How Private Equity Operating Partner Roles are Evolving in Today’s Market

The role of private equity (PE) operating partners is transforming to meet the demands of a rapidly changing market. Once a relatively niche position, operating partners now play a pivotal role across the entire deal lifecycle, from pre-diligence to exit. They work closely with portfolio company (portco) management teams to drive value creation, touching on growth, cost efficiencies, and risk management. As the market continues to evolve, the role of the operating partner is gaining prominence.

At Value Driven Solutions (VDS), we recognize the need for top-tier talent to navigate these changes. If your PE firm is looking to recruit world-class operating partners, look no further. VDS provides access to some of the most skilled and experienced operating partners available, ready to drive the value creation strategies your firm needs.

The Shift from Financial Engineering to Operational Value Creation

Historically, financial engineering contributed significantly to value creation in private equity, but market dynamics have changed. In the 1980s, 51% of value creation came from financial engineering. Today, that contribution has fallen to 25%, while operations-driven value creation has risen from 18% to 47% since 2010. These statistics highlight the increasing importance of operational expertise, which PE firms need to stay competitive.

As valuations hit record highs and traditional restructuring strategies have diminishing returns, a fresh approach centered on operational transformation is required. With inflationary pressures and high interest rates, PE firms are refocusing on maximizing the performance of existing portfolio companies instead of relying on financial maneuvers alone.

Limited partners (LPs) are also demanding more sophisticated operational teams. These LPs seek PE firms with the functional and industry knowledge necessary to unlock portfolio value, and operating partners are at the forefront of that mission.

The Rise of Specialist Expertise in Private Equity

Operating teams have historically relied on generalized playbooks that apply across portfolio companies. However, today’s business transformations require a level of specialized knowledge that was not previously essential. Operating partners are now expected to bring in-depth experience—whether it be in specific industries or functional areas like technology and operational restructuring.

Finding such specialized talent is challenging. That’s where VDS comes in. We have access to a global network of over 10,000 operational excellence professionals across 22 countries. Our experts possess a minimum of 20-30 years of experience and have proven themselves as true players and coaches, capable of rolling up their sleeves to get the job done. If your firm is looking for specialized talent, we have you covered.

Navigating Cultural Conflicts Between Deal Teams and Operating Partners

Cultural conflicts between deal teams and operating partners can sometimes undermine value creation efforts. Deal teams may focus more on high-level financial objectives, while operating partners deal with the day-to-day operational challenges faced by portfolio companies. These differing perspectives can create friction, especially when execution difficulties arise.

Leading PE firms are addressing this by fostering a culture of collaboration and clearly defining the roles and expectations of both the deal and operating teams. At VDS, we emphasize cultural alignment as a key element of successful collaboration. Our experts are fully vetted not just for technical expertise but also for their ability to work seamlessly within your organization’s leadership culture.

Middle-Market Companies and Value Creation Challenges

With the current macroeconomic environment, many larger PE firms are acquiring middle-market companies. These smaller businesses often lack the experience or infrastructure needed to scale effectively, and their management teams may not fully grasp how to implement significant operational changes. This can slow down or derail value creation plans.

Our experts at VDS are adept at working with management teams to overcome these hurdles. Whether you need an interim CEO, CFO, or specialized transformation expert, we have the talent that can align quickly with your strategic goals and ensure that value creation remains on track.

Managing Cost Constraints While Enhancing Operational Capabilities

PE firms often face budget constraints that limit how much can be spent on operational improvements. Right-sizing the operating team while remaining within these budget limits is crucial. Many firms struggle to balance cost management with the need for specialized expertise.

At VDS, we offer a solution. Our flexible model allows firms to access interim experts on demand, enabling you to fill critical roles without overcommitting on permanent hires. Whether you need operational excellence professionals for short-term projects or ongoing engagements, we provide talent that delivers a 10X return on investment.

Why Choose Value Driven Solutions?

If your PE firm is seeking the best operating partners in the world, you should contact Value Driven Solutions. Here’s why:

• Speed: We quickly place the right talent where it is needed to achieve results fast.
• Experience: All of our operational experts have 15+ years of experience and are fully vetted through our 360° Client Alignment? process.
• Performance: We are not a staffing firm. We are a specialized operations firm that guarantees 10X ROI with the experts we provide.

With a global network of top-tier professionals, VDS can match your firm with the right talent to maximize the value of your portfolio companies. From interim CEOs to supply chain transformation directors, our experts are equipped to tackle your most pressing challenges.

If you're ready to partner with world-class talent and accelerate value creation at your portfolio companies, contact Value Driven Solutions today. We have the expertise, experience, and network to ensure your success in this dynamic market.

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