AM, HF --> Chief Financial Officer?

CHIEF FINANCIAL OFFICER... A totally different kind of career path from what us WSO monkeys normally dream about... but certainly a VERY attractive job, especially if this is possible when you're only in your early or mid 30's.

There are many skillsets an investment banker or a private equity professional can carry into becoming a Chief Financial Offer of a non-financial company.

But how about the financial markets professionals like the ones in Asset Management and Hedge Fund businesses?

What skillsets can AM and HF professionals carry into becoming CFOs of non-financial companies?

Is this even possible? Slim chances?
What are your thoughts?

Comments (13)

Jun 25, 2013 - 10:56am
CaR, what's your opinion? Comment below:
justin88:

Why would you want to be a CFO? The pay isn't that great, and you get to go to jail now if one of your underlings commits fraud.

Being the dictator of your company's capital structure and capital markets strategy would be, in my opinion, one of the coolest jobs out there. A company's executive management is the foremost thing any dilligent buyside analyst considers, whether it be a hedge fund, PE firm, or, likely most importantly, a VC fund, and, especially for public companies, represents an overwhelming deal of power and leadership. I imagine bringing a company public, and eventually to investment grade, is one of the best feelings ever for a CFO, and their involvement represents infinitely more value to shareholders than involvement with alternative investment vehicles (HF, etc...). I also respectfully disagree with your assertion that CFOs don't make good money. Sure, the top .1% of HF managers will make more than any CFO, but execs at large public firms regularly bring in $10mm+ a year including vested options, warrants, and whatnot. This is completely speculative, but I would imagine the average PM doesn't bring in much more annually than the average CFO of a public firm.

To address your question OP, I definitely think it's possible. Many former energy bankers find themselves in executive roles in energy firms (see: Antero, Apache, etc) because of their knowledge of M&A and corporate development. As a buyside analyst/PM, you should have an acute understanding of your coverage industry, and by extension, a grasp on how firms are structured and acquire capital from investors. Raising cheap debt/equity financing is perhaps a CFO's most important role for a growing company, something a buyside financier would likely understand thoroughly.

Jun 25, 2013 - 11:34am
EBITDAXYZ, what's your opinion? Comment below:
justin88:

Why would you want to be a CFO? The pay isn't that great, and you get to go to jail now if one of your underlings commits fraud.

you are definitely underestimating the pay.

Best Response
Jun 25, 2013 - 11:44am
yeahright, what's your opinion? Comment below:

Can't really see HF and AM guys as the environments are very different then a traditional corporate career. Only CFO I know in my network is CFO of an NYC F500 in the same sector that he worked IBD. Started as an analyst in IBD at a top tier BB and stayed for 25+ years all the way to MD.

Frank Sinatra - "Alcohol may be man's worst enemy, but the bible says love your enemy."
  • 3
Jun 29, 2013 - 9:36am
spark, what's your opinion? Comment below:

Are there really that much skillsets to transfer from being in AM/HF to being a CFO, even for a non-public smaller company? Any other skillsets from industry knowledge?

I love my bananas!

Jun 29, 2013 - 10:38am
Industry84, what's your opinion? Comment below:
spark:

Are there really that much skillsets to transfer from being in AM/HF to being a CFO, even for a non-public smaller company? Any other skillsets from industry knowledge?

IMHO the skillet is much more transferable to a Chief Investment Officer or VP of Investor Relations role, and most large public companies will look to people who were previously controllers, finance directors, and VP's of finance to fill the CFO role. Could be different for a small non public company and any industry knowledge would definitely be a plus, but AM/HF and CFO responsibilities are pretty different.

Jun 29, 2013 - 10:45am
ogofnyc, what's your opinion? Comment below:

Tons of cfo's of the top funds that I am aware of come from big 4 audit. Peep kkr's CFO. Other than that, if this is the path you want to take, I would say that the audit path in financial services will help you do this. I know some cfo's myself that all worked in the fso practice at E&Y.

Jun 29, 2013 - 8:50pm
spark, what's your opinion? Comment below:

So it seems that CFO role in a non-public company is not really a directly related exit option for investment managers in HF/AM.... Thanks guys ;)

I love my bananas!

Aug 4, 2013 - 5:34pm
BeastMode, what's your opinion? Comment below:

I know two people who have gone from buy-side straight to become CFOs. Thing I would say about this is that they didn't get into public markets investing so they could eventually make this transition. They got into it to stay in it and later had a change of heart about wanting to directly control the outcome of one company instead of passively investing in dozens. A former buyside analyst/PM also will be much better equipped than the average CFO at selling the story to the investment community in my mind. Ultimately you can 100% learn enough to be able to do this role, but I wouldn't recommend using this as the path to get there since there are several easier ways to get in (industry and working your way up, being a banker).

Aug 14, 2013 - 5:51am
spark, what's your opinion? Comment below:

A golden advice! I appreciate the intellectual perspectve/opinion. Thanks.

I love my bananas!

Aug 4, 2013 - 5:42pm
West Coast rainmaker, what's your opinion? Comment below:
ogofnyc:

Tons of cfo's of the top funds that I am aware of come from big 4 audit. Peep kkr's CFO. Other than that, if this is the path you want to take, I would say that the audit path in financial services will help you do this. I know some cfo's myself that all worked in the fso practice at E&Y.

Pretty much this. Big 4 is BY FAR the most common route. Keep in mind the CFO is not usually directly responsible for "finance" as we think of it (e.g. M&A strategy). They are responsible for budgeting, cost management, internal forecasts, financial reporting, etc.

Aug 14, 2013 - 5:54am
spark, what's your opinion? Comment below:

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I love my bananas!

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