Private equity finance and operations considerations

Priorities for new and growing private equity firms

By Jason Menghi, Frank Fumai & Katie Spinello Apuzzo, Deloitte

The alternative investments industry is soaring, with assets under management expected to reach $20 trillion by 2025.1 The rapid growth in private equity (PE) attracts and rewards new PE fund managers. Taking advantage of opportunities requires leaders to delve into areas that may be new to them—specifically finance and operations (F&O).

Taking inventory of private equity finance and operational requirements

From our experience advising new and early-stage private equity funds and firms, we’ve found that leaders often underestimate the time and effort required to initiate the F&O processes of their new business. They may also be less familiar with finance and private equity compliance leading practices. Underinvestment in these critical functions can create significant risk to the success of the firm.

10 finance and operations leading practices for early-stage private equity firms

We’ve assembled a list of 10 finance and operations requirements that early-stage PE firm leaders should consider in their journeys. These F&O leading practices are by no means an all-inclusive road map or checklist of everything firms would need to consider. Fast-moving, impactful changes—such as diversity, equity, and inclusion; sustainability; digital assets; and talent considerations, for example—are PE hot topics that could each generate a thought piece on its own. However, the following areas are the 10 we think should be top of mind during the ramp-up phase for early-stage PE firms.