Private Equity funds looking to hire Operating Partners? Five pieces of advice from our InX executive search experts
For a PE fund looking for their next Operating Partner, there are a lot of factors to consider. InX Senior Partner, Matt Harvey, shared his expert insights into the complex process.
Of course, it's important to carefully consider the right mix of skills and experiences, choose a qualified search partner to represent your brand and opportunity in the market, construct a comprehensive scorecard by which to assess candidate fit, and conduct in-depth references. On top of that we recommend:
Be aware of the trap of over-indexing required experiences towards a short-term portfolio problem. An Operating Partner's skills need to match your fundamental investment thesis and long-term strategy so if a skillset is only needed for the near-term, plug that with short term resources and make sure your long-tenure Operating Partner will serve you well into the future.
Tighten up your recruitment process. Candidates, HR heads and search partners regularly complain of unnecessarily lengthy and poorly planned selection processes riddled with bias, with senior figures hiring cookie-cutter suits on repeat and running starkly against PE’s DEI imperative. PE can learn from Google's 'rule of 5' (as opposed to PE’s usual 10+ round interview process) with senior interviewers being challenged to stick to focused skills-based interrogation, and to work collaboratively with other interviewers to ensure all bases are covered. As basic as this might sound, course-correcting wayward hiring processes will give funds a competitive edge in landing exceptional people, including diverse candidates from non-PE environments. Funds often say that you need more than 5 interviews to assess someone for a long-term hire, but regularly reject a candidate at latter stages for reasons that were apparent much earlier in the process. Trust your gut and cut them out earlier.
Do a case study interview based on real-world portfolio company problems. This is a great way to assess a candidate in a practical way, and also demonstrates to the candidate what their job could actually look like. Even after many interview rounds, industry & consulting candidates often remain unclear on what the operating partner job actually is.
Involve the deal team. Operating Partner recruitment is most effective when key deal team members are involved in the discussion of role during its formation, establishing what good looks like both in terms of the candidate and desired impact, and in the interview process. This secures alignment and buy-in early as they're invested in the hire and communicates a one-team ethos to the candidate (counteracting the 'second-class citizenship' complaint commonly heard during candidate diligence through their alumni networks).
Ensure you have a diverse slate of interviewers. This will lead to better and less biased decision making, and also help you land diverse executives.
The InX Private Equity team works hand in hand with investment funds and their portfolio companies to accelerate growth and performance. We use our extensive network of sector and functional experts to secure talented, entrepreneurial, and forward-thinking leaders both as Operating Partners within funds as well as high-impact executives inside their investments. Get in touch with our Private Equity team to find out how they can help you.