A Day in the Life of a Private Equity CFO: with Peter Sherar
“You need to be extremely resilient, as there’s a small window to deliver. You can expect periods of intensity where you’ll cop some knocks. But if you’re up for the challenge and prepared for the sacrifices, you’ll thrive.”
This week we’re introducing you to Peter Sherar. A CFO who spent many years working for both publicly listed and privately owned companies, until his introduction to the private equity (PE) space in 2018. Since then, he hasn’t looked back. Peter thrives in the PE space and specifically, working with tech companies. He’s someone we’ve been fortunate enough to build a long-standing relationship with, having placed him in three roles.
Here’s a glimpse into his life as a private equity CFO.
How he made the switch to private equity
I spent a lot of time in advisory roles, consulting private clients at Deloitte. It’s something I really enjoyed. So, after several years in public company CFO roles, I decided I really wanted to get back to the private client environment.
Allura connected me to the board members at Five V. They deal with these guys regularly across portfolio companies and had dealt with some of the executives in previous roles. They also gave me a solid take on the people that I might be joining, which is the most important thing to me when deciding whether to take a PE role. Knowing they could extend my network and put me in front of some new people proved incredibly valuable – especially considering how competitive the mid-market C-Suite space is.
What he enjoys about private equity
The really strong focus on growth and value drivers, and the multi-year lens on that. The challenge with public companies is that you’re only as good as your last set of results. And you’re publishing results every six months, which means you’re constantly having to update the market on your performance. Whereas in PE you’re away from that lens. And you can have a really strong focus on that multi-year journey. While that might mean you have some shorter-term downsides, there are always those longer-term upsides to work towards. And the PE space is very attuned to that.
What he’s learnt from his last successful exit
Firstly, that timing is critical to the exit. There’s so much to consider: from the macroeconomics and whether the environment’s right, to the dynamics of the market you’re in and the business’ performance in that market. Then it’s about bringing it all together, so that you can present the business in the best light to highlight its quality and value.
You really have to understand the business, and its historic and future performance, on a whole other level compared to any other stage of the investor cycle.
And secondly, to plan for the exit from the start. You’ve always got to have one eye on it, and the other on the multi-year strategy. What does this look like in three years’ time, four years’ time? And then planning for and making decisions around that.
That’s what I love about PE. You can make decisions that may have impact now, but you’re really going to see the benefit in three years’ time as you’re heading towards the exit journey.
The most important consideration for future roles
Having gone through the cycle, one of the biggest learnings is the importance of having quality people on board with you. You can have all the best plans laid out, but if you don’t have exceptionally good management and team members, you may not be able to execute on those plans.
This is critical. Now, I make a point of getting to know the chair, the CEO and the executive leadership team before I take on a new role. I need to know that the people I’m in the trenches with are top quality and really good at what they do. And also, that they are good people that I enjoy working with. That’s the biggest factor on how successful we’ll be.
What a typical day looks like
Like any CFO role it’s varied, but on a much bigger platform. I can be in a meeting talking transformational M&A one minute, and the next I’m discussing why a line in the P&L is off budget by more than 10%. So, it’s a matter of going from really detailed explanations of why the numbers are off to having a major, strategic discussion.
The main difference between PE and traditional CFO roles
The main difference is that a PE CFO role is typically more growth focused. It’s about how to deliver top line growth while maintaining and managing costs. At times, traditional CFO roles can be very focused on reporting, cost control and statutory matters. Whereas PE roles can often be broader in thinking about the growth and value that can be delivered through various channels of the business.
What he’d say to someone looking to transition to a PE CFO role
It’s definitely not for everyone. You need to be extremely resilient, as there’s a small window to deliver. So, you can expect periods of intensity where you’ll cop some knocks and take the heat. But if you’re up for the challenge and prepared for the sacrifices that come with working in a high-octane environment, you’ll thrive.