The Evolving Role of Operating Partners in Private Equity

Introduction

In 2025, private equity firms are navigating a complex economic environment marked by high interest rates, geopolitical uncertainties, and rapid technological disruption. The role of operating partners—once a secondary function focused on financial oversight—has transformed into a cornerstone of value creation. These professionals now lead operational transformations, drive digital innovation, and ensure portfolio companies remain agile in a competitive market.

The Shift to Operational Excellence

Historically, PE firms relied on financial levers like cost-cutting and leverage to boost returns. However, as markets matured and competition intensified, operational improvements became critical. By 2025, operating partners are integral to executing strategies that enhance efficiency, scalability, and innovation. They work closely with portfolio company management to implement data-driven processes, adopt AI and automation, and align operations with environmental, social, and governance (ESG) priorities.

Key trends shaping the role of operating partners include:

• Technology Integration: Operating partners are leveraging AI, machine learning, and advanced analytics to optimize supply chains, enhance customer experiences, and reduce costs. For example, portfolio companies are increasingly adopting predictive maintenance and real-time data analytics to stay competitive.
• Talent Management: With labor shortages persisting, operating partners focus on talent acquisition, upskilling, and retention strategies to build resilient workforces.
• Sustainability and ESG: Investors demand measurable ESG outcomes. Operating partners are embedding sustainable practices, such as carbon footprint reduction and ethical sourcing, into portfolio strategies.
• Rapid Response to Market Shifts: Operating partners enable portfolio companies to pivot quickly in response to disruptions, such as supply chain bottlenecks or regulatory changes.

The Operating Partner’s Toolkit

Today’s operating partners bring diverse expertise, blending industry knowledge with hands-on operational experience. They collaborate with portfolio companies to:

• Conduct operational due diligence to identify value-creation opportunities pre-acquisition.
• Develop 100-day plans to accelerate post-acquisition integration and performance.
• Deploy specialized teams to address specific challenges, such as digital transformation or regulatory compliance.
• Foster a culture of continuous improvement through metrics-driven accountability.

In 2025, operating partners increasingly rely on external networks to execute these strategies. Firms like VDS provide access to extensive on-the-ground expertise, enabling rapid deployment of specialized resources across industries and geographies.

Challenges and Opportunities

Despite their growing influence, operating partners face challenges. Aligning with portfolio company management, managing stakeholder expectations, and balancing short-term gains with long-term growth remain complex. However, these challenges present opportunities for firms to differentiate themselves by building robust operating partner teams that can deliver measurable results.

The rise of technology-driven investing also presents new opportunities. Operating partners are using real-time data platforms to monitor portfolio performance and predict market trends. Additionally, partnerships with specialized consultancies and networks like VDS allow firms to scale operations efficiently and access niche expertise.

The Future of Operating Partners

Looking ahead, the role of operating partners will continue to expand. As private equity firms face pressure to deliver outsized returns in a high-cost capital environment, operating partners will be at the forefront of driving innovation, efficiency, and sustainability. Firms that invest in building strong operating partner teams and leverage external networks will be best positioned to thrive.

How VDS’s Network Powers PE Success

Private equity firms trust VDS’s expansive network of over 5,000 professionals, strategically positioned across every major U.S. city, to deliver rapid, high-impact results. This vast network enables VDS to deploy boots-on-the-ground expertise swiftly, whether for due diligence, operational turnarounds, or technology implementation. Operating partners rely on VDS to provide specialized talent—such as supply chain experts, data scientists, or ESG consultants—tailored to the unique needs of portfolio companies. With a presence in every major market, VDS ensures PE firms can execute strategies with speed and precision, maximizing value creation in an increasingly competitive landscape.

Leadership Solutions → VDS Consulting

772-722-8811