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The Execution Era

Updated 1 March 2025

The deal market may be thawing but exits remain stalled. PE firms are shifting back to operational fundamentals, tighter ROI, AI adoption in finance, and more strategic CFO leadership.
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Scott EnglerAveran · 2025-03-01

The deal market may be thawing, but exits remain stalled. After years of elevated multiples and easy leverage, PE firms are navigating a fundamental shift: operational value creation is no longer a differentiator, it is the baseline.

The main themes

PE Recovery Signals (Bain)

Global exit value rose 34% YoY to $468B; exits up 22% to 1,470, but recovery is uneven. Middle market lagging large-cap recovery significantly.

Dry Powder Pileup (PitchBook)

Investment rate fell to 18% over 12 months; LPs growing anxious about prolonged capital idleness. The pressure to deploy is real, but so is the pressure to deploy wisely.

Middle Market Comeback (PitchBook)

Record rebound in 2024 deal value; 5,000+ unsold PE-backed companies still in portfolios, many 5+ years held. The overhang is massive, and buyers know it.

5 Keys for PE-Backed CFOs (Accordion)

Focus on exit equity, not just EBITDA. Frontload talent. Invest in tech and data infrastructure. Align early with sponsors on the full value creation plan.

CFO Velocity (CFO.com)

Speed, clarity, and AI training are now critical CFO competencies. Simplify finance processes for faster decision-making. The CFO who can compress decision cycles creates compounding organizational advantage.

CFO Profiles (CFO.com)

Three emerging archetypes: Expander, Catalyst, and Protector, each with distinct strategic orientations. The profile that fits a carve-out looks nothing like the profile that fits an organic growth story.

Scott's TakeThe firms winning right now are the ones who treated the slow exit market as a preparation window, not a waiting room. That preparation shows up in CFO quality, operating cadence, and the ability to tell a clean financial story under scrutiny.

The Execution Shift

From 2010 to 2021, roughly two-thirds of PE value creation came from leverage and multiple expansion, factors outside any manager's control. That window is closing. The margin between top- and bottom-quartiles funds now tracks directly to operational execution quality.

PE firms are responding by investing earlier in CFO talent, building operating partner capacity, and demanding more rigorous VCP discipline from day one of ownership. The companies that built execution infrastructure during the slow market are the ones that will clear cleanly when the exit market opens.

Private EquityCFO StrategyExecutionAI in Finance

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What happens next

Reading about it and having it done are different things. Here is exactly what happens if you want the second one.

  1. The call, twenty minutesYou describe the business and where the numbers are letting you down. We tell you honestly whether we can help, and what we would start with. No pitch deck.
  2. We look at the fileYou give us read access to the books as they are. We come back with what is wrong, what it will take to fix, and whether the answer is bookkeeping, controller work, or something else.
  3. A written scope and a priceWhat we do each month, what you get, the date it lands, and the fee. Agreed before anything starts, and it does not move without you agreeing it.
  4. Transition, then the first closeAccess, systems, and the opening balances. The first close lands on the date in the scope, and every one after it does too.
Start with the call →How an engagement runs

Averan is not a CPA firm and does not file taxes. Your CPA keeps that, and we keep the books they file from.

Related pages

Sync-Align™, Org Assessment CFO Deployment Models GovCon Fractional CFO Meet the Team

Questions we get asked

What is the most common alignment gap in PE-backed portfolio companies?

The most common alignment gap in PE portcos is between PE sponsor priorities and management execution. Sync-Align data across 29 respondents identified sponsor and strategy alignment as the pillar with the widest gap between criticality and effectiveness. Management teams often have a different understanding of the investment thesis than the sponsor, which produces execution drift that compounds over the hold period.

How do you build alignment between a PE sponsor and a portfolio company management team?

Alignment is built through structured assessment, not an offsite or a strategy deck. Surfacing internal viewpoints against the specific investment thesis, not peer benchmarks, identifies where management and sponsor assumptions diverge. Run the sessions and the team decides together what comes first. The output is an operating system the team uses on Monday morning, not a document filed after the retreat.