Why Operators Are the New Dealmakers in Private Equity, According to Greg Head

In a recent LinkedIn post, Greg Head discusses a significant shift he’s observed in the private equity (PE) hiring landscape, highlighting how traditional hiring criteria are becoming outdated. Head, drawing on his 25 years of experience on both sides of the table, argues that private equity firms are increasingly overlooking valuable operational talent by adhering to old-school hiring preferences.

Head begins by recounting an observation from the past month where three private equity firms reportedly passed on the same candidate. The common reason cited was the candidate’s background in “operations.” This, according to Head, represents a fundamental misunderstanding of the evolving needs within the PE industry.

“Five years ago, that made sense. PE wanted bankers. Deal makers. Financial modelers who could build a three-statement model in their sleep. Operations people were for after the deal closed.”

The Evolving Role of Private Equity

Greg Head argues that the traditional PE playbook, which relied heavily on deal sourcing and financial engineering, is no longer sufficient for success. He points out that the market is saturated with deal flow, making it difficult to find undervalued assets solely through superior sourcing.

Instead, Head emphasizes that the real value creation and competitive advantage for PE firms now lie in the post-acquisition phase. This is where operational expertise becomes paramount. He states that the ability to improve existing businesses, rather than just acquiring them, is the key differentiator for firms aiming for high returns.

Operators as the New Hires

Head highlights a crucial shift: the best hires for PE firms are no longer exclusively coming from traditional finance backgrounds like investment banking at firms such as Goldman Sachs or Lazard. Instead, he asserts that former Chief Operating Officers (COOs) and VPs of Operations are becoming the most sought-after candidates.

These individuals, often referred to as “operators,” have direct experience running the types of businesses that PE firms acquire. Their practical knowledge in areas like sales process improvement, systematizing operations, and optimizing cash conversion cycles without damaging company morale is what PE firms now desperately need.

“Winning now happens in the 100 days post-close. Can you fix the leaky sales process? Systemize the chaos? Cut 90 days from cash conversion without destroying morale? Operators know how. Bankers don’t.”

The Future of PE Success

According to Greg Head, PE firms that will achieve significant financial success in the coming years will be those that excel at operational improvement. He contrasts this with firms that focus solely on deal flow.

He elaborates on this point, stating:

“The PE firms printing money in 2025 aren’t the ones with the best deal flow. They’re the ones who can take a messy $8M EBITDA business and turn it into a clean $15M exit in 36 months. That requires someone who’s actually done it. Not modeled it.”

Head concludes with a direct call to action for operations professionals. He suggests that those who believe private equity is inaccessible to them are mistaken and are, in fact, “five years behind.” The opportunity for operators to transition into the PE world, he argues, is now wide open.

“If you’ve run operations and think PE is closed to you, you’re five years behind. The door just opened”

Head’s analysis suggests a fundamental recalibration of what constitutes valuable expertise within the private equity sector, moving from financial acumen alone to a blend of financial and deep operational know-how.