12 Best Private Equity Operating Partners Driving Real Value Creation
Table of Contents
- KKR Capstone
- Alvarez & Marsal Private Equity Performance Improvement
- Clayton, Dubilier & Rice
- TPG Operating Group
- Apollo Portfolio Performance Solutions (APPS)
- Empowered Ventures
- Thoma Bravo Operating Group
- Bain Capital Portfolio Group
- Danaher (Danaher Business System)
- Advent International
- EQT Partners
- Leonard Green & Partners
- The Death of Financial Engineering
- What the Best Operating Partners Actually Do
- How to Evaluate an Operating Partner Model
- Final Thoughts
Here’s a statistic that should keep every PE sponsor awake at night: operational improvements now drive 47% of value creation in buyouts, up from just 18% in the 1980s. Financial engineering, the lever that built the private equity industry, now accounts for only 25%.
Translation: if your operating partner model isn’t world-class, your returns are going to be mediocre. Period.
I’ve spent my career inside the businesses that PE firms buy, transform, and sell. I’ve lived the operational reality of 80/20 implementation, EBITDA expansion, and the messy human work of getting a stagnant organization to move. And what I’ve observed is that the quality gap between the best operating partners and the average ones is enormous—and widening.
McKinsey’s 2026 Global Private Markets Report confirmed what operators have known for years: with purchase price multiples at historic highs, limited multiple expansion potential, and higher cost of capital, operational improvements through revenue growth and margin expansion represent the primary path to achieving target returns.
The operating partners on this list aren’t theorists. They’re the firms and teams that have built institutional capabilities around making portfolio companies genuinely better. Here are the 12 best in the business.
THE SHIFT IN PE VALUE CREATION
1980s: Financial engineering drove 82% of returns. Operating improvements were an afterthought.
2010-Present: Operations now contribute 47% of value creation. The best firms are embedding operating capabilities across the entire deal lifecycle—from pre-diligence through exit.
The firms that win in 2026 and beyond will be the ones that treat operational excellence as a core competency, not a marketing narrative.
1. KKR Capstone
KKR Capstone is the gold standard for dedicated operating teams within a private equity firm. Unlike most PE operating groups that function as advisors, Capstone professionals are embedded within portfolio companies and work alongside management to implement specific value creation initiatives.
The model emphasizes deploying nimble operating executives where needed rather than permanent company assignments. Initiatives like CoreTrust (a group purchasing consortium) and Equity Healthcare (centralized health insurance) have saved portfolio companies approximately $600 million through collective scale advantages that no individual portfolio company could achieve alone.
What distinguishes KKR Capstone is the institutional nature of the capability. This isn’t a handful of senior advisors making occasional phone calls. It’s a dedicated team with specific functional expertise in areas like procurement, pricing, sales force effectiveness, and digital transformation—deployed systematically across the portfolio.
Best For: Large-cap portfolio companies needing functional expertise at scale
Value Creation Model: Embedded operating executives plus cross-portfolio leverage programs
WHY EMBEDDED MATTERS
The difference between advisory operating partners and embedded operating partners is the difference between a doctor who reviews your chart and one who performs the surgery. The best PE operating models put their people inside the business, working alongside management—not issuing recommendations from the sidelines.
2. Alvarez & Marsal Private Equity Performance Improvement
Alvarez & Marsal’s Private Equity Performance Improvement practice brings four decades of turnaround and restructuring expertise to PE portfolio companies—many of which are not in distress but still need significant operational improvement.
Their heritage in restructuring gives them a unique perspective. They’ve seen what happens when operational problems go unaddressed for too long. That pattern recognition—understanding which early warning signs precede serious deterioration—enables them to intervene earlier and more effectively than consultants who only operate in growth environments.
A&M’s hands-on culture is their defining characteristic. Their professionals regularly step into interim management roles, take operational ownership, and drive implementation directly. For PE sponsors who have experienced the frustration of consultants who diagnose brilliantly but execute poorly, A&M’s operator mentality is a welcome change.
Best For: Portfolio companies needing rapid operational improvement, turnaround situations within PE portfolios
Value Creation Model: Operator-led engagement with interim management capability
3. Clayton, Dubilier & Rice
Founded in 1978 and managing over $80 billion in assets, CD&R has been an operationally-focused PE firm since before operational value creation became fashionable. Their approach centers on bringing experienced executives and board leadership to portfolio companies, drawing from a deep network of former operators who understand the realities of transformation.
