Tech Titans in Private Equity

Private equity (PE) firms have long relied on financial engineering to deliver returns, but in recent years, the focus has shifted. With competition intensifying, firms realized that deeper operational engagement was key to creating value. Technology emerged as a critical growth lever, helping businesses improve efficiency, engage customers, and open new revenue streams.

This shift has led to the rise of the Technology Operating Partner, a role that bridges the gap between financial oversight and operational leadership. As AI and other emerging technologies become integral to business success, more PE firms are adding this role to their teams to drive efficiency and profitability.

What Does a Technology Operating Partner Do?

While roles vary, Technology Operating Partners typically play a key role in due diligence, validating the technology aspect of an investment thesis. After a deal is completed, they help portfolio companies implement technology strategies to meet business goals. In some cases, they serve on boards, while in others, they offer advisory support.

The role is evolving. Many firms seek former Chief Information Officers (CIOs) with expertise in both foundational systems and innovative external-facing technologies. With AI and digital transformation becoming more central to growth, firms are increasingly looking for leaders with these specialized skills.

How the Operating Model Has Evolved

Initially, many firms relied on external technology advisors for support. Over time, they hired seasoned technology leaders to work full-time as Technology Operating Partners. These leaders started as “one-person armies,” but as the role gained importance, firms began building out specialized teams, covering areas like AI, digital, data, and cybersecurity.

Today, many firms integrate Technology Operating Partners directly into deal teams, elevating the role to that of a General Partner. This approach reflects the growing importance of technology in driving growth, with some experts predicting it will become the standard.

Engagement with Portfolio Companies

How Technology Operating Partners engage with portfolio companies depends on the role technology plays in the firm’s value creation plan. If technology transformation is central to the strategy, the partner works closely with the management team, including the CIO, CTO, and CEO, to implement the plan. If technology is less central, the partner may take on a more advisory role, often sitting on the board.

Successful Technology Operating Partners must cultivate strong relationships within the firm and with key executives at the portfolio company. The investment team must empower them to drive change, while collaboration with talent and other operating partners is essential for delivering results.

The cost structure for Technology Operating Partners impacts how firms build these teams. Some firms absorb the cost at the corporate level, while others charge it to the fund or portfolio companies. Each approach has trade-offs, and in times of financial pressure, firms may need to reassess these models.

What Makes a Successful Technology Operating Partner?

Selecting the right Technology Operating Partner is a challenge for private equity talent leaders, who identify candidates with high emotional intelligence (EQ), a business mindset, and strong technological expertise. As skills evolve, many traditional IT leaders lack the expertise to drive innovation in areas like digital transformation, Big Data, and generative AI—fields critical to value creation. In fact, over 82% of top executives in a Korn Ferry survey believe AI will significantly impact their business.

What makes a strong Technology Operating Partner? Key experiences and competencies include:

• Experience in PE firms or portfolio companies, with a focus on value creation.
• Hands-on leadership in multiple CIO roles and exposure across diverse industries.
• A robust network of consultants, service providers, and tech vendors.
• Intellectual curiosity and adaptability to evolving technologies.
• Proactive, commercially minded, and results driven.
• Ability to lead by influence in matrixed organizations.
• Humility, with success defined by portfolio company achievements.

Looking Ahead

As AI, digital transformation, and emerging technologies become central to private equity strategies, the demand for Technology Operating Partners will grow. These leaders must not only implement advanced technologies but also drive measurable business outcomes. Their role will be critical in reshaping portfolio companies, ensuring technology is a key driver of growth.

With market pressures increasing, Technology Operating Partners will need to work closely with investment teams and portfolio executives to integrate technology into all aspects of the business. As the role evolves, it will attract highly skilled professionals who can lead innovation and deliver transformative results.

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