Steven Ferris was delighted to speak at this week’s fantastic Real Deals Value Creation Summit 2022, discussing how to get the most out of management teams. He talked about the importance of the CFO role, as written about by Jennifer Forrest of Real Deals.
Soho Square’s investment thesis is to take minority stakes in businesses, as they back winning management teams and entrepreneurs. Because of that, it can be tricky to “crack the whip” with implementing changes to the management structure. In light of this, Steven Ferris, director at Soho Square, explained: “The role we often find the hardest to recruit for is the CFO. We find that in the part of the market we invest in, businesses don't invest a lot in the finance function.”
However, John Hammond, director at Northedge, remarked that “getting the CEO and chair right can be one of the most important factors in building a management team.”
Speakers also discussed how appointing interim hires can provide short-term solutions to senior roles, especially when PE firms eye up a route to exit.
“One of the ways we work is by finding a consultancy CFO. This individual has usually worked their way up the ladder. We bring them in as a way of displaying to the greater management team what good in that position actually looks like,” Ferris explained. “We have to explain to management that bringing these guys in is a benefit and a good idea. A lot of the time it's an educational point.”
Steve Deverill, managing partner at Eton Bridge Partners, agreed. Backed by a PE firm themselves (Elysian Capital backed Eton Bridge in July 2021), Deverill observed that interim senior hires support the bigger picture plan the PE firm is trying to implement. “They [the management team] don't necessarily think of the bigger picture, because they spend so much time looking at their particular area.”
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Extract of an article written by Jennifer Forrest and published on RealDeals 28.06.2022
Read her article here, please click here