Why Private Equity Firms Are Rethinking Technology Leadership

I wanted to write this because I'm in an unusual position to speak to it. I spend a significant amount of time working with two groups who often don't know each other: exceptional technology leaders trying to break into private equity, and partners at PE firms struggling to work out exactly what DNA they're looking for in a technology operating partner or portco tech leader who can genuinely exploit the value that new technology can drive. And I'll note: I hesitate to single out AI as the only technology that matters here, even if it's the one dominating the conversation right now.

What makes my vantage point a little different is that I'm not just finding these leaders for PE firms. I'm also working with firms to assess candidates and design success profiles for roles that don't yet have a clear blueprint, and then working closely with the appointed leader through six months of executive integration coaching to support how these leaders land and embed. That means I'm not just seeing who gets hired. I'm seeing, anecdotally, what actually happens next. I hear a lot...

The Role Without A Blueprint

Private equity firms in Australia are in the middle of a hiring conversation that is proving more challenging than expected. The question on the table isn't whether AI and technology matter for portfolio value creation. That argument is well and truly settled. The question is who, specifically, should be responsible for turning that potential into a number a board will recognise, and what that person is actually supposed to look like.

The role that keeps coming up, in searches I'm running, in conversations with operating partners and investment teams, and in the broader international market, is the Technology Operating Partner. It goes by different names: AI and Digital Transformation Operating Partner, Head of Data Science and AI, Portfolio Technology Partner. The title varies. The mandate is consistent: one person who can work across the firm and its portfolio simultaneously, influencing what gets acquired on one side and what gets built inside portfolio companies on the other. I've placed 2 of these already this year, and both roles had very different PD's.

It's a genuinely new role. It doesn't have a really clean precedent in corporate leadership. The closest analogue, a Chief Technology Officer, doesn't quite fit because the CTO owns a single company's technology function and operates with direct authority over a team. The Technology Operating Partner owns nothing directly and has authority over almost no one. They work through influence, persuasion, credibility, and pace. Finding someone who can do that well is harder than the job description makes it look.

The international market is starting to formalise this role. For example, In January 2026, Berkshire Partners, a Boston-based mid-market PE firm investing from a fund of approximately A$11 billion (US$7.8 billion), announced the appointment of Richard Lichtenstein as Operating Partner, Head of Data Science and AI, in a newly created role. Lichtenstein joined from Bain and Company, where he served as Chief Data Officer for Private Equity. The announcement made the dual mandate explicit: the role works with both the investment team and the Portfolio Support Group simultaneously. That's the structure that makes the role work, and it's the structure most Australian PE firms are really only just now starting to get their head around.

Why the Role Exists Now

The honest answer is that financial engineering alone no longer produces the returns it once did. McKinsey's research shows that PE operating groups globally have more than doubled in size since 2021, regardless of fund size, with the sharpest growth in technology and AI specialists. The same research found that 60 per cent of those operating professionals are now involved in diligence itself, not just post-close transformation. Technology leadership has moved from a portfolio management function to part of the investment underwriting process.

At the portfolio company level, the picture is more mixed. Among global investors representing more than A$4.5 trillion (US$3.2 trillion) in assets under management, a clear majority of portfolio companies were testing generative AI in 2024. Only about one in five had turned that testing into something with a measurable result. BCG's research on the AI-first PE firm explains the gap precisely: most portfolio companies are still in what BCG calls deploy mode, handing out software licences and expecting productivity gains to follow. The firms generating real returns have moved to reshape mode, fundamentally rethinking roles and operating models so improvements actually reach the P&L. The most advanced are beginning to invent, building new product and service offerings in which AI is integrated into the core value proposition. Moving a portfolio through those three stages is what the Technology Operating Partner is actually hired to do.

The DNA: Where These People Actually Come From

This is the part of the conversation I have most often, and the part where the answer has become surprisingly consistent across the searches I've run over the past twelve to eighteen months.

