JSS Treasury recently hosted a roundtable exploring the evolving role of Treasury in private equity-backed businesses. The conversation centred on how the landscape has changed over the past decade, where Treasurers are adding value and what professionals should consider before moving into a PE-backed environment.
A clear theme emerged: Treasury’s influence is growing. From financing and risk management to governance and preparation for a future sale, the function is becoming an increasingly important strategic partner to the CFO and the wider business.
Below are some key themes and experiences shared around the table:
A changing landscape for Treasury
Treasury opportunities have broadened over the past decade. While FTSE 250 companies and large financial services institutions have traditionally been major employers, PE-backed businesses have become an increasingly significant part of the market.
Growth in the number of PE firms, alongside challenging IPOs and reduced appetite for taking businesses public, has contributed to this shift beyond traditional listed-company roles.
Carve-outs and disposals create a particularly immediate need for Treasury expertise. A business separating from its parent must establish the governance, controls and capabilities previously provided by a Group Treasury function.
Covid brought Treasury’s contribution into sharper focus. Interest rate volatility and geopolitical uncertainty have since reinforced the need for specialist expertise, with responsibilities previously held by the CFO increasingly moving into a dedicated Treasurer role.
Growing portfolios add another pressure. PE firms may have limited capacity or Treasury expertise available to support each business directly, strengthening the case for building capability within portfolio companies.
From back office to boardroom
As the business environment has become more complex, Treasury’s remit and standing have evolved.
Payments and liquidity management remain fundamental. Alongside these responsibilities, Treasurers are helping shape decisions with a direct impact on business performance.
Three areas illustrate that contribution:
- Interest rate management and refinancing. In highly leveraged businesses, interest costs can place substantial pressure on cash flow, particularly where exposure has not been hedged.
- Foreign exchange risk. Geopolitical uncertainty and currency volatility increase the importance of specialist FX management.
- Funding structures. Complex funding arrangements between PE firms and their portfolio businesses require dedicated expertise and oversight.
This broader remit brings Treasury closer to senior decision-making. Reporting directly to the CFO, rather than through a Financial Controller or Finance Director, gives Treasurers greater scope to influence the business’s direction.
The roundtable also highlighted rising Treasury remuneration in recent years, reflecting the value placed on this expertise and the function’s growing influence.
A longer horizon for investment
Longer ownership periods are changing how Treasury plans and invests. Experiences shared at the roundtable indicated that some holding periods were extending beyond the traditional three-to-five-year horizon, towards five to seven years.
A longer timeframe creates more scope for initiatives whose benefits take time to realise. Investment in a Treasury management system (TMS), for example, may be easier to justify when there is a longer period to benefit from stronger data integrity and improved processes.
AI also formed part of the conversation about future investment, alongside the importance of reliable underlying data.
At the same time, risk management, governance and control remain central priorities. Businesses still need to keep a close eye on liquidity, while a move towards centralised Treasury functions places greater emphasis on consistent oversight and processes across the organisation.
Building a roadmap towards exit readiness
A longer ownership horizon still requires a clear plan for a future sale.
Treasurers entering a PE-backed business are increasingly expected to establish a roadmap for the early years of the role, with defined priorities and milestones that support exit readiness.
Understanding what needs to be achieved, and how Treasury contributes, is a valuable capability for the CFO and wider leadership team. It connects the function’s work to the objectives of the ownership cycle and provides a clear basis for measuring progress.
For Treasurers considering a move, a track record of delivering against these milestones can be an important part of demonstrating their suitability for the role.
Considering a move into a PE-backed business?
Moving from a listed company into a PE-backed environment can bring a significant change in pace, expectations and resources. Three questions are particularly useful when assessing an opportunity.
- How quickly will you be expected to add value? Understand the immediate priorities and what you will need to deliver. The pace can be one of the biggest adjustments from a listed-company environment.
- What does success look like? Establish whether the CFO and PE firm have clear expectations of Treasury. In an environment shaped by refinancing and sale milestones, priorities and annual deliverables can differ considerably from listed-company reporting and shareholder expectations.
- What resources will you have? Clarity about the team, systems and external support available. Cost remains a significant consideration, and there may be an expectation to deliver more with fewer resources.
Clarity on these points helps establish whether the ambitions for Treasury are matched by the support available to achieve them.
Finding the right Treasury expertise
JSS Treasury has partnered with PE firms and their portfolio businesses to find the right people for their Treasury teams.
Understanding the demands of the ownership cycle, the priorities of the CFO and the resources available helps us identify the experience and capabilities each business needs.
To discuss your Treasury hiring requirements, or explore opportunities within PE-backed businesses, get in touch with our Treasury team.
