PE Operations?
Currently going through the process of applying to MBAs and trying to narrow down some potential career paths. I have 2 YOE in Big 4 consulting, mostly focused on customer strategy, and am interested in private equity operations.
Has anyone been in one of these roles at the more junior levels? What are the hours like and do they recruit out of MBA programs or primarily from consulting firms?
Curious about this as well. What is comp like at a MM PE fund from operating partner senior perspective? I know it's not as much as inv. team, but still curious.
If you are asking what a more more experienced (i.e. older) operating partner makes I have seen anything from $800k-$2m cash and $5-$20m in carry (across all funds).
What are your thoughts on functional PE ops roles, such as M&A or FP&A-specific? It seems like many funds are expanding their Ops groups with roles like these for people who have deep experience within certain functions to help create best practices within portcos, but are still at the mid-career level. Do you think taking a role like this could lead to a true operating partner role down the line?
I agree that firms seem to be expanding their operating team roles. Some firms have a mix of generalist and specialists (most common I see are FP&A, IT, Sales and Marketing). If you join a PE firm mid career as a functional specialist - I see no reason that this can't lead to a senior (i.e. Operating Partner role). I think the functional specialists gain generalist experience after being in a PE firm a number of years because they get to work on so many different types of companies. Ultimately it depends on whether the firm already has a Head Operating Partner. Small and Medium funds may only have one of these positions while MFs may have multiple. You certainly can leave to another fund if you want as well. I get hit up a lot from recruiters trying to get me to move to another firm.
Thanks. In your experience, would roles like this be eligible for carry and/or equity in portcos, or is that typically only reserved for more senior operating partners?
I think it all depends on the firm. Some firms don't give carry to ops partners (especially at lower levels) but do give them equity in portcos. I have not seen ops partners get direct equity in portcos but I do know it happens. This is more likely in firms where ops folks are hired for specific deals or at least are staffed to specific deals for the whole life of the investment
Most junior ops roles come from top tier consulting, either with or without an MBA. I would expect 30-40% less comp than on the deal side. Sometimes carry can be included but it is usually reserved for senior roles who can recruit high caliber board members or help convince management teams that they want to be acquired by our firm.
To the comments above, I would not expect a big investment in specialist operators or a large expansion in ops people in general in the future. If we need specialist experience, the Board will direct the company to hire a consultant on their books and add-back the cost to EBITDA. That way the PE firm does not have to take on a lot of overhead operator costs that dilute the distribution of management and performance fees.
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