LifeCo Questions
Could someone please shed some light on the typical interview questions specific to LifeCo’s (the likes of CPPIB, Ivanhoe, CIC, ADIA etc)
What sort of modelling test could you expect to see? I’m assuming it wouldn’t be your typical PE style case study because of the long term value investing approach that LifeCo’s take. Particularly if the role is a blend between acquisitions and management.
Would appreciate all your insights!
Feel free to DM me if you have had experiences interviewing at a LifeCo.
Interview questions are going to be the same to PE type and modeling test will be as well. While many Life Co.’s hold assets for long periods of time, they also have funds that have 10 year ‘Life’s’ and therefore buy properties, add value, and sell. Just like what you think of as traditional PE. It’s all the same thought process whether you hold forever or sell have adding value.
I don’t understand why some LifeCo’s preach being a long-term value investor focussing on a core risk profile. If you’re holding an asset that has development potential and you choose to fund the development for the GP to execute, aren’t you fundamentally taking development risk / leasing risk and therefore consider yourself a value-add / opportunistic investor - can you explain the rationale here?
The majority of a life co portfolio is core and core plus. But they still need yield and have a balanced portfolio to generate that yield. Generally, if they develop an asset or do a value add deal with their General Account funds (insurance company money not fund money) many of the Life CO’s will buy out their JV partner after the value creation period once the asset is stabilized and will hold for long term.
Also, why can’t you be a both a long term value investor focused on the core risk profile deals while also doing deals that are value add and opportunistic? When you have billions of dollars to deploy, you have enough funds to do everything under the sun. Many Life Companies do just this and have buckets of money for every risk profile. The goal is to create a portfolio which generates strong risk adjusted returns.
from the fund perspective, look at a fund like Blackstone. They have their traditional opportunistic platform, but they also have a core platform that does core and core plus deals and senior lending…all lower risk stuff. Just because you think of a platform as core or opportunistic doesn’t mean that’s all it does.
Bump
As mentioned above, Life Cos often use balance sheet funds (insurance money) to fund deals. They are often long term holds because they are in it for income appreciation. Investing in deals on say, 5 year holds for value appreciation wouldn’t make sense because they would just need to recycle the distributions right away anyways and have no third party investors to distribute cash to.
Wouldn’t say that is always true. The LifeCo that I am at invests in mostly opportunistic and development deals across all product types. We have very few core/core+ holdings and raise 3rd party capital for a lot of our funds.
What type of firm pgim/nuveen/metlife or NWM/NYL
I've worked at 2 different lifecos and both invest all over the risk spectrum. the largest allocation is always commercial mortgage loans because they use them to back the life product. The opportunistic and value add plays are typically through JVs or fund investments and can be balance sheet or excess capital investments. Direct ownerships were typically core deals.
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