CFO Studio Magazine with David Chambers, CFO, Jaguar Land Rover NA

EVENTS The comments made by these guests are their own and may not reflect the opinions and/or policies of their companies or of CFO Studio, and/or its promotional partners. 36 WWW.CFOSTUDIO.COM 3rd QUARTER 2016 EXECUTIVE DINNER SERIES I n general, being a CFO is a lot harder than it used to be,” says Howard Reba, Finance Director – Portfolio Operations at Marlin Operations Group, Inc., an exclusive consulting firm affiliated with Marlin Management Company, LLC, based in Hermosa Beach, CA. “CFOs today have their hands in so many things that used to be relegated to other people, and over time, the job has become much more complicated.” And this holds especially true, he points out, for the CFO of a company that is owned by a private equity firm. Mr. Reba spoke onThe Private Equity CFO —Challenges and Opportunities, at a Small Market and Emerging Growth Companies CFODinner, part of CFO Studio’s Executive Dinner Series, held recently at Roots Steakhouse in Morristown, NJ. He began the discussion by asking the attendees what they felt were some of the different challenges the CFO at a private- equity-backed company faces. By an overwhelming margin, the response was the “virtually insatiable demand for information and insight” from the private equity group (PEG), he reports. Attendees questioned what PEGs do with that high volume of facts and figures, and were surprised by the simplicity of his answer: “PEGs use the information they receive from their portfolio company CFOs to make decisions and pull different levers, much the same as any company does.”The group seemed to be hoping for a more complex explanation, so Mr. Reba added, “[A PEG] can only pull the same levers any company can, though it does bring additional resources, experience, and insight to help evaluate alternatives and make decisions.” As a matter of fact, Mr. Reba shared that he insists the reporting to the PEG and to the management team be aligned because they should both be interested in the same things. Short Time Horizon Another difference discussed related to how strategic planning is particularly tricky in the private equity environment where CFOs deal with a shorter or more defined time horizon. “[PEGs] typically target selling their portfolio companies after four or five years, which greatly impacts decisions involving investments, especially in infrastructure matters,” said Mr. Reba. The challenge of having “two bosses” was discussed, as private-equity-backed CFOs are usually accountable to both the CEO of the portfolio company and the Board, which is typically controlled by the PEG. Mr. Reba advised CFOs in this spot to be “always conscious of the potentially competing priorities of the CEO and the Board.” While many companies have matrixed organizational structures today, CEOs in the Ownership Issues A PRIVATE-EQUITY-CONTROLLEDCFO JOB IS NOT AN EASY POST, BUT IT CAN PAY OFF Neil Glasser Chief Financial Officer MJH Associates, Inc. Louis Mattina Finance Executive John Breeman Chief Financial Officer Voltari Corporation Marty Latman Chief Financial Officer Prestige Industries, LLC Gregg Kam Chief Financial Officer Sonneborn Glenn Turell Chief Financial Officer Elias Arts Holdings, LLC Steve Heumann Senior Finance Manager, York Risk Services Group Tobey Rumack Chief Financial Officer Universal Marine Medical Supply International, LLC Chris Krasas Chief Financial Officer Carl Stahl Sava Industries Vinnie Tuzzio Chief Financial Officer Samaserve, LLC Allen Lane Chief Financial Officer Solix Keith Bernius Vice President Finance LEO Pharma Howard Reba Finance Director – Portfolio Operations, Marlin Operations Group, Inc. Discussion Leader MEETING PARTICIPANTS L. to R.: Discussion leader Howard Reba, Finance Director – Portfolio Operations at Marlin Operations Group, and Andrew Zezas, host BUSINESS DEVELOPMENT PARTNER