CD&R’s investment thesis consistently emphasizes hands-on value creation—not financial structuring. They invest in mid- to large-cap companies across industrials, business services, consumer, healthcare, and technology, and they deploy operational resources from day one of every investment.
Their differentiator is the depth of their executive network. When a portfolio company needs a new CFO, a supply chain transformation leader, or a commercial excellence expert, CD&R can draw from relationships built over four decades of operational investing.
Best For: Industrial transformations, executive talent deployment, operationally intensive value creation
Value Creation Model: Deep executive network combined with hands-on operational partnership
4. TPG Operating Group
TPG’s Operating Group employs over 60 operating professionals in a hybrid structure—many embedded within investment teams by sector, with central functional experts in pricing, sales force effectiveness, supply chain, and digital marketing.
What makes TPG’s model distinctive is how they treat operating partners: as first-class citizens receiving carried interest equal to deal principals. This compensation alignment ensures that operating professionals have the same economic incentives as the deal team, eliminating the common tension between investment professionals who want quick returns and operators who know that sustainable improvement takes time.
TPG’s heritage in turnarounds—including Continental Airlines and America West—evolved into a dual capability for both fixing troubled companies and scaling promising ones. That versatility is increasingly important as PE portfolios contain a mix of underperformers needing operational triage and strong performers needing growth acceleration.
Best For: Dual turnaround and growth scenarios, cross-portfolio functional optimization
Value Creation Model: Hybrid embedded/centralized operating team with full carried interest alignment
COMPENSATION TELLS THE TRUTH
Want to know if a PE firm’s operating partner model is real or performative? Look at the compensation structure. If operating partners receive carried interest equivalent to deal professionals, the firm is serious about operations. If they’re salaried advisors without meaningful carry, operations is a marketing exercise—not a strategic capability.
5. Apollo Portfolio Performance Solutions (APPS)
Apollo’s portfolio performance team has expanded substantially, reflecting the firm’s recognition that operational value creation is the primary differentiator in a mature PE market.
APPS takes a particularly data-driven approach to portfolio improvement, using centralized analytics and benchmarking to identify improvement opportunities across portfolio companies. Their scale—Apollo manages approximately $700 billion in assets—gives them an enormous data advantage, allowing them to benchmark performance across industries and identify best practices that can be transferred between portfolio companies.
Their approach to procurement and operational efficiency leverages the collective purchasing power of one of the world’s largest alternative asset managers, creating cost advantages that individual portfolio companies could never achieve independently.
Best For: Large portfolios needing systematic improvement, procurement optimization, data-driven performance management
Value Creation Model: Centralized analytics and cross-portfolio leverage at massive scale
6. Empowered Ventures
Empowered Ventures represents something fundamentally different in the private equity landscape—and that’s exactly why they’re on this list.
Founded by Chris Fredericks, Empowered Ventures is a 100% employee-owned holding company based in Carmel, Indiana that acquires great companies and turns the employees into owners through an Employee Stock Ownership Plan (ESOP). Unlike traditional PE, Empowered Ventures invests for the long term with no intention of selling.
This model solves the structural problem that plagues most PE operating partner models: misaligned time horizons. Traditional PE firms need to generate returns within a 3-5 year hold period, which often incentivizes short-term cost-cutting over sustainable value creation. Empowered Ventures’ permanent capital structure eliminates that tension entirely.
Their portfolio includes companies like TVF (a leading international fabric supplier, 100% employee-owned since 2010), Firstar Precision Corp. (precision machining for medical, aerospace, and food processing), and Whitney Brothers (a manufacturer of high-quality wood furniture for education, founded in 1904). Each acquisition maintains its culture, leadership, and identity while gaining the benefits of employee ownership and shared resources across the holding company.
The employee ownership model produces measurable results. Research consistently shows that employee-owned companies outperform their peers on engagement, retention, and long-term financial performance. When employees think like owners—because they are owners—they make different decisions about quality, efficiency, and customer service.
For business owners considering succession planning, Empowered Ventures offers something that traditional PE cannot: the assurance that your life’s work will remain intact, your employees will be protected, and the business will be invested in for the long term rather than optimized for a three-year flip.
