Spotlight On: Portfolio Operations

In a new series shining a light on BC Partners’ approach to operational excellence, we’re sitting down with members of our Portfolio Operations team to find out more about their backgrounds and specialisms, emerging themes in their practice areas and how they work across BC Partners’ portfolio to deliver hands-on support and value creation.

In our first Q&A, we sit down with Lakshman Charanjiva, Head of Portfolio Operations at BC Partners. Lakshman reflects on his career journey, the evolution of the BC Portfolio Operations team, and the increasing importance of specialist expertise in areas such as artificial intelligence.

Lakshman, thank you for joining us today. Could you start by telling us more about your role at BC Partners, your leadership of the team, and experience before joining the firm?

Lakshman Charanjiva: I head up the Portfolio Operations team at BC Partners, having joined nearly seven years ago as the firm’s first specialist operating partner – focused on technology - in what had historically been a team of generalists. Prior to joining BC Partners, I spent eleven years in corporate leadership roles as global Chief Information Officer for two Fortune 200 companies, following a decade in consulting. This professional experience, alongside academic qualifications of an MBA in the US and Chartered Accountancy certification in India, brings credibility to my interactions with management teams. It also enables me to apply deep subject matter expertise, paired with an established commercial mindset, to BC Partners’ work with our portfolio, connecting directly with senior leadership to create value from day one.

What are your key areas of focus for the Portfolio Operations team? How do portfolio companies engage specialists within the team?

Lakshman Charanjiva: Across the team, we currently have a specialist focus in several key areas: top line growth, procurement and supply chain, technology and cyber, AI and digital, finance function effectiveness, and sustainability. At BC Partners, one of our principal levers for building better businesses is providing expertise and insight at sponsor-level to help our businesses perform. We connect our portfolio companies with our dedicated experts to unlock growth opportunities and cost efficiencies as part of our overall aim of building better businesses.

To best focus our operating advice and hands-on support, each specialist within the team works with their wider ecosystem of validated and best-in-class external partners, who support us with outside-in perspective and additional capacity to best address needs and opportunities within our portfolio.

But let’s be clear - value creation is truly a team effort. When we begin working with a company, we make sure to bring together the best mix for its particular needs - combining expertise from our investment teams, sector specialists, operations team, and capital markets function - each of whom bring valuable insights, approaches and skillsets to unlock value.

Increasingly, our specialists work holistically with the investment teams across the entire lifecycle of an investment – from due diligence to exit – accelerating the identification and execution of value creation levers.

As you say, the Portfolio Operations team is now structured around specialists: Can you explain the benefits of this model, and how this works in practice across the investment lifecycle?

Lakshman Charanjiva: We’ve seen our portfolio companies increasingly seeking deeper, specialised skills in key functional areas, for example artificial intelligence, digital, or cyber capabilities where they often don’t have sophisticated internal resources or capabilities. Alternatively, they may seek to achieve greater maturity in the finance function or wish to build or develop an established procurement function. To meet this, we’ve built out our team with specialists in fields we see the most demand for, and we continue to add functional experts in order to stay ahead of long-term trends where our portfolio companies operate. Specialization also helps us to build portfolio-wide communities, creating a network effect and enabling an efficient sharing of knowledge and ideas.

Given our deeper specialisation, we are also applying and leveraging this expertise in all stages of our work. As part of our continued evolution, we place greater emphasis on working with deal teams to conduct diligence on potential investments for risks and upside potential we can unlock. For example, we are actively assessing AI-related risks and opportunities for every deal, similar to how we already evaluate cybersecurity and technology capabilities. Sustainability has also long been a standard part of every diligence process, and our new Head of Finance Function Effectiveness is now leading the development and implementation of this process, especially in bilateral deals where we are able to gain greater access earlier on.

While the team’s principal focus remains on portfolio work during the investment period, we are integrating more of these activities earlier in the deal and due diligence process to really identify and act where BC Partners is uniquely positioned to add value.

One of the benefits of this setup and engagement across the deal process is the ability to build a network for our portfolio companies, providing them with expertise, capacity and connection to dedicated specialists for every business challenge and opportunity to really drive performance.

