As private equity firms face longer hold periods, rising LP scrutiny, and shrinking returns from financial engineering, operating talent has moved from support function to strategic differentiator. A new compensation study from Press & Associates reveals just how dramatically the market has shifted — and what it means for private equity firms, executive recruiters, and investors navigating the next phase of value creation.
The recently released 2026 U.S. Private Equity Portfolio Operations Compensation Report from Press & Associates confirms what many in the market have sensed for years: operational professionals are no longer second-tier players inside private equity firms. They are rising in stature and closing the compensation gap with investment teams, gaining broader carry participation, and increasingly sitting at the decision-making table.
The report makes clear that this is not cosmetic. It reflects instead a structural shift in how value is created. Operational improvements now drive roughly half of private equity returns, up from about 30% in the 1980s, while financial engineering has declined materially as a driver of IRR.
At the largest funds — $25B+ AUM — operating partners now earn $1.0M to $1.75M+ in total cash compensation, alongside $10M to $60M+ in carried interest dollars at work.
Carry eligibility among senior operating professionals has expanded to 80–92%, approaching parity with deal teams.
In short: the economics have changed.
The report also highlights a meaningful professionalization of the role. PE-to-PE operating partner movement has tripled in recent years, now representing 21% of new hires, compared to just 7% in 2022.
At the same time, CEO hires into operating roles have declined, signaling that running one company is no longer considered a proxy for scaling twenty.
For executive search firms and human capital advisors, this shift reflects a permanent redefinition of the portfolio operations function — and a more competitive, compensation-driven talent market.
To unpack what is changing — and what it means for private equity firms trying to build durable operating capability — Leo Cummings, an associate at Hunt Scanlon Ventures, sat down recently with Paul Press, managing partner of Press & Associates. Here is an abbreviated extract from their conversation.
Strategic Shift: Operating Talent as Differentiator
Paul, what changed in private equity that pushed firms to take operating talent more seriously than in the past?
The math changed, and so did the competition for capital. Operational improvements now drive roughly half of PE value creation — up from about 30% in the 1980s — while financial engineering has fallen to around 25%. At the same time, there are now more PE funds in North America than McDonald’s franchises — about 19,000 — and LPs are scrutinizing managers more closely than ever. In that environment, having credible operators who can demonstrably drive better IRR isn’t optional, it’s how firms differentiate themselves and win allocations.
How has the shift toward operational value creation altered what firms now expect from operating partners?
Firms aren’t looking for advisors who parachute in quarterly anymore — they want operators who can own a value creation plan end-to-end, from pre-deal diligence through exit. The profile has shifted accordingly: PE-to-PE hires have tripled from 7% to 21% since 2022, while CEO hires have dropped from 26% to 17%, because running one company doesn’t always translate to improving twenty.
“Firms aren’t looking for advisors who parachute in quarterly anymore — they want operators who can own a value creation plan end-to-end.”
What do you see break down inside firms that still bring operating professionals in only after the deal closes?
You get a value creation plan that’s disconnected from the deal thesis, and an operating partner who’s playing catch-up instead of shaping the trajectory from day one. It also sends a clear signal to the operating team about where they sit in the hierarchy — and the best talent reads that signal quickly.
At what point in the deal process do operating leaders need to be involved to actually move the needle — and why?
Before the LOI is signed. When operating partners are in the room during diligence, their assessment shapes the bid price, surfaces risks the deal team may miss, and produces a 100-day plan that’s ready to execute at close — not one that’s being drafted six weeks into ownership.
Compensation, Competition & Career Maturity
Beyond pay, what really determines whether top operating talent chooses one firm over another today?
Influence. The best candidates are screening for investment committee participation, pre-deal involvement, and whether they’ll be treated as true partners or service providers to the deal team. Firms that offer those three things report significantly faster time-to-hire and higher acceptance rates in our searches.
“The firms that win long-term will be the ones that treat operating talent as a strategic investment, not a cost center.”
How intense has competition become for experienced operating professionals, and where are firms falling short in attracting them?
It’s as competitive as I’ve ever seen it. Carry eligibility has expanded to 80–92% at senior levels, and the firms winning talent are those compensating operating partners in alignment with the value these professionals actually create. Where firms fall short is clinging to legacy structures — bringing operating partners in post-close, keeping them off the IC, and undervaluing operational contributions in the comp structure. Top candidates won’t entertain those setups anymore.
What does the increased movement of operating talent between firms tell you about how this role is maturing?
It tells you this is now a real career track, not a retirement landing spot. Five years ago, almost no one moved PE-to-PE for an operating role. Today, one in five operating partner hires comes from another fund. That’s the clearest sign the market has professionalized — and it means firms need to think about retention just as seriously as recruitment.
Looking ahead, what will separate firms that build durable operating capability from those that don’t?
The firms that win long-term will be the ones that treat operating talent as a strategic investment, not a cost center — that means compensation aligned with the value these professionals drive, IC seats, early deal integration, and genuine cultural parity with the deal team. The ones still running legacy models are going to find it increasingly difficult to attract the caliber of talent they need, and LPs are already noticing the difference.
Implications for Executive Search and Human Capital M&A
The implications extend well beyond portfolio ops compensation.
As operational value creation becomes the dominant driver of returns, private equity firms are underwriting leadership capability earlier in the investment lifecycle.
That shifts demand toward executive search firms that can source seasoned operating professionals with cross-fund experience and measurable track records.
It also raises the strategic value of human capital advisory platforms that specialize in value creation teams — a segment increasingly attractive in human capital M&A as firms look to consolidate expertise in operating partner recruitment and compensation advisory.
The 2026 compensation report makes one thing clear: the operating function is no longer a support system. It is a competitive moat.
For executive recruiters, investors, and human capital advisors alike, that changes the game.
Article By
Leo Cummings
Leo Cummings is Editor of ExitUp, the investment blog from Hunt Scanlon Ventures designed for professionals across the human capital M&A sector. Leo serves as an Associate for Hunt Scanlon Ventures, providing robust industry research to support the firm’s investment group.