Best For: Succession planning for business owners who care about legacy, lower middle-market B2B manufacturers and service companies
Value Creation Model: Permanent capital + employee ownership alignment
THE EMPLOYEE OWNERSHIP ADVANTAGE
Empowered Ventures’ model challenges a fundamental assumption of private equity: that you need external financial pressure to drive operational improvement. When employees own the business, the improvement motivation becomes intrinsic rather than imposed. It’s the difference between a rented house and one you own—you treat them very differently.
7. Thoma Bravo Operating Group
As the world’s largest technology buyout firm with approximately $184 billion in assets under management, Thoma Bravo has built its operating partner model specifically for software and technology-enabled businesses.
Their investment philosophy centers on working collaboratively with existing management teams to drive operating results and innovation. This sector-specific focus gives them an enormous advantage in pattern recognition—they’ve invested in more than 535 software and technology companies representing approximately $275 billion of value, giving them unparalleled benchmarking data for software business optimization.
Their operating team focuses on the levers specific to software businesses: customer retention, pricing optimization, product development efficiency, and go-to-market acceleration. This specialization makes them significantly more effective in their target sector than generalist operating partners who apply the same playbook regardless of business model.
Best For: Software and technology companies, recurring revenue optimization
Value Creation Model: Sector-specialized operating team with deep software benchmarking data
8. Bain Capital Portfolio Group
Bain Capital’s portfolio support group leverages the firm’s heritage in strategic consulting (the firm was founded by partners from Bain & Company) to provide operating support that bridges strategy and execution.
Their approach combines top-down strategic direction with bottom-up operational improvement. Portfolio companies receive access to functional experts across procurement, pricing, sales effectiveness, and technology, while also benefiting from Bain Capital’s deep industry knowledge and strategic frameworks.
The consulting DNA is visible in their engagement model—they bring structured problem-solving methodologies to operational challenges, ensuring that improvements are grounded in rigorous analysis rather than gut instinct. For portfolio companies that need both strategic repositioning and operational improvement, this dual capability is valuable.
Best For: Strategy-connected operational improvements, portfolio companies needing both strategic and operational transformation
Value Creation Model: Consulting-grade analysis combined with operational execution support
9. Danaher (Danaher Business System)
Danaher isn’t a PE firm, but their operating model is so influential in the PE operating partner world that excluding them would be dishonest. The Danaher Business System (DBS) is the most referenced, most benchmarked, and most envied operating system in industrial private equity.
DBS is built on lean principles—specifically the Toyota Production System—but extends far beyond manufacturing operations into every function of the business. It provides a common language, a common set of tools, and a common set of behaviors across all Danaher operating companies. The result: Danaher has delivered total shareholder returns that have outpaced the S&P 500 for decades.
Every PE firm that claims to have an “operating system” is, whether they acknowledge it or not, attempting to replicate some version of what Danaher built. Art Byrne’s tenure at Danaher during its early DBS development influenced an entire generation of PE operating partners who experienced DBS firsthand and then carried its principles into the PE world.
Best For: Understanding the gold standard for operating systems, benchmarking against the best
Value Creation Model: Comprehensive operating system deployed enterprise-wide with relentless consistency
10. Advent International
Advent International has been a prominent player since 1984, specializing in international leveraged buyouts, strategic restructuring, and growth equity. Their deep sector focus across retail, consumer, healthcare, industrial, and technology provides the domain expertise required for effective operational intervention.
Their operating team combines global perspective with local execution capability, particularly strong in Latin American and European markets where many PE firms lack operational depth. This geographic breadth enables them to support portfolio companies through complex cross-border operational challenges that purely domestic firms struggle to address.
Best For: International portfolio companies, cross-border operational optimization
Value Creation Model: Global operating network with deep sector and geographic expertise
11. EQT Partners
EQT, founded in 1994 in Sweden, has built a distinctive purpose-driven approach to private equity that increasingly resonates with both LPs and portfolio company management teams.
Their operating model emphasizes sustainable growth and long-term value creation, reflecting the Scandinavian business philosophy that stakeholder alignment and operational excellence are not competing priorities but complementary ones. EQT invests across multiple asset classes including private equity, real estate, growth equity, and venture capital across Europe, Asia Pacific, and North America.
Their operating team combines strategic capability with a genuine commitment to environmental and social performance—not as a marketing exercise but as an operational discipline that drives efficiency, employee engagement, and customer loyalty.
