Finatal’s Private Capital & Operating Partner practice sits at the point where dealmaking meets value creation – where investment theses are translated into operational outcomes. In this piece, Charlie Linacre, Managing Director at Finatal, explains how value creation in private equity has shifted from financial engineering to operational delivery, why Operating Partners have moved to the centre of the model, and what this means for how firms hire, build and deploy operating talent.
(3-min read)
Operating Partners, and the talent behind them, play an increasingly central role in private equity value creation.
For a long time, private equity followed a familiar formula: buy well, optimise the capital structure and exit at the right moment.
That model still holds, but it’s far less reliable. Entry multiples are higher, debt is more expensive, and exit markets are less predictable. Increasingly, value is created after the deal closes.
Today, around 65-70% of value in a typical deal is generated through revenue growth and operational improvement, compared to 30-35% from multiple expansion. The focus has shifted from structuring to execution.
And that’s brought Operating Partners, and the question of how firms build and recruit operating capability, into sharper focus.
From financial engineering to operational delivery
Private equity has become more hands-on.
Longer hold periods, now often exceeding five to six years, require sustained performance. Value creation is driven by execution: growing revenue, expanding margin and building scalable operating models.
At the same time, LP expectations have evolved. Firms are expected to demonstrate repeatable value creation across a portfolio. This has accelerated investment in operating teams and increased demand for experienced operators.
Operational capability is no longer a support function. It’s a core differentiator – and increasingly a recruitment challenge as much as a strategic one.
The evolution of the Operating Partner role
This shift is most visible in how the Operating Partner role has evolved.
Once deployed selectively, Operating Partners are now embedded across the investment lifecycle, from diligence through to exit. The remit has shifted accordingly: it’s no longer about advising; it’s about delivering outcomes.
That requires a different profile: operators who can move between strategy and execution, influence management teams, and operate at pace within PE-backed environments. As a result, Operating Partner hiring has become more targeted, more competitive, and more central to firm performance.
Bridging the gap between plan and delivery
Every deal starts with a plan. The challenge is execution.
In reality, plans encounter constraints quickly: limited bandwidth, imperfect data, and organisations not yet set up for PE pace. Without intervention, strategies can lose momentum early.
Operating Partners sit in that gap. They translate the investment thesis into a small number of actionable priorities, align stakeholders, and create the structure required for delivery.
Much of the risk sits in the early months: overestimating the speed of change, underestimating leadership gaps, or relying on incomplete data. Addressing these early often determines whether a business accelerates or stalls.
Focus is the real differentiator
Across high-performing portfolios, one characteristic stands out: focus.
Post-acquisition, it’s easy to generate long lists of initiatives. Strong Operating Partners strip this back to a handful of priorities linked to value: revenue growth, margin expansion, integration or risk reduction.
The discipline lies not just in selecting priorities, but in protecting them. New opportunities emerge constantly, but value is created by executing the right initiatives consistently.
Making execution visible
Execution depends on visibility.
One of the most valuable contributions Operating Partners make is establishing a clear operating cadence: a rhythm of tracking, review and decision-making that keeps the organisation aligned.
Done well, this drives behaviour: accelerating decisions, surfacing issues and building accountability.
It also has a clear commercial impact. Assets that demonstrate sustained EBITDA growth, underpinned by consistent KPI reporting, tend to command higher exit multiples. Buyers assess not just performance, but confidence and control.
Operating capability and talent as a differentiator
As operational delivery has become more central, so too has the importance of building the right teams.
Three-quarters of private equity firms are planning to expand their operating and value creation functions. This is driving increased focus on private equity recruitment – particularly for Operating Partners and senior operating talent.
The challenge is not just scale, but profile. Firms need individuals who combine deep functional expertise with the ability to operate at pace. This has intensified competition for talent and made Operating Partner hiring a strategic priority.
Those who get it right benefit across the lifecycle – from underwriting to exit.
What this means for portfolio leadership
For management teams, this shift changes the operating environment.
Private equity ownership brings greater pace, transparency, and accountability. The most successful teams respond by embracing structure, using cadence to drive focus, improving visibility, and aligning leadership capacity with the plan.
Execution ultimately comes down to capability. The limiting factor is whether the organisation has the leadership, structure, and bandwidth to deliver. Identifying and addressing these gaps early is often what separates high-performing portfolios from the rest.
Closing thoughts
Private equity has become more operational.
More of the return is created during the holding period: through execution, leadership, and operating discipline. That shift has elevated the role of Operating Partners and increased the importance of how firms recruit, build, and deploy operating talent.
The firms that treat operating capability as a core lever of value creation are best positioned to outperform.
The Finatal Operating Partner Playbook
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Charlie Linacre leads Finatal’s Private Capital & Operating Partner practice, advising private equity firms on Operating Partner, value creation and senior leadership mandates across the investment lifecycle.
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