PE operating folks - want to share how things are going?
I'm curious about your day-to-day, progression, comp, etc.
I'll start - I'm an operating "partner" but my MM fund only hires principal+ levels and just have "partner" / "advisor" as the only available titles. I'm definitely more principal in scope of my work. The ops program / team is very new and lacks structure in progression - there's no set annual review, promo, or comp increase. We primarily work with executives (sometimes directors / VPs) at portcos in a mostly pull-only system - billed out as consultants for our functional expertise (e.g., data science, fractional CIO, supply chain and operations strategy).
Comp is around $500K cash plus management incentive programs (MIP) at portcos, which we become eligible after some obscure criteria (e.g., where we are billing hours + impact). The MIP is also only worth something for GREAT outcome - each portco has to roughly 3x EBITDA starting the time of our grant on top of meeting the basic MOIC 3X target).
Can't speak for MM, but I'm friends with a lot of LMM operating partner types with portfolio companies that have ~$50m - $250m in rev, and IMO PE funds do not pay enough to attract really good people in consumer.
I think pay should be significantly higher than investment folks, but it's the other way around for some reason even though a GREAT operator can drive far far more value than anyone on the investment end can.
Thank you for your insight. Agreed good operators should be paid a lot more! The deals team does not want to share the upside evenly (not even close) with the ops & portco execs - when we are the one synthesizing and executing value creation plan.
I am an operating "partner" at a MM fund. It sounds like or our ops team has been around longer (5-10 years). However, we have some of the same problems (no real structure, hit or miss reviews, promotion does not exist). Our structure is a bit different, we are full time employees of the fund and are not billed out to the portcos.
In terms of comp I am probably further along in my career than you so comp is a bit better. Additionally, instead of MIP from the portcos we get carry from the fund. While I understand your point about it being hard to get paid in the MIP program, having Carry is not cake walk either. It can take up 7-10 years for the fund to START to pay carry...especially if it is not top quartile.
Thank you for your comment! Curious to hear what your day-to-day looks like - do you execute / support individual portco's initiatives as need arises or something more overarching (e.g., something that will help multiple portcos after identifying common threads)
I have a duel role - I work on Technology, Ops, and Human Capital projects directly with individual portcos. I do non-portco specific work as well such as the structure of the ops team, vendor programs, cyber readiness assessments, etc. I would say right now my time is evenly split between those two areas. How about you?
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