability of these companies. Further, the number of CFOs reporting an increase in EBITDA (due to expense control, pricing, and the extension of new products and services) was almost as large as those reporting a negative impact.
PE TRANSFORMATION REQUIRES DATA & ANALYSIS
CFOs noted a continued, increasing focus on data, analytics, and the role of the finance function to support the Company’s decision support needs. 60%of our respondents cite FP&A and data analytics as areas where they will invest in their teams this year, far and away the largest areas for investment.
MARKET FOR PE-TESTED CFOs CONTINUES TO TIGHTEN
The survey portrays a robust market for experienced CFOs. More than 50% of CFOs in companies greater than $100M turnover are already receiving six or more new job approaches each month. As expected hold times increase, we anticipate that an already-stretched market for CFO talent will force creative solutions to CFO recruitment. In response to this, we will be publishing a study in Q3 tracking PE exit outcomes against the experience sets of key members of portfolio company leadership teams.
During March and April 2021, Vardis contacted the CFOs of more than 1,600 Private Equity Portfolio companies worldwide. North America is somewhat over-represented in our final sample – it represented 71% of the more than 250 respondents compared to 55% of our survey distribution. The CFO market is efficient and global. We have identified regional differences where they are material.