Good morning. Private equity (PE) firms are ramping up investment after a cautious stretch, but they are now more selective, prioritizing resilient, long-term opportunities in sectors such as technology, health care, and energy. At the same time, portfolio company CFOs face growing pressure from PE sponsors to be “exit-ready” and to ensure their companies have AI-enabled finance capabilities.
Accordion, a consulting firm specializing in private equity, released the report “Exit readiness in private equity.” Exit readiness refers to being strategically prepared for a sale or public offering, highlighting strong performance, credible growth potential, and operational improvements to attract buyers.
Nearly all (97%) sponsors surveyed expect CFOs to maintain an “always exit-ready” posture, but only 20% of CFOs say they operate this way in reality. Most (61%) shift into exit mode only when a sale window appears—a compressed sprint that sponsors say can reduce valuation by one to three turns of the exit multiple.
Sponsors define exit readiness holistically: active value-creation levers, integrated systems, and credible equity stories. The CFOs surveyed, however, tend to focus on tactical tasks, such as diligence packs, audit-ready financials. Only 32% include value creation in their definition.
More than 80% of sponsors want exit prep to begin 12–24 months before a sale, yet half of CFOs begin just three to six months out. Over 70% of sponsors said compressed prep is linked to lower deal multiples, and 39% cite rushed exits as a cause of post-sale adjustments.
“With the Fed’s recent rate cut, a resurgence in dry powder, and a potential multi-year exit cycle ahead, those who treat readiness as a last-minute exercise risk missing the moment,” Nick Leopard, CEO of Accordion, said in a statement.
The findings are based on a survey of 200 senior executives at PE sponsors and 200 CFOs at PE-backed companies with annual revenues over $50 million.
Another key finding is the rising importance of AI: 85% of buyers now consider AI-enabled finance when valuing companies. Sponsored CFOs who embed AI in planning, forecasting, and reporting are twice as likely to achieve smoother exits and higher valuations, according to Accordion.
In the PE world, finance chiefs live with the daily pressure of achieving double-digit returns and must be bold and proactive. Surveyed CFOs point to common exit-readiness challenges, including bandwidth constraints, fragmented systems, unclear sponsor expectations, and lack of prior exit experience—all of which sponsors say directly impact valuation.
Pamela Stern, managing director and head of commercial excellence at Accordion, advised that CFOs need “a playbook for continuous or ‘always-on’ exit readiness.” This requires embedding exit discipline into day-to-day operations, aligning sponsors and finance teams around shared value-creation goals, and ensuring optimization opportunities are not missed, according to Stern.
Sheryl Estrada
sheryl.estrada@fortune.com
***Upcoming Event: Join us for our next Emerging CFO webinar, Optimizing for a Human-Machine Workforce, presented in partnership with Workday, on Nov. 13 from 11 a.m. to 12 p.m. ET. Speakers include: Nitin Mittal, principal, global AI leader at Deloitte and Thadd Stricker, CFO of INRIX.
We’ll explore how leading CFOs are rethinking the future of work in the age of agentic AI—including when to deploy AI agents to accelerate automation, how to balance ROI tradeoffs between human and digital talent, and the upskilling strategies CFOs are applying to optimize their workforces for the future.
You can register here. Email us at CFOCollaborative@Fortune.com with any questions.
Leaderboard
Michele Allen, CFO and head of strategy at Wyndham Hotels & Resorts (NYSE: WH), will be departing the company to pursue a new career opportunity outside of the hotel industry. Kurt Albert, currently treasurer and head of financial partnerships and planning, has been appointed interim CFO, effective immediately. Wyndham plans to conduct a search for a permanent CFO, which will consider both internal and external candidates. Allen will serve in an advisory role at Wyndham through the end of 2025.
Max Tunnicliff was appointed CFO and senior executive vice president of Fastenal Company (Nasdaq: FAST), effective Nov. 10. Tunnicliff most recently served as CFO of Beko Europe, a leading home appliance business. Previously, he served in a variety of senior finance leadership roles with Whirlpool Corporation, including head of internal audit and VP of strategy, and CFO of the Asia Pacific region.
Big Deal
“AI at work: From vision to value” is a new report by software company monday.com, which partnered with Nielsen to survey 500 directors across the U.S. and U.K. The survey topics ranged from AI adoption drivers to emotions about AI usage, and the data was paired with insights from monday.com workflows.
Ninety-four percent of directors said AI is already in use across their organizations, and for more than half, it’s embedded in at least 50% of departmental workflows.
Leaders say their top motivators for adopting AI are speed, accuracy, and productivity, but “innovation” isn’t listed among the top five. Meanwhile, 40% cite privacy and security as the main barriers to broader adoption.
Only 38% of respondents cited labor reduction as a motivator for AI adoption, while most say AI helps teams reduce manual work and take on more strategic responsibilities.
Large organizations are lagging behind smaller companies in AI usage per employee, with regulatory and ROI concerns cited as top barriers, according to the report.
Going deeper
Overheard
“We see wealthy people have been buying back into cities because they miss them—they miss the action.”
—The Corcoran Group CEO Pamela Liebman told Fortune in an interview. Liebman insists that the decision to move back into major metropolitan hubs like Manhattan has less to do with RTO and more to do with a fear of being left behind in an uncertain job market.
