What is an operating partner in private equity?

A private equity fund takes stakes in unlisted companies, supports them for a few years, then sells its shares. Within private equity funds, the operating partner focuses on the company itself: its strategy, organisation, teams and results.

Operating partners are proven executives, generalists or specialists, often former CEOs, COOs, CFOs or chief revenue officers, or former consultants. Their value lies in this dual skill set: they understand an investor’s expectations and know how a company works day to day.

For a long time, LBO performance relied mainly on financial leverage. That model has reached its limits. With less debt in deals, value now has to be created at operational level, which explains much of the role’s growth in France.

Operational value creation relies on concrete levers, on which the operating partner works: accelerating sales growth, improving margins, structuring the organisation, strengthening management teams.

The operating partner gets involved from due diligence onwards and stays involved throughout the life of the investment, with the main objective of identifying the operational improvements that increase the company’s value. Their role therefore follows the investment cycle.

Before the acquisition: due diligence

During due diligence, they assess the target’s operational strength: quality of the organisation, reliability of the sales pipeline, ability of the management team to deliver the plan. Their view complements the financial analysis and feeds the investment thesis.

During the holding period: the value creation plan

After the acquisition, they help management build and roll out the value creation plan. They prioritise workstreams, mobilise teams and track metrics. This is the phase where their role is most visible.

Before the exit: securing the trajectory

As the exit approaches, they make sure progress is measurable and lasting, and that the company can show a buyer a credible trajectory.

Funds do not all organise this role in the same way. Three models are usually distinguished: the sector expert (a former executive from a sector, often a CEO or CFO), the functional expert (a specialist in a function such as procurement or sales and marketing) and the generalist, often from consulting.

Two other variables come into play:

• status: the operating partner can be employed by the fund or work as an independent
• intensity: some work full time on a few portfolio companies, others part time, project by project, to bring targeted expertise

The role also exists in venture capital, with marked differences:

• in private equity, the operating partner works mainly with mature companies, on operational optimisation and exit preparation
• in venture capital, they support young companies, on innovation and hypergrowth

Success metrics change accordingly: EBITDA improvement on one side, product-market fit and subsequent funding rounds on the other.

For the CEO of a portfolio company, the arrival of an operating partner can raise a concern: tighter control by the shareholder. At Atscale, our people defuse this risk through their stance. They take a mentoring position, build a relationship of trust and support without taking over, leaving the existing teams their autonomy.

Used well, the operating partner gives the CEO additional experience and bandwidth.

For an investment fund, identifying a portfolio company’s growth levers immediately raises the question of who will pull them.

Following commercial due diligence, an Atscale Revenue Operating Partner helps the portfolio company deliver its roadmap, working closely with its teams.

Our Atscalers are senior sales or Revenue Operations executives with 15 to 25 years of experience, including more than 10 years in leadership roles at high-growth companies. They work alongside the portfolio company’s VP Sales or RevOps lead, full time or part time, leaving management in charge.