From scalability to strength - key priorities for the modern private fund CFO
Private equity and venture capital CFOs are operating in an increasingly complex environment. Fund structures are more sophisticated, reporting requirements are expanding and investor expectations continue to rise, often without a corresponding increase in internal resources. To manage this effectively, CFOs need a clear understanding of how to modernise their operating models in a way that supports growth, while at the same time, maintaining control and managing risk.
This requires a focus on the capabilities that matter most. But what are those capabilities and what should today’s private fund CFOs be prioritising when developing a scalable and resilient finance function?
Mastering data integration for smarter decisions
The role of data has never been more intertwined into private funds' day-to-day operations than it is today, and it will only grow as regulators, investors and internal stakeholders continue to seek more frequent and detailed information. CFOs will increasingly need to become data architects, tasked with identifying better ways to collect, analyse and present information to create a single source of truth.
This responsibility goes beyond traditional financial reporting. CFOs will be expected to lead the design of integrated data systems that collect information across fund accounting, valuations, risk, ESG and governance. This includes standardising data definitions and ensuring that every data point is traceable and well documented.
Advances in automation and artificial intelligence (AI) will become indispensable as the role of private fund CFOs evolve. CFOs will apply tools that automatically extract, classify and enrich data from multiple sources. For instance, moving towards dashboards and visual analytics platforms that deliver real time or near real time visibility into key performance indicators for internal and external stakeholders. Rather than static quarterly reports, CFOs will need to provide dynamic views into ESG progress, expense allocation trends, liquidity projections and governance scorecards, all powered by centralised, machine-enhanced data flows. These technologies will continue to help CFOs meet increasing demands with lean, efficient teams.
Scaling operations without scaling costs
Scalability will become central to private fund operations as firms adapt to larger asset bases, growing investor expectations and increasingly complex structures. CFOs will architect operating models and utilise technologies that enable their teams to achieve more with fewer resources.
Automation and AI will be central to this transformation. CFOs can use these tools to turn labour-intensive processes such as cash monitoring, document extraction, investor onboarding and regulatory reporting into streamlined workflows, which is critical as firms expand into new markets or introduce new strategies. This shift allows CFOs to redirect internal expertise towards analysis, forecasting and other strategic initiatives that support a firm's long-term ambitions.
Expense management will be at the centre of operational due diligence, placing new expectations on CFOs to deliver transparency into the way costs are allocated and monitored. Investors and regulators will expect clear visibility into how expenses flow through the organisation, from fund-level allocations to the treatment of co-investments and related vehicles. With the right tools, CFOs will be able to forecast spending patterns, analyse deviations and understand the drivers behind cost behaviour which supports better decision-making, all important factors that investors and regulators want visibility into.
As regulators increase their focus on data integrity, CFOs will need to continue to adopt technology-based solutions that support compliance, with automated controls, integrated data feeds and real-time reconciliation allowing CFOs to manage obligations more efficiently.
Leveraging external experience for operational agility
Experienced third-party specialists will play an increasingly important role in helping private equity and venture capital firms scale their middle- and back-office operations. As reporting requirements grow, structures become more complex and stakeholder expectations rise, firms increasingly rely on external expertise to enhance operational resilience and support long-term strategic goals. Outsourcing will continue to evolve far beyond a traditional cost-saving approach to a core component of a modern operating model that supports efficiency, transparency and risk management.
Specialist providers who can keep up with change will be best positioned to offer the infrastructure, technology and expertise required to manage a broad range of functions, including fund administration, management company accounting, fund governance, ESG reporting, regulatory compliance and SPV administration. By engaging external partners, CFOs can tap into institutional infrastructure to meet the demands of regulators and investors.
The use of hybrid outsourcing models like co-sourcing and lift-out structures will become even more valuable to firms seeking to maintain strong oversight while expanding their operational capacity. These structures enable CFOs to retain control of key processes while drawing on the scale, technology and infrastructure of an experienced external team. By transitioning internal functions to an established service provider, firms will gain access to institutional grade infrastructure and specialist talent while reducing execution risk and fixed costs.
Setting yourself up for the next decade
The role of the private fund CFO has evolved significantly over the past decade and is likely to change just as much over the next. The role has gone from one of accounting and reporting to one of data capture and visualisation. One thing will not change, however: the need to find new ways to handle growing demands more efficiently. This is where technology and expert outsourced help can truly add value.
Talk to us
TMF Group supports CFOs all over the world, providing global fund services, including fund administration, management company accounting, regulatory compliance, SPV management, and tailored co-sourcing solutions. With the right partner, CFOs can strengthen fund operations and reduce costs while delivering an institutional grade offering to investors.
