The Rise of the Operating Partner in Private Equity

Check out this live webinar recording featuring operating partner experts from Carlyle, Marlin Equity Partners, Accel-KKR and Francisco Partners

Connect With ON

ON Partners sponsored a live interactive webinar, in collaboration with Hunt Scanlon Media, discussing the rise of the operating partner in private equity with Anna Tye from Carlyle, Ed Richards from Marlin Equity Partners, Steven Berman from Accel-KKR, and Ryan Greene from Francisco Partners. The session was moderated by Tindall Hein and Jeff Hocking from ON Partners.

The webinar examined how PE firms are viewing the importance of the Operating Partner role, how it has shifted over the years and the impact the role has on portfolio companies’ success. Topics included:

• A deeper look into the types of leaders taking on Operating Partner roles and how and why the role has shifted over time.
• Best practices and lessons learned on how Operating Partners are utilized within private equity.
• How the Operating Partner brings value to private equity firms pre and post-acquisition.
• Evaluating the success of an Operating Partner and what firms have learned over the years regarding optimizing this role.
• Understanding what the first 90 days of the role entails and how best to align successful outcomes.
• Predictions on how the role of Operating Partners will shift in the next 3-5 years.

View the recording of the live, interactive webinar here.

Operating Partner Evolution 

ON Partners, a top-20 pure-play executive search firm, has further established its position at the intersection of functional C-level posts, PE-backed companies, and operating partner roles spanning a variety of industry sectors.

Recently ON published its viewpoint on the evolution of the OP role. While ON Partners continues to place OPs in the CEO role, our consultants see demand growing for executives with active, functional experience, such as GTM, operations, IT, and finance to take on OP roles to strengthen and elevate these key functions across the portfolio.

According to Tindall Hein, partner at ON who has previously published insights on the OP role, “Last year, ‘OP 1.0’ was more of a generalist role, in which PE firms brought in a CEO who could help in certain areas. We’re now seeing more of specialist OP, with specific functional or industry expertise, such as a CIO, CRO or COO.”

In this busy and ever-changing market, the ability to more quickly hire a senior executive who can take on multiple roles vs. bringing on a full-time CXO is important. Digital transformation remains a key goal, and regardless of a potential recession and the state of inflation, OPs are still needed to operate companies in which PE firms have invested.

Notes Sean Cantarella, partner at ON Partners, “With the potential of increased market volatility, having a functional OP available to help a PE firm with due diligence before acquiring a company – and improving operations within the existing portfolio– is key.”

In 2021, ON Partners began building more insights around the operating partner role, including hearing feedback from current OPs. While the OP role is typically a step before retirement given the level of experience needed, operating partners are telling consultants at ON Partners they’re working harder now than ever before, balancing the role of coach with being deep in the weeds of three or four companies in a hyper-competitive environment.

Many PE firms are struggling to differentiate themselves and are starting OP initiatives if they haven’t already in order to better compete. The future OP partner model, according to one OP, is to engage specific specialists by industry, function, or specific use cases/projects. “The typical generalist OP will be a thing of the past.”

View more operating partner viewpoints and recent appointments in our private equity resource community. And to see our recent work in PE, check out our first half 2022 PE Executive Talent Report.