PE vs REPE Pay (at a Megafund)
Does anyone know if Real Estate PE pays the same as Corporate PE at a Megafund?
I know that the real estate fund sizes are typically smaller compared to Corporate PE, but there's also less people within the real estate arm.
Let's take Bain Capital for example -- according to their website, they have around 36 investment professionals for their real estate team (including analysts/associates).
Bain Capital's latest U.S. real estate fund size was 3bn, while they raised 11.8bn for their flagship North American fund. I'm not sure how many people work under Bain's flagship Corp PE fund to compare, so does anyone know the economics / pay for Corp PE vs REPE?
Similar at early levels differs later due to carry in conjunction with funds size and target returns. (Generally higher risk for Corp. PE)
Generally Corp PE has higher returns / fund sizes, right? So I'm guessing the pay is higher at the senior level (if the headcount is similar)?
If the headcount is similar that would make sense. But, there's often fewer seats in Real Estate PE, so the average senior at a top MF between Corp and RE will likely be pulling in very similar comp (assuming that fund sizes are ~proportionally smaller). Agree with the above that this is highly variable depending on the fund, actual performance, etc.
Correct it's rare to find core/core + vehicles in Corporate PE. It's a multivariate equation where you consider the fund size and returns over the explicit hurdle for that particular vehicle.The point the kid noted below is neither here nor there. Yes it is true it is easier to deploy capital into real estate and some large MFs have raised large funds but this should not be used as a guiding stick unless you are confident you will end up there… A counter would be that BXs previous corporate PE fund raised $26B and their upcoming vintage of BCP will likely eclipse the current vintage of BREP.The percentage of corporate pe capital raised that is targeting 15%+ returns is higher than in real estate.Focus on what you like both have money you won't get to the carry unless you like it.
This is a bit of a misconception. The more important metrics are returns relative to expectations and then capital managed per head.
Corporate PE returns are higher but expectations from investors are also higher. If you get a 20% IRR on a buyout, you’ll do okay but that’s what was expected. If you get a 20% IRR on a real estate transaction, you’re going to get a fat promote check.
For fund sizes, corporate PE fund sizes are usually bigger (sans the BX $30B RE fund that they just raised) but they’ll also have more people managing the money, which dilutes the economics.
Generally speaking, corporate PE comp should be higher but there are always going to be exceptions.
is that specific to MF REPE vs MF Corp?
Ignore title. Yes, comp is similar at MF level. Often higher floor and more stability for Real Estate PE but Corp PE could reach a bit higher highs. Either way, no meaningful differences at junior level or senior level. If you pursue what you are genuinely interested in, your paycheck will be the least of your concerns, and getting a seat in either is an feat in and of itself.
Thank you!
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