And what are some examples of how the team have supported BC Partners’ portfolio companies in value creation?

Lakshman Charanjiva: Our portfolio team has played an important role in delivering on BC Partners’ overarching aim of building better businesses. Our specialists are flexible and can engage with a portfolio company on a very specific challenge, e.g. greenhouse gas emissions, or much broader, longer-term projects that require input from several functional experts.

As a recent example, for one of our healthcare investments, our portfolio operations specialists have been invaluable, assisting with pricing, go-to-market strategies, organisational design, cyber security, and procurement, leveraging our functional knowledge and sector expertise to unlock very specific opportunities and value.

In other cases, we’ve brought in the full suite of our specialists in a single deal from diligence to exit, demonstrating the benefits we can offer as a partner and active owner-operator. For example, in one process we contributed to both commercial and technology diligence, and followed it up with procurement and M&A support during our ownership period, before helping the business best prepare for exit.

In a more recent, targeted example, our Head of Portfolio Finance Effectiveness is supporting a finance transformation effort following an acquisition that should help fuel operational efficiency and in turn, growth.

Separately, our Chief Procurement Officer has recently managed a review of commercial and cyber insurance for a portfolio company, involving a full review of their brokers and carriers and achieving a highly favourable outcome which will result in real value creation alongside cost savings.

These are some recent examples of our dedicated hands-on work, underlining the breadth and depth of our ability to provide specialist engagement to each of our portfolio companies as and when they need it.

You mention the power of the network. Can you tell us about BC Partners’ recent CEO/CFO conference. What experiences and learnings can you take from that event?

Lakshman Charanjiva: We’ve hosted a CEO conference for several years and view this as a really valuable opportunity to connect and network with the teams across our portfolio, linking back to the community and portfolio ecosystem I mentioned earlier. This year’s conference also included our CFO community alongside the CEOs for the first time, which was a real success. The theme, "Navigating the Shifting Sands," covered the global geopolitical environment, macroeconomic implications, technological trends, leadership issues and related themes we see impacting our businesses and providing the insight and support to best enable them to navigate and succeed in this environment.

Of course, a major thematic focus for this year was AI, where we had the Chief Strategy Officer of Microsoft speaking on the topic. Whilst there’s been no shortage of discussion on how this will transform all sectors, we were really pleased to be able to pair this industry leadership with specific skills at sponsor-level to distil it to actionable value for our portfolio.

We enjoyed panels, breakout sessions and dinners, building a community between our portfolio company executives and unlocking knowledge and insights through their interactions. Our CFOs and CEOs found the event highly valuable for learning, community building, and knowledge sharing. It’s an event that I believe delivers great returns and real value for our portfolio companies.

To conclude, and with an eye on the future, what do you view as the main trends driving how BC Partners will approach value creation in the next 5 – 10 years?

Lakshman Charanjiva: It’s an exciting time for portfolio value creation teams. As mentioned, we’ve seen a pronounced shift in recent years towards more granular, specialist support, reflecting the changing demands of our portfolio companies. With the private equity sector facing tougher conditions in the last three years, many firms are now rightly doubling down on value creation - prioritising EBITDA growth over multiple expansion.

While the functions we’ve identified will likely remain a focus for us in the long-term, there will naturally be more emphasis on emerging areas like AI. We’re approaching AI pragmatically given its rapid evolution and varied use cases. Given the speed of its evolution and the hype around the technology and its applications, we believe it's wiser to proceed cautiously rather than be at the bleeding edge, learning from the industry and adapting strategically.

In the context of these these trends, at BC Partners, we’re really doubling down on our core focus of ‘building better businesses’- working hand in hand with senior leadership at companies to identify their specific challenges and opportunities and providing the specialist expertise, insights and teams to address these. I believe this trend will continue in the coming years, with a growing need for portfolio value specialists at GPs. In terms of our focus, I believe working to integrate more of this specialist operational expertise into our investment thesis and deal screening is essential.

We at BC Partners are well prepared for this, and truly believe we have the team to unlock real value across our businesses.