PE Funds where Ops works with deal team pre-deal

Does anyone know of any funds where the Operating team gets involved pre-deal?

Possibly in the form of giving an opinion including potential operating improvements with the idea of executing the recommendations after close.

If this doesn't exist, or even if it does for that matter, what are some other funds (preferably middle market manufacturing focused!) where there is a large emphasis on the operating team side and provides the ability to get involved at the Associate/VP level?

 
Best Response

The following would be based off my observations so it might not be correct.

  1. There are definitely firms that have operating partners that provide an opinion especially during weekly meetings on new deals. The recommendation / opinion of the operating partner may be not executed but the investment team may still ask for the opinion especially when the investment thesis revolves around a buy-and-build strategy.

  2. Firms that place a large emphasis on operating team side are usually firms whose founders are from a non-finance background e.g. industry experts forming sector focused funds. While having operating partners is definitely important, I personally felt that their biggest value-add is actually helping the fund to have a better story for fund raising.

  3. Traditional PE firms usually hire people for the operating team at the partner level. In addition, they may hire a new CEO to help out with the operations and do not need a junior operation staff with it. If you would like to help out in the operations in the associate/vp level, I would say your biggest bet is the sector-focused funds.

Hope it helps.

 

Yes that's great, thanks a lot. Does anyone else agree/disagree or have any further clarifying points they would like to make?

To your point of getting involved with a sector-focused (probably boutique/middle market) fund that was founded by people from a non-finance background, this is exactly what I assumed would be my best bet.

Are you aware of any specific funds that you could point me towards that would fit this description, especially in the industrials sector (manufacturing, distribution etc...)?

Thanks!

 
curious_monkey:

For that type of position how important is MBB? Would super applicable experience at a boutique be sufficient? How would you go about getting in front of one of these firms?

From my experience, the roles where the "portfolio ops" team is a separate entity "e.g. KKR Capstone", it's pretty much all ex-MBB. I'm sure there are exceptions, but that's the norm. For MM funds where the deal team gets involved with some of the operations post-close, it's more of a mix.

 

Attended KKR Capstone post-MBA recruiting event at Kellogg a few years ago. They're looking for pedigree - the Director mentioned 80%+ pre-MBA folks are pre-MBA MBB (top ranked in their groups) and high-GPA from top 10 MBA (exception is grade non-disclosure schools w/in top 10). He went on to mention they like to recruit from Kellogg as the school allows grade disclosure, a little weird given grades don't matter as much in MBA. In my opinion, would be tough to land an offer without solid pedigree.

As for operating folks at PE firms, agree with comments above that partner level positions are most common. Also, saw funds bring in MBB for diligence and growth opportunities for $350+ EV deals. Speaking from experience as an Associate at a top mid-market shop.

 

Wow, thanks for your insight (great first hand experience thats not available on linkedin) ... that makes me think the culture at a group like that would be quite stuffy which is definitely not attractive to me.

Maybe I would be better off at a MM PE shop in an ops role although as you mentioned many of them only have partner level operating roles. Interesting, thanks again!

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