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The Operating Partner

The Operating Partner

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The role of the Operating Partner in Private Equity is a relatively new creation. In fact, it is only over the course of the last decade that it seems to have gained more widespread adoption across the asset class. As with anything new, we don’t yet have any uniform agreement on exactly what an Operating Partner does. Defining the role remains tricky particularly because so many firms see it as meaning vastly different things. During my career, I have had the opportunity to work with more than 60 different PE shops as they have sought out Operating Partner talent around the world. I’ve interviewed thousands of sitting and prospective Operating Partners; and have also spoken with hundreds of the GPs and LPs who are reliant on their contribution. I hope that this blog can serve the community of Operating Partners in PE as it sheds light on some of the various issues that people deal with in that chosen career. Perhaps it can be a resource for aspiring Ops Partners and occasionally bring some value to those with more tenure in the actual role. As always, I invite your comment and contribution as we explore these topics. Don’t be shy about giving me your point of view or suggesting topical areas to cover.

网站
https://www.operatingpartner.com
所属行业
商务咨询服务
规模
2-10 人
类型
私人持股

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动态

  • I’m starting a new feature for the Blog where I sit down with industry experts who I’ve encountered over the years to get their take on various elements of an Operating Partner’s VCP.?Today marks our first installment and I’m thrilled to sit down with?Matt Busch?from INSIGHT2PROFIT. https://lnkd.in/eqMpGKni

  • On February 4, 2025, I was privileged to present to the Business school students at The University of Chicago Booth School of Business. We spent an hour together exploring the paths they might take to land roles inside PE Portfolio Operations teams. It was awesome to see the interest they have in putting a role like this on their radar. Fifteen years ago, a seminar like this wouldn’t even exist. Things have come a long way… Click below to read more and view my presentation. https://lnkd.in/dzy3kQsC

  • UPDATE ON OPERATING PARTNER COMPENSATION TRENDS I’ve been telling anyone who asks that Operating Partner compensation has taken a hit since the end of 2022 due to the poor market for exits. There’s a great and encouraging piece out this morning from Jessica Hamlin at Pitchbook providing some light at the end of the tunnel. Bring on 2025!? Pertinent excerpts below… “Private credit and equity managers can look forward to bigger year-end bonuses next month. Since 2020, end-of-year incentives across financial services have been on a downward trajectory, but the private credit boom and a modest pickup in M&A activity and PE-backed exits have the industry anticipating higher payouts in December. Across strategies, asset management giants are placing a greater emphasis on performance-related payouts to their employees—which hinge on portfolio returns and fund distributions—over fee-related payouts. As the Federal Reserve continues to cut interest rates and M&A activity picks up in the back half of the year, the modest return in dealmaking and exits has driven up gains in these performance-related earnings at alternative asset managers. At KKR, Apollo, Carlyle, Blackstone, TPG and Ares, performance-related compensation was up 33% year-over-year in 2024 through September, Bloomberg reported. KKR, for example, distributed $843 million in fund performance-related compensation year-to-date up until the end of Q3 2024, nearly 50% more than what it paid to employees last year. In PE strategies specifically, this year has marked a recovery from the two-year dealmaking and exit slump that started in 2022, driving up compensation tied to fund performance. Year to date, total PE deal value has grown 23.1% year-over-year, driven by a combination of leveraged buyouts, platform add-ons and growth equity deals, according to PitchBook’s?Q3 2024 US PE Breakdown. The data shows PE exits came roaring back in the first nine months of the year, with exit value up 50.5% year-over-year, as asset managers brought their highest-quality investments to market.”

  • How does a firm know that it has the right person in the leadership chair for the Portfolio Operations team??I occasionally get asked this question and TBH there’s not one foolproof way to answer it.?Many factors will influence your decision, but perhaps keep in mind some of the ones I've pointed out in my latest blog post. Click below to read!

  • Thank you to those who responded to my last poll about your firm's Carry (or other similar LTIP style) economics: "If you leave the firm on good terms, do you get to take your vested Carry with you?" As a follow up, this week I'd be interested in those of you who answered "It depends". If "It depends" is the answer, how frequently have people who have left actually been able to take it with them?

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  • As topics of interest pop up, sometimes pulsing this network is the best way to get a quick sense of the trends in portfolio ops.?I’ve had a number of people asking recently about Carry (or other similar LTIP style compensation schemes).?Assuring you that this is a completely anonymous poll, if you could give me a quick answer to the question below about your firm, I’d be very appreciative. At your PE firm, relative to your Carry (or other similar LTIP style) economics, if you leave the firm on good terms, do you get to take your vested Carry with you??If “It depends” is the answer, please select "Other". We'll be exploring those answers in a follow up poll next week. Thank you!

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