The strongest candidates for technology operating partner roles in Australian PE are not coming primarily from corporate CTO or CIO backgrounds, even senior ones. They're coming from the enterprise technology and digital practices of the major strategy firms. Specifically: Bain's enterprise technology practice, Accenture Strategy, BCG's Technology and Digital Advantage and BCG X practices, and McKinsey's technology and digital work.

The reason this background works so well is structural rather than incidental. These people have spent their careers doing something that looks, at the right angle, almost exactly like what a technology operating partner needs to do: arriving inside a complex organisation facing a technology transformation challenge, diagnosing what's actually wrong beneath the surface, designing an operating model that can deliver real change, and then either supporting or leading the execution before moving to the next engagement. They've done this across multiple industries and multiple types of organisations. They understand the strategic and the operational dimensions simultaneously. They can engage at board level in the language of value creation rather than technology delivery.

What they also bring, critically, is comfort with ambiguity and pace. A partner at a top-tier strategy firm is used to being dropped into a client organisation with high expectations, limited context, and a compressed timeline. That's not a bad description of what a technology operating partner faces when a new platform company closes and the hundred-day clock starts.

What they don't always bring, and where the assessment work gets interesting, is genuine fluency with the PE model itself: how carry works, how deal theses get constructed, how operating partners fit into the power dynamics of a fund, and what it feels like to have the GP's economics directly affected by your decisions. The best candidates have developed that fluency either through prior PE exposure or through enough self-directed learning that the gap closes quickly. The ones who haven't tend to discover it creates friction at the worst possible moment, usually when they're trying to influence a decision that sits at the intersection of investment logic and operational reality.

What Good Actually Looks Like

Background gets you to the shortlist. It doesn't tell you whether someone will actually work.

Here is what separates the technology operating partners who create genuine value from the ones who produce impressive-looking activity without moving a number.

They translate AI and technology into the language of returns. Not "we implemented a machine learning model for demand forecasting." Rather: "we reduced working capital by twelve per cent, which at this leverage ratio added approximately half a turn to EBITDA." The former is a technology update. The latter is a board conversation. The ability to make that translation, fluently and instinctively, is the single most differentiating trait I see in candidates who succeed in this role versus those who don't.

They know the difference between a bankable use case and a pilot that will never scale. This sounds obvious. In practice it's surprisingly rare. Most technology leaders, including very good ones, have a natural bias toward building and experimenting. The technology operating partner role requires a different instinct: ruthless prioritisation of the two or three interventions that can actually move the enterprise value needle within the hold period, and the discipline to say no to everything else. Beware the candidate who arrives with a long list of exciting AI use cases and wants to start all of them simultaneously. They're almost certainly the wrong hire!

They operate through influence rather than authority, and they're comfortable with that. This is where a lot of otherwise strong candidates struggle. A technology operating partner has no direct reports inside a portfolio company. They have credibility, relationships, and the implied backing of the GP. They work with the portco CEO rather than reporting to them. They influence the investment team rather than directing them. Every significant outcome they produce comes through persuading someone else to do something differently. People who are used to having direct authority over delivery tend to underestimate how different this feels in practice, and tend to find it frustrating in ways that compound quickly.

They're as comfortable in the room before the deal as after it. The international trend, confirmed by McKinsey's research showing 60 per cent operating partner involvement in diligence, is toward earlier specialist involvement. The technology operating partner who can contribute meaningfully to an investment thesis, identify the technology risks and opportunities in a target, and shape what the hundred-day plan needs to address, before the deal closes, is considerably more valuable than one who shows up post-close and starts from scratch. The diligence capability is a differentiator, and it's one worth probing carefully in any assessment process.

They understand that the limiting factor is almost never the technology. It's governance, adoption, change management, and the organisational will to actually do the hard work of reshaping rather than just deploying. The best technology operating partners I've met spend more of their time on people and organisational dynamics than on any specific technology decision. The ones who spend most of their time on the technology tend to produce pilots rather than value.

