BOTTOM LINE UPFRONT
Private equity firms are back in deal mode—but with sharper selectivity and higher expectations for their portfolio CFOs. Accordion’s new report, Exit Readiness in Private Equity, reveals a widening gap between sponsor expectations and CFO preparedness: while 97% of sponsors expect “always-on” readiness, only 20% of CFOs operate that way. The firms and finance leaders winning in this new cycle are those embedding AI, data integration, and continuous value-creation discipline into daily operations—turning exit readiness from a one-time scramble into a sustained competitive advantage.
Private equity (PE) firms are ramping up investment after a cautious stretch, but they are now more selective, prioritizing resilient, long-term opportunities in sectors such as technology, health care, and energy. At the same time, portfolio company CFOs face growing pressure from PE sponsors to be “exit-ready” and to ensure their companies have AI-enabled finance capabilities.
Accordion, a consulting firm specializing in private equity, released the report “Exit readiness in private equity.” Exit readiness refers to being strategically prepared for a sale or public offering, highlighting strong performance, credible growth potential, and operational improvements to attract buyers.
Nearly all (97%) sponsors surveyed expect CFOs to maintain an “always exit-ready” posture, but only 20% of CFOs say they operate this way in reality. Most (61%) shift into exit mode only when a sale window appears—a compressed sprint that sponsors say can reduce valuation by one to three turns of the exit multiple.
Sponsors define exit readiness holistically: active value-creation levers, integrated systems, and credible equity stories. The CFOs surveyed, however, tend to focus on tactical tasks, such as diligence packs, audit-ready financials. Only 32% include value creation in their definition.
More than 80% of sponsors want exit prep to begin 12–24 months before a sale, yet half of CFOs begin just three to six months out. Over 70% of sponsors said compressed prep is linked to lower deal multiples, and 39% cite rushed exits as a cause of post-sale adjustments.
“With the Fed’s recent rate cut, a resurgence in dry powder, and a potential multi-year exit cycle ahead, those who treat readiness as a last-minute exercise risk missing the moment,” Nick Leopard, CEO of Accordion, said in a statement.
The findings are based on a survey of 200 senior executives at PE sponsors and 200 CFOs at PE-backed companies with annual revenues over $50 million.
Another key finding is the rising importance of AI: 85% of buyers now consider AI-enabled finance when valuing companies. Sponsored CFOs who embed AI in planning, forecasting, and reporting are twice as likely to achieve smoother exits and higher valuations, according to Accordion.
In the PE world, finance chiefs live with the daily pressure of achieving double-digit returns and must be bold and proactive. Surveyed CFOs point to common exit-readiness challenges, including bandwidth constraints, fragmented systems, unclear sponsor expectations, and lack of prior exit experience—all of which sponsors say directly impact valuation.
Pamela Stern, managing director and head of commercial excellence at Accordion, advised that CFOs need “a playbook for continuous or ‘always-on’ exit readiness.” This requires embedding exit discipline into day-to-day operations, aligning sponsors and finance teams around shared value-creation goals, and ensuring optimization opportunities are not missed, according to Stern.