By Alex Jillions, Partner & Head of Interim North America, Finatal
As we move into the second half of 2026, one question comes up repeatedly from our clients in North America: why is demand for interim executives so strong right now?
Across the market, we’re seeing sustained demand for experienced interim CFOs, transformation leaders, operators, and technology executives. That demand isn’t cyclical; it’s being driven by a set of structural shifts across the private equity market.
We’re seeing trends – longer hold periods, fundraising pressure, valuation gaps, and increasingly complex buy-and-build strategies – that are symptoms of the same challenge: sponsors need to create more value from existing portfolio companies while waiting longer to realize it. That’s fundamentally an execution challenge.
Put simply, sponsors are under increasing pressure to create value from the companies they already own. That is driving demand for leaders who can step in quickly, solve problems, and deliver outcomes.
Here’s how we’re seeing that play out:
1. Investors want cash returns (not just paper gains)
Industry data shows distributions remain well below historic norms. Five-year rolling DPI reached its lowest recorded level in 2025 according to McKinsey’s Global Private Markets Report 2026, while global distribution yields remain well below the levels seen through much of the previous decade. The implication is simple: investors are placing greater emphasis on realized cash returns than unrealized value.
Why it matters
Firms are focusing more heavily on exit readiness: improving EBITDA quality, strengthening reporting, tightening working capital, and building a credible performance story.
These are time-sensitive priorities and often require specialist expertise.
How interim leaders help
Interim CFOs and transformation leaders are typically brought in to accelerate this process, compressing the time between “hold” and “harvest.”
Increasingly, we’re seeing these appointments tied directly to exit-readiness initiatives. Sponsors are looking for leaders who can improve reporting, strengthen financial controls, enhance cash visibility, and help craft a credible equity story. In many cases, the mandate is linked to a clear transaction or refinancing objective rather than day-to-day business leadership.
2. Hold periods are longer, creating execution pressure
Average hold periods are now approaching seven years, the longest many sponsors have experienced in their careers. In many cases, firms have chosen to delay exits rather than accept lower valuations.
But longer hold periods introduce new challenges. Businesses still need to perform, and maintaining momentum over an extended investment cycle can be difficult, particularly when management teams were hired for a different phase of the journey.
For assets held well beyond the original investment thesis, the “wait for the market” playbook is becoming harder to justify. As financing costs remain elevated and exit windows stay selective, delaying operational improvements only increases execution risk.
Why it matters
Assets that should have exited are now being asked to deliver another phase of growth or transformation, and that often requires a reset in pace, capability, or leadership.
How interim leaders help
Interim leaders are frequently used at these inflection points, when a business needs to re-accelerate performance, stabilize operations, or prepare for a delayed but imminent exit.
In our experience, these appointments are not only about filling a vacancy, they’re about introducing specialist capability at a critical stage of the hold cycle. Sponsors are often looking for someone who has solved a similar challenge before and can help the business navigate its next phase of value creation.
3. The valuation gap is forcing operational improvement
There remains a disconnect between buyer and seller expectations across much of the mid-market. According to Bain & Company’s Global Private Equity Report 2026, private equity firms are still holding an estimated 31,000 portfolio companies globally, and many would have originally expected to exit earlier in the cycle. For a significant proportion of those businesses, achieving the desired valuation now depends less on waiting for market conditions to improve and more on improving the underlying business.
Why it matters
Sponsors are focusing on actions that directly support valuation: improving earnings quality; cleaning up balance sheets; strengthening reporting and governance; and building a credible forward-looking growth story.
How interim leaders help
This is typically where we see demand for CFOs, finance transformation leaders, and operational specialists who can make measurable improvements in a defined timeframe.
Increasingly, conversations with sponsors center on outcomes rather than programs: stronger cash generation, better reporting, clearer operational visibility, improved margins, and greater confidence in the numbers. In other words, the requirement is rarely more strategy; it’s execution against a known value-creation plan.
4. Value creation has shifted from financial engineering to execution
Industry analysis suggests leading funds now generate a far greater proportion of returns through operational improvement than financial engineering, a marked shift from a decade ago. For much of the market, the era of relying primarily on leverage and multiple expansion has passed. Growth, margin improvement, systems, integration and execution now play a much larger role in determining outcomes.
