Private Equity Firm: Partner

The Role of a Partner at a Private Equity Firm

The position of Partner at a private equity firm is a coveted one, and with reason. The private equity Partner is rewarded significantly higher compensation than associates (although they are paid very well too). The logic behind the dramatic pay increase is that a Partner has significant abilities in judging deals, managing employees and generating high profits for the firm.

Partners at private equity firms take on a wide range of responsibilities, but the Partner has four primary duties:

• Managing the Partnership and Operations: Typically Senior Partners oversee the overall productivity and performance of the firm and its employees and the day-to-day operational tasks are assigned to the other Partners. The degree in which each partner specializes in a certain area varies by the firm’s size and reach.
• Sourcing Deals: The majority of deals come from Partners, who use their extensive investment knowledge and experience in the industry, as well as their numerous contacts to find potential investment opportunities. In this way, Partners play a pivotal role in searching out and executing deals for the private equity firm.
• Supervising Investments: The degree that Partners are involved in the firm’s investments varies by deal but generally Partners take on at least a small role in monitoring the investment. This could be only a minimal hand in the company, such as a seat on the investment’s board. In other cases, the Partner takes on a very active role in the life of the investment by managing the operational aspects of an acquired company. The Partner’s involvement in the investment is meant to ensure its continued success which hopefully translates to profits for the private equity firm.
• Partner Relations: Finding new Limited Partners and maintaining good relationships with existing Limited Partners is another important duty of Partners. This is crucial for Partners because bad relations with investors could translate to a capital drought for the firm’s private equity funds.

While these duties are the most time-consuming and have the highest priority, a Partner must also make time to keep up on industry trends and stay ahead of the competition. Through trade shows, private equity forums and industry publications a Partner is able to keep up with the ever-evolving private equity industry. Another task is the mentoring of the young talent by overseeing their work with helpful criticism and advice, which has a two-fold benefit of increasing the efficiency of the firm through the Associates and grooming future management.

As you can see, Partners have a great deal of influence over the success of a private equity firm and therefore Partners are the top-tier of business professionals. The position is difficult but the compensation makes it well worth the effort for most Partners and the allure of a Senior Partner position makes the Partner role an envied rank in private equity firms.

For more info: Tuck Center for Private Equity

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