Operating partner vs general partner: what are the differences?

The general partner (GP) is the decision-maker in a private equity firm: they manage the fund, make investment decisions, raise capital, source opportunities and oversee the portfolio, with a fiduciary duty towards investors.

In practice, GPs are the partners of the management company. They build the investment thesis, negotiate deals and often sit on the boards of portfolio companies.

General partner vs limited partner

A fund brings together two categories of players. The general partner manages the fund, and the limited partner (LP) provides capital to the fund, without taking part in operations or investment decisions. LPs can be institutions such as pension funds, or high-net-worth individuals.

The operating partner is an expert in operational management. They focus on improving the performance of portfolio companies: they get involved in their operations, bring a strategic view and help roll out growth levers. They are most often a former executive or a former consultant, sometimes specialised in a function or a sector.

The operating partner weighs on the operational decisions of portfolio companies, but generally does not make the fund’s investment decisions, which remain the GPs’ prerogative.

Other titles complete a fund’s organisation chart:

• the managing partner is usually the partner who runs the management company, a GP with leadership responsibilities
• the venture partner, found mainly in venture capital, works with the fund on a more occasional basis, bringing their network, investment opportunities or expertise

Titles vary from one firm to another. The useful distinction separates those who decide on investments and those who work on operations.

Despite the title, the operating partner is not always a partner of the fund. Their status depends on each fund. In some structures, the position has become a full-time job combining salary, performance bonus and carried interest, on the model of an investment partner.

Elsewhere, their share of carried interest is lower than the GPs’, and their pay is mainly linked to portfolio performance. Other operating partners work as independents.

The two roles complement each other:

• the GP defines the investment thesis: why this company, which levers, what value at exit
• the operating partner plays a key role in executing this thesis. Little involved in sourcing, they are central to post-acquisition management and lead the workstreams that directly influence performance

This split works when roles are clear, with the GP keeping the shareholder’s view and the operating partner keeping the working relationship with the management team.

The operating partner’s know-how is not limited to a fund’s portfolio companies. At Atscale, we apply the same principle of direct involvement to a single area: revenue. We work at the request of a fund or directly for a scale-up, with no equity stake, alongside your sales team.

A Revenue Operating Partner is a senior sales or Revenue Operations executive with 15 to 25 years of experience. They join your team, alongside your VP Sales or your RevOps lead, to execute your sales roadmap.