The evolution of Operating Partners in Private Equity:
Operating Partner 1.0 (1990-2010): Retired CEO. But weren't too engaged. Quarterly dial-in isn't enough. Experience isn't so relevant (war stories from the 90s, etc.). ENDED IN 2010s.
Operating Partner 2.0 (2010-2020): McKinsey Junior Partner. Energetic, motivated, money-driven. Blackstone and peers went to that model. Feedback from CEOs: "lacking pragmatism in recommendations." They don't need strategy help, that was done upfront in the thesis. Portcos don't go off the rail for lack of strategy, but because of team & accountability & process & politics & incentives; the soft stuff. Former consultants didn't have enough battle scars & hiring mistakes. RECENTLY ENDED.
Operating Partner 3.0 (2020-2030): Mid-career: consulting/banking/P&L responsibility. Best of both worlds. Run businesses, missed budgets, hired & fired, talk the language of deal teams. Consulting mentality, M&A understanding, strategic thinking. Blackstone has 6-7 of these. Still young enough to do the grunt work, in their 40s. Helicopter board room to plant floor. Swiss army knife. CONCURRENT
Operating Partner 4.0 (2030+ (?)): TBD. It will drift more senior. Explicit requirement to have been a CEO. Not opening xlsx as much anymore. Not someone in their 60s, but low 50s, still motivated to work. Might relax the banking preference. 5-7yrs in consulting. Bounced around operating roles, incl. a CEO role (couple of hundred million).
