Future of PE ops career?
Way back in the day, PE was all about financial engineering. Once returns were difficult to achieve from purely financially engineering a business, operationally focused firms (e.g., Bain Cap, H&F, Advent, etc.) emerged.
As returns become harder to achieve and deals need to underwrite more operational improvements, do you guys see a world where there will be deal teams where ops members and deal team members are truly on-par (seems like today ops is typically a second-class citizen to the deal team)
Interesting question. Bump
We value operational partners immensely at my firm and they get paid quite well. I don't think that operational focused employees or partners are looked down upon. However, I think it's hard for them to navigate to being on top easily. They can often lack the dealmaking ability or financial underwriting ability necessary to win good deals which can make them a bit untrustworthy to be leading the charge. (May not be try of all operational focused people, but everyone has a focus and if you focus is outside winning and executing good deals, it's hard to just bring on a team member to make those decisions for you the same way that a deal focused guy can just bring on an operating partner to support him.)
There is one firm in my city that the main partner/founder started in ops. He went M&A Law -> OPS -> Investing Side -> Founder of fund. this is LMM which probably makes it easier.
It depends on the firm. Deal people are the ones that started the firm usually, so ops folks are treated as second class citizens fairly often. However there are also plenty of firms where the ops team is given respect as well. KKR's Capstone team for instance is a well regarded group. Numerous other firms of course have also brought on ops teams. At the end of the day, it really doesn't matter what anyone thinks of you, so long as they pay you well, and increasingly ops teams are getting carried interest and high salaries. And you need to be true to yourself. Frankly I think ops is more fun than investing. Anyone can take a punt, not everyone can build a business.
It's incredibly easy to hire fin monkeys to run the LBO process in vanilla PE. Hiring good operators is very hard since they can do their own thing most of the time and make a lot more money or do pretty casual consulting and make $$$. Capital is now a commodity. Look @ how many PE firms pitch operators on backing their deals right on their sites.
Voluptatem natus ut sint ut deleniti accusamus et. Maiores vel numquam eius molestiae iure voluptas id. Culpa minus libero aut molestias doloremque amet.
Magnam velit repellendus ut et placeat quos. Sunt non qui eum soluta enim. Sed soluta sit aut. Sit voluptatibus et sit dicta fugit itaque. Sit quasi voluptatem voluptate quia dolor ut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...