Chief financial officers (CFOs) in private equity (PE)-backed companies are taking on broader operational and strategic responsibilities, with value creation now surpassing traditional finance functions as their top priority, according to a new global study from The Barton Partnership. The survey of 258 CFOs across Europe, North America, and Asia-Pacific suggests that finance leaders are increasingly expected to drive enterprise growth while often inheriting finance teams and systems that are not equipped for those expanded responsibilities.
The role of the chief financial officer is undergoing a significant transformation in private equity-backed businesses, as investors increasingly rely on finance leaders to drive operational value creation rather than simply oversee financial reporting.
According to The Role of the CFO in PE-Backed Businesses, a new report from executive search and advisory firm The Barton Partnership, 67% of CFOs say the scope of their responsibilities has changed materially in recent years. The findings are based on a survey of 258 CFOs across Europe, North America, and Asia-Pacific.
The research suggests this is more than a gradual evolution. The consistency of responses across CFOs with varying levels of private equity experience indicates a structural shift in sponsor expectations rather than a learning curve associated with the role.
Value creation becomes the CFO’s primary responsibility
Historically, CFOs were measured by their ability to manage financial controls, reporting accuracy, and liquidity. The latest survey indicates those priorities are now being complemented—and in many cases overtaken—by value creation initiatives.
Approximately 67% of respondents identified value creation as their primary day-to-day focus, ahead of cash flow and liquidity management (57%) and financial reporting and controls (54%).
For many mid-market portfolio companies, particularly smaller businesses, the finance function is expanding into responsibilities traditionally associated with chief operating officers, including operational performance management and strategic execution.
Oliver Phoenix, CEO of The Barton Partnership, described the modern CFO as the bridge between an investment firm’s growth thesis and day-to-day business execution.
Finance leaders are rebuilding while delivering
The report also highlights the operational challenges many CFOs inherit when joining private equity-backed companies.
Nearly 59% said they took over finance functions requiring significant rebuilding, a figure that increases to 62% among companies generating less than $100 million in revenue.
Even among larger portfolio companies, only 19% of respondents reported inheriting what they considered a strong finance organization.
This suggests many CFOs are simultaneously modernizing finance operations while being held accountable for delivering ambitious value creation plans.
Forecasting and data quality remain critical weaknesses
Accurate forecasting continues to represent one of the greatest risks facing finance leaders.
The survey found that 61% of CFOs identified forecast accuracy as their biggest professional concern, while 50% cited cash flow and liquidity management.
Both challenges share a common underlying issue: inadequate data quality.
As private equity firms increasingly rely on real-time operational metrics to monitor portfolio performance, fragmented systems and inconsistent financial data can undermine forecasting accuracy, investment decisions, and strategic planning.
Industry analysts have consistently identified trusted enterprise data as a prerequisite for successful AI adoption, predictive analytics, and financial planning. Gartner has repeatedly highlighted poor data quality as one of the most significant barriers to digital transformation initiatives, while McKinsey & Company notes that organizations with mature data capabilities are more likely to realize measurable business value from technology investments.
Alignment with investors matters more than oversight
One of the report’s more notable findings concerns the relationship between CFOs and private equity sponsors.
Only 18% of respondents reported being highly aligned with their investors on expectations and objectives.
When asked what would most improve their effectiveness, 79% pointed to clearer and more realistic performance expectations, compared with just 27% who wanted greater hands-on involvement from sponsors.
The findings suggest governance and communication may have a greater influence on executive performance than direct operational oversight.
Phoenix argued that value creation should be shared across the executive leadership team rather than resting primarily with finance.
Organizations where commercial, operational, and finance leaders collectively own transformation initiatives are better positioned to execute investment strategies successfully, he said.
Compensation reflects growing responsibility
The survey also examined executive compensation trends across private equity-backed companies.
While 89% of CFOs participate in equity or long-term incentive plans, nearly 65% hold ownership stakes below 1%.
When evaluating new opportunities, respondents ranked base salary (73%) and equity participation (69%) as the most important elements of compensation, significantly ahead of annual bonuses.
The findings indicate that finance executives increasingly value long-term alignment with enterprise growth over short-term incentive structures.
What lies ahead for PE finance leaders
Looking forward, CFOs identified three primary challenges over the coming year:
- Delivering value creation initiatives (46%)
- Navigating macroeconomic uncertainty (41%)
- Improving data quality and finance systems (39%)
These issues are closely connected. Weak data affects forecasting accuracy, inaccurate forecasts complicate execution of value creation plans, and missed performance targets can strain relationships between management teams and investors.
For private equity firms, the report suggests that investing early in finance technology, data infrastructure, and executive alignment may strengthen portfolio performance throughout the investment lifecycle.
As CFOs continue evolving into enterprise transformation leaders, success is increasingly being measured not only by financial stewardship but also by the ability to translate investment strategies into sustainable operational results.
Market Landscape
Private equity firms are increasingly investing in digital finance capabilities as CFO responsibilities expand beyond traditional accounting and reporting. Cloud ERP platforms, AI-powered financial planning, enterprise performance management software, and real-time analytics from providers such as Microsoft, Oracle, SAP, Workday, and Salesforce are becoming central to value creation strategies. Finance leaders are expected to combine financial expertise with operational execution, data governance, and cross-functional leadership.
Top Insights
- Two-thirds of CFOs in private equity-backed businesses say their responsibilities have expanded significantly, with value creation becoming their primary operational focus.
- Nearly 60% of finance leaders inherit underperforming finance functions, requiring organizational transformation alongside execution of investor growth strategies.
- Forecast accuracy and cash visibility remain the biggest operational risks, highlighting persistent challenges around enterprise data quality and financial systems.
- Most CFOs seek clearer expectations from private equity sponsors rather than greater involvement, emphasizing governance and alignment over direct oversight.
- Equity participation is widespread, but ownership stakes remain relatively small despite CFOs assuming broader strategic accountability for business performance.
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