The private markets industry is bifurcating. General Partners (GPs) must either scale massively with broad distribution to sell multiple products, or focus on a highly differentiated, unique strategy. The middle ground—being a mid-sized, undifferentiated firm—is becoming the most difficult position to defend.

Instead of building a platform team of specialists, Eclipse operates like a small special forces unit. A lean team of senior partners, all ex-operators, handles everything from thesis creation to scaling companies. This ensures founders get direct support from proven builders, not junior staff.

Capital has become commoditized with thousands of PE firms competing. The old model of buying low and selling high with minor tweaks no longer works. True value creation has shifted to hands-on operational improvements that drive long-term growth, a skill many investors lack.

Applying Little's Law from manufacturing, PE-backed companies with too many projects in process produce fewer results. Lower-middle-market companies often suffer from 'too many plans.' A key PE role is to enforce focus by killing low-value projects and aligning the entire company around a single, achievable 90-day goal.

The number of operating partners in PE has tripled, but this can be counterproductive. Flooding a portfolio company with functional experts often leads to uncoordinated efforts and confuses management teams. The most effective approach is often more targeted, with a principle that sometimes the best action is no action at all.

The private equity market is following the hedge fund industry's maturation curve. Just as hedge funds saw a consolidation around large platforms and niche specialists, a "shakeout" is coming for undifferentiated, mid-market private equity firms that lack a unique edge or sufficient scale.

To maximize value creation, young private equity firm Teopo Capital made a strategic decision to hire a full-time operating partner dedicated to portfolio companies before building out a fundraising team. This signals a deep commitment to hands-on operational improvement as their core strategy.

The era of generating returns through leverage and multiple expansion is over. Future success in PE will come from driving revenue growth, entering at lower multiples, and adding operational expertise, particularly in the fragmented middle market where these opportunities are more prevalent.

The modern era of PE ops is defined by a move away from generalist ex-consultants. Firms now hire deep functional specialists focused on areas like finance or go-to-market. In Chicago alone, the number of finance-specific ops roles exploded from roughly 15 to over 60 in just a few years.