Good morning. After a period of caution, private equity (PE) firms are ramping up investments, but they are now more selective, prioritizing resilient long-term opportunities in sectors such as technology, healthcare and energy. Meanwhile, CFOs of portfolio companies face increasing pressure from private equity sponsors to be “exit ready” and ensure their companies have AI-powered financial capabilities.
Accordion, a consulting firm specializing in private equity investments, released a report “Private Equity Exit Preparation”. Exit readiness refers to strategic preparation for a sale or public offering, emphasizing strong performance, solid growth potential and operational improvements to attract buyers.
Nearly all (97%) sponsors surveyed expect their CFOs to maintain an “exit-ready” posture, but only 20% said they actually do so. The majority (61%) only shift into exit mode when a sales window presents itself—sponsors say compressed sprints can reduce valuations by one to three times the exit multiple.
Sponsors define exit readiness holistically: positive value creation leverage, integrated systems and a credible equity story. However, CFOs surveyed tended to focus on tactical tasks such as due diligence packages and audit-prepared financial data. Only 32% include value creation in their definition.
More than 80% of sponsors want to start exit preparations 12 to 24 months before the sale, but half of CFOs start preparations only 3 to 6 months after the sale. More than 70% of sponsors said compressed preparations were associated with lower deal multiples, and 39% cited hasty exits as the reason for post-sale adjustments.
“With the Fed’s recent rate cuts, the resurgence of dry powder, and the potential for a multi-year exit cycle ahead, those who view preparations as a last-minute move may be missing out,” Accordion CEO Nick Leopard said in a statement.
The findings are based on a survey of 200 senior executives of private equity sponsors and 200 chief financial officers of private equity-backed companies with annual revenues in excess of $50 million.
Another key finding is the growing importance of AI: 85% of buyers now consider AI finance when evaluating companies. Sponsored CFOs who embed AI into planning, forecasting and reporting are twice as likely to achieve smoother exits and higher valuations, according to Accordion.
In private equity, financial leaders are under pressure to deliver double-digit returns every day and must be bold and proactive. CFOs surveyed cited common exit readiness challenges, including bandwidth constraints, fragmented systems, unclear sponsor expectations and a lack of prior exit experience—all of which sponsors said directly impact valuations.
Pamela Stern, managing director and head of business excellence at Accordion, suggests CFOs need “a playbook for continuous or ‘always-on’ exit preparation.” Stern said this requires building exit discipline into day-to-day operations, aligning sponsor and finance teams around shared value creation goals and ensuring optimization opportunities are not missed.
Cheryl Estrada
sheryl.estrada@fortune.com
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We’ll explore how leading CFOs are rethinking the future of work in the age of agent AI, including when to deploy AI agents to accelerate automation, how to balance ROI between human and digital talent, and the upskilling strategies CFOs are employing to optimize their future workforce.
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Ranking list
Michelle AllenChief Financial Officer and Head of Strategy Wyndham Hotels & Resorts (NYSE: WH) is leaving the company to pursue new career opportunities outside of the hospitality industry. Kurt Albert, currently treasurer and director of financial partnerships and planning, has been named interim chief financial officer, effective immediately. Wyndham plans a search for a permanent chief financial officer, which will consider both internal and external candidates. Allen will remain with Wyndham in an advisory role until the end of 2025.
Max Tunnicliffe Appointed Chief Financial Officer and Senior Executive Vice President fastener company (NASDAQ: FAST ), effective November 10. Tunnicliff most recently served as Chief Financial Officer of Beko Europe, a leading home appliance company. Previously, he held a variety of senior financial leadership roles at Whirlpool Corporation, including director of internal audit, vice president of strategy, and chief financial officer for Asia Pacific.
event
“Artificial Intelligence at Work: From Vision to Value” is a new report from software company monday.com, which partnered with Nielsen to survey 500 directors in the US and UK. Survey topics covered AI adoption drivers and AI usage sentiment, with the data combined with insights from monday.com workflows.
94% of directors say AI is already used across the organization, and more than half have it embedded in at least 50% of departmental workflows.
Leaders said their top motivations for adopting AI were speed, accuracy and productivity, but “innovation” didn’t crack the top five. Meanwhile, 40% cited privacy and security as key barriers to wider adoption.
Only 38% of respondents cited workforce reduction as a driver for adopting AI, while the majority said AI can help teams do less manual work and take on more strategic responsibilities.
Large organizations lag behind smaller companies in AI use per employee, with regulatory and ROI issues cited as the biggest obstacles, the report said.
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overheard
“We see wealthy people keep buying in cities because they miss the city — they miss the activity of the city.”
—Pamela Liebman, CEO of Corcoran Group wealth in interview. Liebman insists that the decision to move back to major metropolitan centers such as Manhattan has nothing to do with RTO It’s more about the fear of being left behind in an uncertain job market.