Operating Partner Model Connection to Accelerated Value for PE Firms

Room for Continued Growth as Concept is still in its infancy in Europe compared to the U.S.

(Boston, Mass. – June 24, 2015) Most private equity executives (60%) deploy the concept of an operating partner, and 72% find that it delivers accelerated value for private equity firms, according to a Snap Shot survey conducted by Maine Pointe.

“It is clear that operating partners on their own cannot achieve accelerated operational performance improvements that are required to meet the return goals expected from LPs,” said Jorg van der Zanden, Managing Director of Maine Pointe’s European Operations. “This means that there will be an increasing need for specialized capability that the operating partner concept yields and a broadening and maturing of the concept,” he added.

The survey and face-to-face interviews of more than 50 industry executives from the Americas and Europe reveals that while the concept of operating partners continues to build momentum, the space is not yet mature, offering continued room for growth. The concept of an operating partner is still in its infancy in Europe where just 53% of respondents have deployed the model, compared with 75% in the U.S., but overall the concept is being propelled by the fact that over 70% of respondents indicated that they had seen increasing interest from LPs to strengthen their operating partner type capability. Almost all (90%) of executives believe that there will be an increase in the importance operational improvements will play in achieving their return goals.

Other findings from Maine Pointe’s Snap Shot Survey include:

• The operating partner concept is emerging in Europe with 13% of respondents actively considering deploying it
• Firms use a combination of in-house and specialist external operational improvement expertise to drive value
• Approximately one third of respondents achieved a 51-70% return on operational improvements, and a further 10% were able to deliver even higher returns

The snap shot survey was conducted online and through confidential direct conversations with 50 Private Equity executives across the United States and Europe during April and May 2015. The executives represented a wide variety of industry sectors and companies ranging in size from small to large, with an average of US$11 billion in assets. 

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About Maine Pointe

Maine Pointe’s Private Equity engagements have collectively delivered over $2 billion in value to our clients. Maine Pointe is a results-driven, implementation focused consulting firm that is trusted by over 30 private equity firms and chief executives around the world to deliver sustainable, significant value and compelling economic returns for their businesses. We achieve this through transforming the global supply chain into a competitive weapon and accelerating business value through performance improvements in both EBITDA and Cash.

Our teams of industry specialists perform due diligence and deliver implementation services that drive sustainable benefits in the areas of procurement, logistics and operations in both asset-intensive and asset-light businesses.