Though a competitive sector, private equity can offer rewarding careers for those who have a passion for financial investment and are willing to work hard. As a CFO in the private equity space, Gary McGaghey is familiar with the fast-paced industry and the unique challenges involved in a financial leadership role.
For those looking to advance in private equity and become CFOs, Gary McGaghey shares eight Private Equity Strategies to Help CFOs Thrive.
Gary McGaghey’s insights into recruiting private equity talent
As group CFO of Williams Lea Tag, Gary McGaghey oversees financial plans for the €1.3 billion end-to-end marketing production and business services group. He works to expand the value of the firm’s holdings and directs investment decision-making operations. He is also responsible for the group’s skilled finance team, which he spent three years recruiting and refining.
Gary McGaghey explains that it can be difficult to source and retain strong talent in private equity. His biggest recruitment challenge in the sector has been a high employee churn rate. An Ernst & Young survey highlights this challenge, having found that 82% of private equity CFOs have difficulty retaining talent. Losing even one person in a senior position can prove particularly taxing for a firm.
Although many believe they suit the challenge of working in private equity, Gary McGaghey notes that only some individuals stay in the sector long-term. He emphasises the importance of quickly sensing whether people are the right fit and working to retain good-fit employees.
Eight characteristics of a successful private equity CFO
According to Gary McGaghey, while private equity roles can be demanding, the sector could be ideal for those seeking excitement and variety in their work. These are his eight traits of successful private equity CFOs.
1. Broad financial experience
Entering a private equity role typically requires experience in the broader financial industry and a bachelor’s degree in accounting, economics, finances, or a related field.
Technically, the experience gained from any finance leadership role could prepare an individual for a role as a private equity CFO. However, what sets private equity roles apart from those in other financial areas is the wide scope of daily work. Due to the comprehensive nature of a private equity role’s remit, broad experience is essential.
Gary McGaghey explains that this is why the average age of a CFO is higher in private equity, as individuals require greater experience across a range of financial areas.
2. Able to take on high levels of responsibility
Unlike other industries, where a CFO may have support systems to rely on (for instance, to help with treasury), private equity CFOs rarely have these support systems and must take full accountability for the operations under their control.
While this may be too much pressure for some, a successful private equity CFO will rise to the challenge and welcome a higher level of responsibility.
3. Secure enough to ask for help
Sometimes, those who are less secure about their leadership abilities, no matter their technical skill, don’t feel confident asking questions or seeking assistance. While this strategy might protect a CFO’s image for a short time, soon, the lack of support could lead to a breakdown in leadership.
Even the most experienced leaders sometimes need support: A CFO must be secure enough to say when they’re struggling and ask for help. This may involve securing advice from expert outsider consultants (for instance, one of the big four accounting firms) or asking higher-level management for support in hiring new talent or implementing a new strategy.
4. Happy embracing risk and uncertainty
Every day presents new experiences and a fresh set of challenges for CFOs. This is particularly true in private equity, where businesses often deal with prolonged periods of intense change.
Gary McGagey explains that you’ve got to be comfortable with uncertainty to do well as a private equity CFO. Rather than attempting to control uncontrollable factors, a successful CFO accepts and embraces risk and unpredictability.
5. Comfortable with less structure
Many people crave some degree of structure in their work, seeking a workplace with a management style that isn’t overbearing or standoffish. As a result of private equity’s variable nature, a CFO role in the sector means working in an environment that tends to lack structure and has minimal direct instruction on how to operate.
According to Gary McGaghey, it takes a specific type of person to thrive in such an unstructured environment.
6. Highly resilient
As private equity CFOs manage environments with high levels of uncertainty and variability, they must be resilient. While the variety of such a role is appealing, this variety can also be tiring. Resilience is key to ensuring CFOs don’t experience burnout.
On top of this, resilience correlates to greater job satisfaction, happiness at work, and employee engagement. It can also boost self-esteem, cultivate a sense of purpose in work and life, and improve interpersonal relationships with colleagues.
7. A confident leader
Confidence is crucial for any successful leader, whether in private equity or elsewhere. Private equity relies heavily on the strength of its CFO: For private equity firms, having confidence in the CFO is crucial. If a company loses confidence in their CFO, which can happen quickly, management will likely find someone to take over the role. Gary McGaghey Shares Advice on How Private Equity CFOs Can Become CEOs.
8. Works well with others
While a CFO should be a strong leader who thrives when working independently, it’s just as important that they have good interpersonal skills. Private equity investing is a team effort: A CFO role involves managing the individuals in a team and interacting with external finance professionals and personnel.
A CFO should have a range of people skills to draw on, including being adept at management, communication, negotiation, and networking. These skills will help when navigating others’ unique personalities, strengths, and weaknesses.
Gary McGaghey’s Approaches to Help Business Leaders Accomplish Cash Excellence
About Gary McGaghey
Gary McGaghey is an experienced CFO and group CFO who has helped several international organisations achieve optimal outcomes. In 2019, he joined Williams Lea Tag (which the private equity firm Advent International owns). As the company’s group CFO, he oversees mergers and acquisitions (M&A), cost restructuring, divestitures, and carve-outs.
Previously, he has worked at:
- Robertsons (1993-2022): Gary McGaghey held several positions at Robertsons, including chief commercial officer, CFO, and vice president of group logistics, working with Robertsons Foods, Robertsons Homecare, and Baker Street Snacks. He was also chairman of the Audit Committee and a group board member.
- Unilever (2002-17): During his time at Unilever South Africa, Unilever PLC in London, and Pepsi Lipton International in Geneva, he served as vice president of finance, CFO and group CFO, and interim CEO of the various subsidiaries in South Africa. In 2002, he took on the role of Unilever global mergers and acquisitions vice president in London, before becoming CFO of the newly established global business services operations. His last role with Unilever was as Pepsi Lipton International’s joint venture global CFO.
- Nelsons (2017-19): Gary McGaghey also worked at Nelsons for two years, serving as the company CFO, statutory director, company secretary, and executive board member.
Get more private equity advice from Gary McGaghey.
For businesses unable to afford a full-time CFO but still in need of high-level financial expertise, another option is to hire a fractional CFO. This provides the benefits of a seasoned financial executive on a part-time basis, ensuring your business receives the strategic guidance needed without the full-time cost commitment
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