Operating Partner

An operating partner is an executive or advisor employed by a private equity firm to help manage the portfolio companies in which the firm has invested. Unlike traditional private equity partners who focus on deal-making, operating partners specialize in improving the operational performance of portfolio companies, driving efficiencies, and supporting management teams in achieving growth targets. They bring industry-specific expertise and hands-on management experience to the role.

Example

A private equity firm hires an operating partner with extensive retail experience to help streamline operations and increase profitability at a struggling retail company in its portfolio.

Key points

• An executive or advisor hired by private equity firms to improve the operational performance of portfolio companies.

• Focuses on driving efficiencies and supporting management to achieve growth.

• Provides industry-specific expertise and management experience.

Quick Answers to Curious Questions

How do operating partners contribute to the success of private equity investments?

They work closely with portfolio companies to improve operations, drive efficiencies, and help management teams achieve growth goals.

What skills do operating partners bring to portfolio companies?

They bring industry expertise, operational knowledge, and leadership experience to guide companies in executing business strategies.

Why do private equity firms employ operating partners?

Private equity firms use operating partners to maximize the value of their investments by ensuring portfolio companies achieve their full potential.