The Assessment Problem

A standard executive search process, even a rigorous one, will surface candidates with the right background and credentials. What it won't reliably surface is whether a particular candidate has the behavioural traits that determine performance in this specific role under the specific conditions PE creates.

The technology operating partner is operating under sustained time pressure, with limited authority, inside organisations that may be sceptical of them, at the intersection of two groups, investors and operators, who sometimes have different definitions of success. They need to build credibility quickly, prioritise ruthlessly, and produce a visible result within a hundred days, while simultaneously building the longer-term capability that will compound across the hold period.

The behavioural questions that actually predict performance in those conditions are not the ones a panel interview tends to ask. Does this person update their approach when the environment changes, or do they persist with the original thesis when the evidence has moved? Do they genuinely take on board feedback from a portco CEO who pushes back on their recommendations, or do they listen politely and proceed as planned? Do they draw energy from ambiguity and complexity, or do they manage it at considerable cost? Can they regulate their behaviour effectively under the sustained pressure of a hold period, or does their performance degrade in ways that create friction further up the chain?

These are not questions a single interview answers. They require a structured assessment approach that tests for these dimensions specifically, multiple times, in ways that don't allow a strong communicator to substitute presentation skill for the underlying capability. That assessment exists. Most hiring processes in the Australian PE market are not currently running testing. If i'm being honest, hiring decisions in PE firms has traditionally been more gut feel than data and insight driven.

How to Know If the Hire Is Working

Given the six months of integration coaching I run with appointed leaders, I have a reasonably clear view of what signals matter in the early period, and what signals are misleading.

The misleading signals first. Activity is not a signal. A new technology operating partner who is in constant motion, running workshops, building relationships, attending every relevant meeting, producing strategy documents, can be very busy while producing very little of consequence. Busyness is easy to generate in a new role. Impact takes longer and is harder to fake.

Stakeholder warmth is also not a reliable early signal. Portfolio company leaders who like their new technology operating partner and find them engaging are not necessarily working with someone who will move their enterprise value. Some of the strongest technology operating partners I've worked with created initial friction, because they were identifying and naming problems that were uncomfortable to acknowledge. Some of the most warmly received were producing comfort rather than value.

The signals that actually matter at the six-month mark are narrower and more specific. Has this person identified the two or three highest-value technology and AI interventions across the portfolio, and are those being resourced and executed? Have they contributed meaningfully to at least one investment decision, either in diligence or in shaping a post-close thesis? Is there a visible and measurable early result, even a small one, that demonstrates the ability to move from insight to implementation? And critically: are the GP partners actively seeking this person's input on technology and AI decisions, or are they still treating them as a resource to be deployed rather than a partner to be consulted?

The last one is the most telling. A technology operating partner who has genuinely earned their seat at the table inside the first six months will be pulled into conversations rather than having to push their way in. When that's happening, the hire is working. When it's not, the question is usually not whether the person is capable, but whether the role was designed with enough clarity and enough mandate for any capable person to succeed in it.

Final thought

Private equity in Australia is still in the early stages of working out what good technology leadership actually looks like at the fund level. The international evidence is clear that it creates real value when it's done well. Most firms haven't yet done it well.

The Technology Operating Partner is the hire that connects investment logic to operational execution across a portfolio. Private equity doesn't need more AI enthusiasm. It needs leaders who can turn AI into accountable value creation. Getting that hire right, and then properly supporting the person through the integration period that determines whether the appointment creates or erodes value, is the work. Everything else is context.

Charles Baker is the founder of Vantyr Group. He's spent 20 years placing senior technology leaders across PE-backed and high-growth businesses, and now works with firms from the first search conversation through to six months post-appointment. If you're working through a technology operating partner hire, a portfolio tech role or trying to define what these roles should look like please comment.