Sponsors used to hire a portfolio company COO to keep the business running while the deal team worked on the equity story. That brief no longer holds. With holds running longer, leverage doing less of the work and returns depending on what management actually delivers, the COO has become the person who turns the value creation plan into results. Sponsors now want an operator who can move EBITDA, free up cash and have the business ready to sell.
Why the portfolio company COO brief has changed
The arithmetic of private equity has shifted. In its 2026 Global Private Equity Report, Bain & Company coined the rule of thumb “12 is the new 5”. In the 2010s, a typical deal needed only 5% annual EBITDA growth to return 2.5 times the money invested over five years. Today, Bain finds, typical deals need around 10% to 12% average annual EBITDA growth to deliver the same result. As Rebecca Burack, head of Bain’s global Private Equity practice, put it: “Generating attractive returns now requires significantly more operational improvement and revenue growth.”
McKinsey makes the same point from the other direction. Its Global Private Markets Report 2026 notes that multiple expansion and cheap leverage accounted for 59 percent of returns between 2010 and 2022. Without those tailwinds, it argues, operational value creation “is now likely to be the primary source of returns” for sponsors and their investors.
Time is the other pressure. Bain puts the holding period at exit for buyout funds at around seven years, up from an average of five to six years between 2010 and 2021. In North America, Mergermarket data published by ION Analytics on 5 November shows the average hold period at exit is now 6.25 years, more than two years longer than in 2020. A COO hired at the start of a hold may now be the COO who has to deliver the exit.
And the plans themselves are not always landing. In the Alvarez & Marsal European value creation survey published in May 2026, 65% say that less than 50% of value creation plans developed in the past two years have been fully realised. That is a delivery problem, and delivery is the COO’s job.
What sponsors now want from a portfolio company COO
Across the private capital searches we see, the brief has narrowed to a handful of things the sponsor will judge the COO on.
1. Ownership of delivery from the first 100 days
Sponsors are moving faster. Alvarez & Marsal found that 58% deploy value creation resources in the first 100 days, up from 29% the year before. A COO who needs six months before acting is out of step with that. The strongest candidates arrive with a view on the plan and the credibility to start quickly.
2. Cash and working capital, not just cost
In the same survey, 83% expect working capital initiatives to become more important in the next 12 months. Inventory, payment terms, billing and procurement sit closer to the COO than to anyone else. Our view is that the COO and CFO now share the cash agenda: the CFO forecasts it, the COO frees it up. We set out the CFO side of that partnership in What PE Sponsors Need From a Portfolio CFO in 2026.
3. Commercial operations as well as the back office
Alvarez & Marsal found that 68% cite pricing as their most prioritised revenue growth lever. Pricing only works when operations can support it: clean data, disciplined quoting, service levels that justify the price. That pulls the COO into the commercial engine of the business, not just its cost base.
4. Integration that actually happens
Where the strategy is a platform with add-ons, the COO is usually the integrator. Sponsors want someone who has combined systems and teams before, and who tracks synergies rather than assuming them.
5. Technology and AI tied to numbers
McKinsey describes AI as “a force multiplier for the best firms”, including in “accelerating operational improvements”. Sponsors do not want a COO who talks about AI. They want one who can show where automation cut cost or time in a previous business, and who knows which controls need to change when it does.
6. A business that is ready to sell, or to wait
Alvarez & Marsal found that 45% describe assets in continuation funds as performing but needing more time to reach potential. The COO has to build an operation that will stand up to buyer diligence on a sale, and that can keep improving if the sponsor decides to hold for longer.
Operator, not administrator
For years, the portfolio COO was often the person who held the business together: a strong manager of process, people and suppliers. Today, we are seeing a very different profile in demand. Less steady hand. More accountable owner of value creation.
That has consequences for who gets hired. Sponsors increasingly favour COOs who have been through a full private equity cycle, who are comfortable reporting against a value creation plan on the sponsor’s timetable, and who can work alongside operating partners and advisers rather than around them. Bloomberg reported on 4 November that buyout firms are leaning more on external operating talent to ramp up asset value, adding layers of project fees. A strong COO inside the business is one way to make sure that work sticks once the advisers leave.
It also means some incumbent COOs will not fit the new brief. That can be a difficult conversation, particularly where the incumbent built the business the sponsor bought. But it is better had at the start of the hold than two years in, when the plan is behind.
Sponsors should also be clear which role they need. A COO builds an engine for scale; a Chief of Staff keeps the leader organised. We explain the difference in our guide to the COO and Chief of Staff roles.
Questions for sponsors and boards
- Which three numbers in the value creation plan will the COO personally own, and are they written into the role?
- Has our COO delivered a value creation plan under private equity ownership before, or only run a stable business?
- Do the COO and CFO share a single plan for cash, or two separate ones?
- If the exit slips by two years, is this still the right operator for the business?
- How much of our operational improvement depends on outside advisers, and who keeps it going when they leave?
A portfolio company COO used to be judged on how smoothly the business ran. Now they are judged on how much more it is worth.
Talk to us
Phoenix Search appoints COOs, CFOs, chief executives and board members for private equity backed businesses and private capital firms across Ireland, the UK and the US. If you are hiring a portfolio company COO, reviewing leadership after an acquisition or preparing a business for exit, explore our private capital executive search and operational leadership search practices, or contact our team for a confidential conversation.
