Operating Partner
An operating partner is an experienced operator who supports a fund or portfolio companies on execution, strategy, and value creation.
Allocator relevance: A value creation signal—operating capability can differentiate returns, especially in private equity and growth strategies.
Expanded Definition
Operating partners bring functional expertise (go-to-market, finance, manufacturing, talent) and help portfolio companies execute improvement plans. In some firms, operating partners are deeply integrated into underwriting; in others, they are support resources post-investment. The role structure (full-time vs advisor, involvement level, incentives) affects how much value they truly add.
Allocators evaluate operating partner teams as part of the manager’s platform strength and repeatability of value creation.
How It Works in Practice
Operating partners may participate in diligence, build 100-day plans, recruit executives, optimize operations, and help position for exit. They often provide a bridge between GP strategy and real-world execution.
Decision Authority and Governance
Operating partners typically do not have final investment authority, but they can materially influence underwriting assumptions and the feasibility of value creation plans.
Common Misconceptions
- Operating partners automatically improve performance.
- A large operating team means deep support (engagement level matters).
- Operating partner branding is the same as operating partner impact.
Key Takeaways
- Impact depends on integration into diligence and portfolio work.
- Incentives and time allocation determine real value.
- Strong operating capability can reduce execution risk.