JULY 1, 2025 – NEW YORK – A full three-quarters of private equity (PE) sponsors say their portfolio company CFOs are not meeting expectations, according to a newly released survey by Accordion, a financial consulting firm focused on private equity. Findings from the firm’s fourth biannual survey, The State of the PE Sponsor & CFO Relationship, reveal three main reasons sponsors say their portfolio CFOs are underperforming: they’re struggling with the finance fundamentals, they’re not prioritizing performance/value creation, and they’re not getting exit-ready with enough urgency.
Read the full survey.
“We are in a very different market than we’ve been in during previous iterations of this survey. Not only can firms no longer rely on ever-expanding multiples, but they are now also facing tariff whiplash and recessionary fears,” said Nick Leopard, Founder and CEO of Accordion. “So, it’s no surprise that sponsors are demanding that their portfolio CFOs start fixating on performance.”
Continued Leopard: “To weather tariff uncertainty and potential revenue concerns ahead, sponsors want their CFOs to focus on identifying every single thread of hidden value. Of course, this includes the real needle-moving levers, like tech-enabling the function, leveraging predictive analytics, and marrying operational and financial data for more dynamic forecasting. But sponsors also know that to reach those needle-moving levers, their CFOs first need to perfect the basics.”
The 2025 survey reveals that CFOs have not perfected those basics yet—and that is resulting in some concerning misalignment around priorities for the year ahead. CFOs polled plan to prioritize the more forward-leaning value creation levers, but their sponsors want them to first focus on capturing lost value by streamlining FP&A workstreams like the month-end close process.
Given both the misalignment and the underperformance, the survey found that 77% of PE-backed CFOs continue to be plagued by significant job insecurity.
Additional key takeaways from the 2025 survey include:
- Finance fundamentals:
- 74% of sponsors say portfolio CFOs are not meeting expectations, and most CFOs (73%) know it.
- CFOs mistakenly believe the reason sponsors think they’re underperforming is that they’re not excelling at forward-leaning finance responsibilities (like dynamic forecasting and the integration of financial and operational data).
- Sponsors, however, are frustrated by CFOs’ inability to nail the basics that will then allow them to prioritize the more needle-moving value creation levers. Those basics include leading an efficient close and effectively integrating transactions.
- This sponsor focus on fundamentals extends to what PE-backed CFOs should consider their finance function priorities for 2025.
- Sponsors say that in this era of constrained multiples and recessionary fears, they need their CFOs to drive and protect value using PE’s primary levers: improved working capital and reduced costs.
- Value creation/performance:
- 98% of sponsors believe that with limitations on multiple expansion, finance teams need to focus on performance/value creation more than ever.
- But 72% of sponsors say their CFOs are not measuring up to performance expectations.
- Optimal exit returns are not the only thing driving sponsors’ focus on performance—it’s also fundraising: 95% say it’s more important than ever to communicate to LPs the value creation levers being pulled across their portfolio.
- When it comes to specific value creation levers, given the tariff landscape sponsors would like their portfolio CFOs to focus more on operational levers, which is something that hasn’t always been a part of the CFO’s jurisdiction. and process levers. They also want them to remain doubled-down on digital levers.
- While CFOs are aligned in prioritizing operational levers, as well as process levers for enhanced efficiency in a recessionary environment, digital levers are noticeably absent from their list.
- That is concerning for sponsors who recognize the importance of digitization not only to performance, but also to fundraising: portfolio adoption of emerging technologies like AI is now a critical part of a successful LP pitch.
- Exit readiness:
- Almost all sponsors (98%) believe that at some point soon, companies will be forced to exit in order to return money to LPs. This will demand a more accelerated sell-side process, as will the newfound focus on quickly divesting non-core assets in a pre-recession environment.
- But 76% of these sponsors do not believe their portfolio CFOs are exit-ready.
- Why? Sponsors say CFOs are not effectively integrating acquisitions, are starting the sell-side process too late (instead of doing it in tandem with value creation initiatives), have not rationalized disparate tech platforms, lack a future value roadmap for potential buyers, and haven’t harmonized finance and operational metrics.
- Instead of rushing a sell-side process, most sponsors (80%) want their CFOs to operate as if the company is always for sale, so they can take advantage of any window of opportunity in the market.
- Unfortunately, only 20% of sponsors say their CFOs operate this way.
- Misalignment around what should be the CFOs’ north star may be to blame:
- 66% of sponsors want their CFOs to prioritize equity value, even if it means sacrificing yearly performance.
- But only a minority of CFOs (36%) prioritize equity value over meeting year-end budget goals.
Concluded Leopard: “The combination of unmet expectations and priority misalignment does not bode well for the complexities of a new tariff-heavy market with more limited multiples and accelerated exits. But CFOs and sponsors can use the takeaways outlined in our survey report to bridge misalignment, navigate tariff and recessionary turbulence, and build a lasting partnership to drive value creation. CFOs should use these next few months to proactively articulate their value creation and protection strategies for unearthing hidden EBITDA, while tackling sell-side readiness initiatives in tandem with pulling performance-enhancement levers. Likewise, sponsors need to give CFOs permission to make equity value their ultimate north star.”
The survey was conducted with 200 private equity (PE) sponsors (senior executives) and 200 chief financial officers (CFOs) at private equity-backed companies with $50 million or more in annual revenue. The CFO and PE sponsor samples were collected/finalized in April 2025.
About Accordion
Accordion is a financial consulting firm uniquely focused on private equity. Rooted in data and technology, Accordion’s expertise lives at the intersection of sponsors and PE-backed CFOs. Our team helps drive value creation for clients, with services supporting the Office of the CFO across all stages of the investment lifecycle—including foundational accounting, strategic financial planning and analysis enhancement, CFO-led performance, transaction support, and turnaround and restructuring solutions. All of Accordion’s services are powered by deep expertise in data and analytics, CFO-specific technology, and finance-led transformations. Accordion is headquartered in New York with ten offices around the globe.