With technological advances comes the need for skill sets beyond investment and finance. When asked if their workforce is ready to meet the current data literacy and technology requirements of their roles, the vast majority of CFOs feel that they are. Still, 52 percent of CFOs seek candidates with more data and analytics experience and 23 percent seek candidates with coding and programming skills, indicating that CFOs are focused on strengthening their staff’s technology literacy.
Unlike their peers in the hedge fund industry, PE firms have been slow to adopt robotics. The largest firms (by assets under management) are the furthest along in pursuing next-generation technology investments, as 52 percent are planning to make an investment in robotics, as compared to just 10 percent of the smallest firms. Still, an awareness gap exists. A staggering 60 percent of CFOs leading firms of all sizes are not aware of the breadth of robotics solutions available and their capabilities.
Often overlooked, outsourcing is a key competitive advantage for fighting margin compression.
Private equity firms have traditionally been hesitant to outsource, partly because of the limited availability of outsourced solutions, but the benefits to be reaped in cost savings are significant. Outsource providers are spending money to implement robust technology and supporting infrastructure to take operational burdens off of PE firms. This allows employees to pivot their focus from routine, time-consuming tasks to more value-added activities.
A majority of firms are already outsourcing some portion of their tax function (94 percent), compliance/regulatory reporting (73 percent) and fund accounting (55 percent). Yet, fewer than half of PE CFOs note that they are outsourcing activities such as investor relations, treasury, portfolio analysis, valuation, and accounts payable/time and expenses, leaving room for further cost savings opportunities.