Working for a PE firm/fund

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Not sure where to post this but looking for advice if anyone has it. Anyone here have experience working as a Operating Partner at a PE firm? I was approached by a reputable recruiter to pivot my career from working at “big corp” to working as an Operating Partner for a PE firm. Essentially in my domain I would advise the PE value creation team 1-2 days/week and the rest of the time be the sparring partner to the Executive Team of the PE’s portfolio companies (this would be more than one company at a time, probably 4-5 so would clearly not be hands-on). I won’t reveal my domain but I would be the sparring partner to the CEO, CFO, CRO, CTO, etc. Ultimately helping the fund get an exit of the portfolio company (this could be an IPO, a sale to another PE firm, etc.)

I do have deep expertise in my area but this is very different from what I do. I would go from an “operator” to an “advisor”. The upside here is this can be very lucrative both from a compensation standpoint but more importantly there is potential to participate in the equity of the portfolio companies or the fund itself. Companies this fund has invested in have typically exited in ~4 years with a 5-8x multiple. This is where I am now out of my skis :slight_smile:

Of course I asked the latest chatgpt, gemini, etc. but does anyone have practical experience on how this works? and what would be the main pitfalls of such a role?

thanks for reading.

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I only saw it from the outside many years ago as a consultant to PEs. What I could tell is that you basically give up your life for 4 years working all hours and squeezing all the juice out of the lemon and then you get a massive payoff.

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Sounds like a fun change or at least an interesting path. Just ask yourself what’s the very worse thing that could happen?

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As an operating partner is probably less intense than mgmt as they need to deliver, else they are out. As ops partner you will oversee and provide ideas, challenge where needed and etc. as your time is split difference companies this is how your time is stretched.

the returns listed are probably pre-high rate environment and quite high. Established PEs with mid to mature assets are closer to 2x. Getting anything above 5x means high transformational industry or very high turnaround situations.

I think this could be a great opportunity but bear in mind PE world is very different than corporate. Less BS, less focus on countless alignments unneeded. Hands on when needed. You may be asked to step in temporarily as CFO, CEO, CMO, board chair if needed as you know the industry or the portfolio’s company more than the PE’s partners, which focus on deal making and raising capital.

dont get blurred by the comp. Sometime exits take double of 4 years. Sometime discounts are needed vs exit favored terms.

if you plan to work 4 years and retire, it’s a wild dream. If you have longer than it’s a card to play.

also industry makes a lot of a difference , defensive industries move slower than tech, both in multiples and timelines

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Thanks.

I do think the returns are more than 2x but probably not 8x for sure, the time horizon also is a weighing factor and different companies will be at different timelines. Last week I discussed with the recruiter and the variable compensation could be structured in a way that there is an annual payout and not only on exit. Obviously this reduces my risk and potential payout. There is also the option to reinvest the annual payout. I have my tax accountant running some scenarios because it can get quite complex actually.

I was really more curious about the type of work. What you described aligns with what I envisioned and was told by the recruiter. From a work standpoint it sounds attractive but I wonder if I am at that stage in my career… or if this accelerates my ability to stop working or move to real part-time operating advisor. Lots of thoughts so I appreciate your input earlier.

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