June 9, 2026 | Our Thinking
Current Demands of Luxury Retail Leaders
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Private equity’s return expectations in manufacturing have shifted structurally. The deals being written today require annual EBITDA growth of 10 to 12% to produce a 2.5x return that once needed only 5%.¹ That calculus has changed what the CFO role demands, and many firms are slower to recognize it than the market requires.
The portfolio companies performing well are not distinguished by better capital structure or more favorable end markets. The differentiator is financial leadership that operates more like an owner than a function head. That distinction is where searches tend to succeed or fail. |
The Market Today
Manufacturing remains a compelling target for private equity. Total PE deal value reached $2.6 trillion in 2025, up 19% from 2024, with buyout deals above $500 million rising 44% to the highest level on record.² The recovery is concentrated: fewer transactions, larger scale, longer hold periods and a liquidity challenge that has redirected sponsor attention toward operational performance.
The sectors drawing consistent interest are those with defensible positions in domestic production, automation and the infrastructure buildout around energy transition and defense. The through-line is not sector. It is whether a leadership team can drive sustained EBITDA improvement across a multi-year hold, and that question starts with the finance leader.
Beyond the Finance Function
From Steward to Operator
The CFO role in a PE-backed manufacturing firm has been redrawn, and the gap between what firms believe they want and what they need continues to widen. As John Nimesheim observed in his recent examination of industrial leadership, companies entering a search too often build a candidate profile around the last person in the role rather than the demands of the role today. That pattern holds in the CFO function as much as anywhere in the org chart.
First-time CFOs often bring a willingness to engage at the operational level that more tenured executives have trained themselves away from. Those who have stayed close to execution throughout their careers are the exception and rewarded in the current environment. Direct involvement in cash management, working capital optimization and financial modeling that underpins acquisition integration or carve-out planning is the expectation, not a differentiator. Firms that underestimate this and hire for credentials alone tend to find themselves back in search within 18 months.
Finance in the Age of AI
In PE-backed manufacturing, AI implementations that work see productivity gains of 50 to 70% concentrated rather than distributed across the finance function.³ This gap is typically an organizational problem, and the CFO is accountable for closing it.
The CFO’s role is not advocacy for adoption. It is identifying where AI creates measurable value in forecasting, receivables and cash visibility and building the operating model designed to capture that value. PE investors are increasingly able to distinguish between a portfolio company that has layered tools onto existing processes and one that has genuinely restructured how finance operates. CFOs who can demonstrate the latter are earning the strongest executive search mandates.
The Alignment Problem |
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| The pace of technological transformation has outrun most hold period models. COOs are under pressure to demonstrate operational improvement on timelines that demand a finance function already operating at full capacity. The CFO’s credibility in that room depends on translating financial reality clearly and quickly, without softening the picture for an investor base that expects both.
Pre-search alignment on what the CFO role requires is one of the most undervalued parts of the hiring process. Long-standing assumptions about the function, held by board members, operating partners and co-investors alike, rarely reflect what a business in year two of a PE hold actually needs. Surfacing those assumptions before a search begins prevents an expensive and disruptive early mismatch. |
“The CFOs who get this right are not the ones chasing every new tool. They are the ones who know exactly where in the business AI can close a gap that matters to the investor, and they can defend that decision with numbers.
Many portfolio companies we work with are not sophisticated from a technology perspective but are opportunistic in modernizing to produce efficiencies and better returns.”
– Dan Dunn, Executive Vice President |
Compensating the CFO as a Value Creator
Performance-based structures are standard in this market, with annual incentives for CFOs typically ranging from 40 to 60% of base salary tied to specific operational milestones, working capital improvement, reporting cycle compression and EBITDA forecast accuracy, rather than broad financial metrics. Equity participation remains a substantial component of total compensation, particularly in earlier-stage platform companies where the value creation runway is longer and the CFO’s influence on outcome is most direct.
Compensation design does more than align incentives. When the CFO’s economic outcome tracks directly with the investor’s value creation plan, the function stops operating as a reporting layer and starts operating as a principal. Accountability becomes structural rather than managed, and misalignment between what the investor needs and what the CFO delivers surfaces faster than any formal review process would.
A Tight Market and a Short Window
The candidate market for CFOs in PE-backed manufacturing is persistently tight. Demand is elevated, internal talent pipelines in most portfolio companies are thin and average tenure in these roles is short. CFO placements in PE portfolio companies are predominantly external hires, at a rate nearly double that of the broader S&P 500 market.
Firms that wait until a vacancy forces the search are operating at a structural disadvantage. The best-run PE sponsors maintain a working understanding of the candidate market, know what the next finance leader needs to look like and build search relationships before the seat is empty.
Looking AheadThe return environment demands financial leaders who can step into a business quickly, operate with credibility at the ownership level and drive value creation without a long runway to productivity. Those executives exist. The window to find them, before urgency sets the terms, is narrower than most firms realize.
Slayton Search Partners has worked alongside PE firms and their manufacturing portfolio companies for more than four decades, placing the financial leadership these businesses require at every stage of the hold. |
SOURCES
(1) Bain & Company, Global Private Equity Report 2026
(2) McKinsey & Company, Global Private Markets Report 2026
(3) KPMG, Leading the AI Value Chain, 2026