This is a structural shift, not a short-term cycle.
Why it matters
The talent profile that sponsors need has changed. Increasingly, they’re looking for leaders who can drive measurable operational improvement, not simply oversee the business. Value creation has become execution.
How interim leaders help
The interim market has evolved alongside this shift. The executives most in demand are experienced operators who have worked in PE-backed environments before and can deliver quickly in high-pressure situations.
CFOs, in particular, have become one of the primary levers of value creation. Their remit now extends well beyond financial stewardship to transformation, systems modernization, integration, AI enablement, and building businesses that are ready to scale or exit.
Whether in finance, technology, operations or transformation, sponsors are increasingly prioritizing people who understand the pace, complexity and investor expectations that come with private equity ownership from day one.
5. Fundraising pressure is driving faster talent decisions
Fundraising remains concentrated among the industry’s largest managers, increasing pressure on mid-market firms to demonstrate portfolio performance. For many sponsors, every portfolio company now plays a more significant role in the firm’s overall fundraising story.
Why it matters
When underperforming assets have the potential to influence future fundraising, the cost of waiting increases. Rather than hoping performance improves organically, sponsors are acting earlier to protect value and maintain momentum.
That urgency is changing how talent decisions are made.
How interim leaders help
Rather than waiting for permanent appointments or relying solely on external advisers, sponsors are increasingly bringing in experienced interim leaders who can make an immediate impact from inside the business.
Speed has become a competitive advantage. Increasingly, the question isn’t, “Who’s available permanently?” It’s, “Who can solve the problem fastest?”
6. Buy-and-build strategies require hands-on execution
Add-on acquisitions continue to account for the majority of middle-market private equity deal activity, with buy-and-build remaining one of the market’s defining investment strategies. Many platform companies are now integrating their fourth, fifth or even sixth acquisition, making execution increasingly complex.
Why it matters
Completing an acquisition is only the beginning. Value is ultimately created through successful integration: aligning systems, processes, teams, governance and operating models, while capturing the synergies that underpin the investment thesis.
These are execution-heavy challenges that demand experienced leadership.
How interim leaders help
We’re increasingly seeing demand for integration leaders, program managers, ERP specialists and transformation executives: people who can lead complex workstreams and ensure value is actually delivered after the deal closes.
Across many of these mandates, the focus is remarkably consistent: operational excellence, systems integration, cost optimization, pricing, turnaround execution, and enterprise-wide transformation. These capabilities aren’t nice-to-haves, they’re increasingly how sponsors capture the value they underwrote at acquisition.
What we’re seeing across mandates
The underlying challenge differs from business to business, but the common theme is execution. Few clients are asking for more strategy. In most cases, the investment thesis is already clear and the value-creation agenda has already been defined.
What they’re looking for is someone who can accelerate delivery, remove bottlenecks, and create momentum against that plan.
Across all of these themes, the pattern is consistent. Clients are asking for leaders who can:
- Prepare businesses for exit
- Improve financial performance and cash generation
- Lead transformation programs
- Integrate acquisitions
- Implement systems and processes
- Strengthen reporting and governance
In short, they need people who can deliver outcomes, not just plans.
Final thoughts
The private equity market is demanding. Longer hold periods, tougher exits, and increased scrutiny on realized performance are pushing sponsors toward a more execution-led model of value creation. That’s changing how firms think about talent.
Interim executives are no longer seen simply as a temporary solution or a stopgap between hires. Increasingly, they’re being deployed deliberately: experienced operators brought in to solve specific problems, accelerate progress and help businesses reach key value inflection points.
Perhaps the biggest shift is in how interim talent is perceived. Historically, interim executives were often brought in to cover a gap. Today, they’re increasingly being hired to achieve a specific outcome. That distinction matters: it moves interim hiring from a reactive decision to a deliberate value-creation lever.
Ultimately, the investment thesis is rarely the challenge; the strategy is already in place. What businesses need, at the moments that matter most, is experienced leadership that can execute against it.
In today’s market, competitive advantage doesn’t come from having the best strategy. More often, it comes from executing that strategy faster than everyone else.