PE Gets Creative

Over $1.8T in PE portfolio assets have aged past traditional hold periods. Sponsors are turning to carve-outs, CV² structures, and AI to create liquidity and value in a constrained environment.

Scott EnglerSync Executive Partners · 2025-07-01

Over $1.8 trillion in PE portfolio assets have aged past traditional hold periods, with exit activity running at roughly $600B per year. The math doesn't work. Sponsors are responding with structural creativity — and the CFO is at the center of every structure.

Key Themes

Carve-Outs as the Playbook (S&P Global)

Carve-outs are now deliberate value creation levers, not fallbacks; $20B+ in Q2 deal value; require immediate CFO execution from Day 1. The CFO who can stand up a standalone finance function under pressure is the rarest talent in the market.

AI Expectation vs. Execution Gap (Accordion)

98% of PE sponsors expect aggressive AI implementation in their portfolio companies; 68% of portfolio CFOs lack clarity on where to begin. The gap between sponsorship intent and operating execution is the defining problem of 2025.

CV² Liquidity Structures (FT)

Continuation vehicles evolving to sell to multiple secondaries while retaining exposure; CFOs must manage the valuation complexity, audit requirements, and LP trust dynamics simultaneously.

Apollo AI Blueprint (MIT Sloan)

Apollo maps AI to value pools across portfolio operations; case studies show 5x ROI, 20%+ productivity gains, 65%+ procurement savings. The sponsor that builds AI capability at the portfolio level has a structural advantage.

Four Pillars of Agentic AI (McKinsey)

People, Technology, Data, Governance — the CEO must own the transformation, not delegate it. Rebuilding the operating model around AI agents is a leadership decision, not a technology decision.

Scott's TakeThe CFO sitting inside a CV or carve-out today is doing the hardest job in private equity. They're building the financial infrastructure of a company that didn't exist yesterday, under LP scrutiny, while managing an active value creation plan. The firms that have that CFO ready are winning.

LiquidityCarve-OutsAIContinuation Vehicles

Frequently asked questions

What distinguishes high-performing CFOs in PE-backed companies?

High-performing CFOs in PE-backed companies are distinguished by three capabilities: the ability to build a single trusted fact base that CEO, CFO, and sponsor all operate from; the ability to translate financial complexity into a board narrative that drives decisions rather than just reports results; and the ability to anticipate events — capital raises, compliance crises, leadership gaps — before they become reactive situations.

How should a PE-backed company prepare its finance function for a hold period?

In the first 90 days of a hold period, the finance function should establish a clean close cadence, build a reporting package that meets board and sponsor expectations, identify the key financial risks in the investment thesis, and assess whether the current team has the capability to carry the value creation agenda through to exit. Gaps identified early are fixable. Gaps identified at exit are expensive.