The investment thesis is only as strong as the operating system that has to deliver it. Operator advisory gives PE firms and deal teams a commercial and operational read on the business behind the model.
Private equity value creation depends on operating performance. Most PE firms have strong financial engineering capability. The gap is usually in commercial and operational diagnosis — understanding why the business is or is not converting revenue into EBITDA and cash at the rate the model assumed.
Operator advisory fills that gap at three points in the investment cycle: before diligence closes, during the first 100 days, and when portfolio performance is not tracking to the value creation plan.
An operator’s review of the business before diligence closes. Identifying where the commercial model is robust and where it is fragile. Pricing architecture, working capital structure, EBITDA defensibility, customer concentration and management depth — tested before the investment thesis is committed.
Commercial baseline assessment, operational quick wins, management team capability review and working capital stabilisation. The first 100 days after acquisition are where value creation plans are either confirmed or complicated. See the first 90 days framework.
When EBITDA is not tracking to plan. When pricing discipline is breaking down. When working capital is deteriorating ahead of exit. Independent diagnosis of where the operating problem actually is — before the deal team commits to a response that may not address the right issue.
Financial diligence tells you what the business has earned. Operator diligence tells you whether it can keep earning it under new ownership — and what would need to change for the value creation thesis to be achievable.
The areas an operator assessment covers before diligence closes:
Reviewing reported versus normalised EBITDA. Identifying where earnings are defensible and where they are dependent on conditions that may change post-acquisition. Modelling the EBITDA bridge from current to target.
Assessing how pricing decisions are made and governed. Identifying where pricing leakage is occurring and what the margin improvement opportunity is if pricing architecture is strengthened.
Reviewing the working capital cycle — debtors, creditors, inventory — and modelling the cash release opportunity. The working capital improvement calculator is used to model scenarios.
Assessing whether the management team has the depth and execution capability to deliver the value creation plan — or whether key gaps will need to be addressed before execution can begin.
Once the investment is committed, the value creation plan needs to be sequenced correctly. Operator advisory provides the commercial and operational view that underpins execution planning.
The areas typically covered in value creation advisory:
“The investment thesis is only as strong as the operating system that has to deliver it. Most value creation plans fail not at the strategy level — but at the execution level.”Scott Foster · Shape Executive
Advisory is the right structure when the situation requires independent diagnosis before a response is committed to. When the situation requires embedded execution — when the operating problem needs to be solved inside the business rather than reviewed from outside — advisory transitions into a mandate.
For PE firms, that typically means moving from advisory into an operating partner engagement — where an experienced operator is embedded in the portfolio company to drive EBITDA improvement, working capital discipline and commercial performance during the hold period.
The advisory review usually defines the scope and urgency of what the embedded mandate needs to address. It is a more efficient entry point than deploying an operating partner into a situation that has not yet been diagnosed.
Operator advisory for private equity firms is one part of a broader set of PE-focused support available through Shape Executive.
Embedded execution
Operating Partner
Embedded operating partner support for industrial and distribution portfolio companies across APAC.
Post-acquisition
First 90 Days Value Creation
Structured framework for post-acquisition commercial and operational reset.
Boards & investors
Investment Work
Advisory work with boards, investors and deal teams on value creation, diligence and portfolio performance.
Operator advisory gives PE deal teams and portfolio managers an independent operator’s view of the business behind the investment thesis — before diligence, during the first 100 days, or when the value creation plan is not tracking to EBITDA targets. It covers commercial performance, working capital, pricing architecture, execution cadence and management capability.
Advisory is appropriate when the issue requires independent diagnosis rather than embedded execution — when the deal team needs a clear read on what is wrong before deciding how to respond. If execution support is required, advisory typically transitions into an operating partner mandate or interim CEO engagement.
The EBITDA bridge. Pricing architecture and margin leakage. Working capital position and cash conversion cycle. Management cadence and execution capability. Customer and channel profitability. Branch or network performance variability. These are the inputs that determine whether the value creation plan is achievable at the assumed EBITDA and timeline.
The first 100 days after acquisition are where value creation plans are either confirmed or complicated. Advisory support in this period covers commercial baseline assessment, operational quick wins, management team capability review, working capital stabilisation and the sequencing of improvement priorities before the business moves into full execution mode.
If the investment thesis requires an operator’s view on the business, that conversation is the right place to start.