PE-CXO’s Success Stories cast a spotlight on private equity-backed operators and the tools and tactics they leverage to create real value. In each entry, a world-class executive details a practical solution to a critical business issue. To be featured, contact mallory.stokker@pe-cxo.com with the subject line “Success Story.”


Executive:  Patrick Kopf, CFO at Virtus Precision Tube and multi-time PE-backed finance lead.

Challenge: Lack of visibility into demand for cyclical manufacturing-centric businesses with significant fixed costs.

Solution: Utilization of economic metrics and regression analysis to enhance forecast accuracy.

I started my private equity-backed career in the hydraulic space. We had no visibility into a big portion of our business.

With significant fixed costs and the inability to stock finished goods ahead of time, it was not a turn-on-a-dime type operation where we could quickly overcome any big miss in forecasted demand. We also dealt with commodities, and to secure the best pricing, we had to know what we would need in advance.

I’ve spent most of my career in this type of business. Gaining visibility into demand is a consistent challenge. More sophisticated customers sometimes provide forecasts for what they think they will need, but those are largely unreliable. And it doesn’t seem to matter whether it’s a Fortune 500 company or an organization that is nowhere near that level – you’re just as likely to get a bad forecast from a Fortune 500 company as you are a mid-sized business, in my experience.

A...