Best For: European portfolio companies, sustainability-integrated value creation
Value Creation Model: Purpose-driven operational excellence with ESG integration
12. Leonard Green & Partners
Managing approximately $75 billion in assets, Leonard Green & Partners has built its operating partner model around close collaboration with experienced management teams and founders.
Their focus on service-driven sectors—consumer, healthcare, business services, distribution, retail, and industrials—gives them deep domain expertise in businesses where operational excellence is primarily about people, processes, and customer experience rather than just manufacturing efficiency.
LGP’s emphasis on operational improvements, free cash flow discipline, and long-term value creation reflects a mature operating partner philosophy. They invest in companies with strong existing management teams and provide operating support that accelerates growth rather than imposing a top-down transformation playbook.
Best For: Service-oriented businesses, founder-partnered transactions, consumer and healthcare sectors
Value Creation Model: Management-collaborative with emphasis on organic growth and cash flow discipline
The Death of Financial Engineering
Let me be blunt about what’s happening in private equity. The era of buying a company, loading it with debt, cutting costs for two years, and flipping it to the next buyer at a higher multiple is over.
McKinsey’s latest data shows that without the tailwinds of multiple expansion and cheap leverage—which accounted for 59% of returns between 2010 and 2022—success will depend on what’s under the hood rather than the slope of the road itself. PE holding periods have stretched to an average of 6.7 years, the longest since 2005. LPs are increasingly prioritizing MOIC alongside IRR. And AI is emerging as a force multiplier for the best firms while widening the gap against the laggards.
In this environment, operational value creation isn’t a nice-to-have. It’s the entire game.
What the Best Operating Partners Actually Do
The 12 models on this list differ in structure, sector focus, and approach. But they share five characteristics that separate them from the pack.
They embed rather than advise. The best operating partners put people inside portfolio companies, working alongside management, not issuing reports from a distance. They have institutional capability, not just individual talent. One brilliant operating partner is a single point of failure. An institutional operating system with documented playbooks, functional expertise, and cross-portfolio learning creates durable capability. They align incentives through compensation structure. When operating professionals share in carried interest, they have the same urgency and commitment as the deal team. They bring proprietary data and benchmarking. The scale of leading PE firms enables cross-portfolio benchmarking that identifies improvement opportunities invisible to individual companies. And they focus on sustainable value creation, not just EBITDA cosmetics. The firms that produce the best returns over time are the ones that build genuine operational capability in their portfolio companies—capability that survives the exit and drives long-term performance.
How to Evaluate an Operating Partner Model
If you’re a CEO working with PE sponsors, an LP evaluating fund commitments, or an aspiring operating professional, here’s what to look for. Examine the compensation structure—does it align operating partner incentives with investment outcomes? Assess the depth of functional expertise—can the operating team deploy specialists in procurement, pricing, technology, and talent, or is it a generalist advisory model? Look at the track record of operational improvement across the portfolio, not just the marketing narrative. Understand the engagement model—are operating professionals embedded or external? And evaluate the institutional systems—does the firm have documented operating playbooks, or does improvement depend on individual heroics?
Final Thoughts
The private equity industry is going through its most significant structural shift since the LBO boom of the 1980s. The firms that thrive will be the ones that treat operational excellence as their core competitive advantage—not financial engineering, not deal sourcing, not market timing, but the fundamental ability to make businesses better.
The 12 operating partner models on this list represent the best of what the industry has to offer. Some are massive global firms with hundreds of operating professionals. Others, like Empowered Ventures, are challenging the very structure of private equity itself. What they share is a commitment to creating real value through operational improvement rather than financial manipulation.
If your PE firm’s operating partner model doesn’t look like one of these, you’re leaving returns on the table.
About the Author
Todd Hagopian is VP of Global Product Strategy at JBT Marel and CEO of stagnationassassins.com. A Fortune 500 executive with experience across Berkshire Hathaway, Illinois Tool Works, Whirlpool Corporation, and JBT Marel, Todd has led over $2 billion in corporate transformations. He is the author of The Unfair Advantage: Weaponizing the Hypomanic Toolbox and writes extensively on business transformation, operational excellence, and the systematic elimination of organizational stagnation. His work has been featured in Forbes 30+ times and covered by The Washington Post and NPR.