Non-RE (traditional IB or PE) backgrounds do better in RE?
I heard that if you have a Non-RE (meaning coming from traditional IB or PE) background it can be more helpful when going into a PERE shop.
Modeling is easier/less complex and you have a better idea of the finance/accounting fundamentals.
People in PERE do you agree?
What have you seen among people that come from traditional IB or PE?
Do they perform better?
I also heard work load can be lighter in RE..
(Do they function at a higher caliber?)
Yes, they do much much better. Caveat: if you are at a mega fund out of undergrad working in RE.
No, they’re way behind the curve. This may have been the case 20 years ago, but today, people are sitting in investment roles directly out of school learning the nuances of various asset classes, physical characteristics of buildings, closing processes, legal negotiation tactics and relevant points, typical capital structures, and so on. Folks not from a real estate background today generally come into a firm as largely useless and struggle to catch up to their peers who began in real estate investment roles from the get go.
No….why would this be the case??
No one gives a fuck about your modeling skills past the first 2 years of your career. Those with true real estate experience will always be ahead of the curve. Maybe in the sense of prestige, those with traditional IB or pe experience are ahead, but that’s a tiny sliver of this industry.
Absolutely not. Your modeling "skill" is about the most useless thing you can bring to the table in RE. Anything you learned in IB won't matter, because your employer will teach you how they want things done. Maybe you have a small leg up - but someone with an architecture or engineering background will have a leg up in their field, too, and I'd argue a more important one. Someone who worked in local politics will have a leg up in a place you don't.
This is a finance-oriented site, so it isn't surprising, but there is a really stupid fetishization of Excel skills that people don't seem to realize don't really carry forward in a career. Most people on here are younger, and so being able to do financial modeling really quickly is the only yardstick by which they can compare themselves to their peers... but it's a skill that becomes increasingly useless with every day that passes, because in most every industry, the people at the top of the pyramid are the ones who bring in business and drive projects forward, and running endless variations of a DCF model or what have you is most certainly not what helps that.
To the extent there is any truth in this (and I am dubious to accept it as that broadly true tbh), I think it all stems from "selection bias"..
Meaning, that the recruiting practices of "top tier" IB and PE shops "selects" very hard not just for "smart" but also "hardo" and that last one matters more with workloads that exceed 80+ hrs a week often. So, the people willing to do that work are extreme in their own right, I think that may explain anything overserved in this reality (trust me, it ain't the "modeling"). Also, consistently working 80+ hrs in a high pressure environment does give the advantage of "double" time experience, like literally one year in IB/PE can be like 2 yrs in a normal place. And I think we all get that more experience leads to better skills/performance.
I can think of similar analogies to the performance of people who served in elite military units or went to a military academy (also known to be "high performers" when entering business fields)..... strong upfront selection bias, demanding workloads, and thus "high performance" later on. In this example, nobody argues direct skill transfer (like "modeling" skills), and the trade off is clearer. My personal view is something like this is at play with the "prestige" firms that can hire as they do and then work people like they do!
100% - tons of people in RE with a state school bachelor degree "doing well" for themselves. You nailed it on the head with your reasoning to OP's question.
I understand the point your making, but it's also worth noting that spending 50 hours tweaking the color scheme and logo layouts on a pitch deck, and running the same model 18 different times with minor changes in each one, isn't actually a learning experience at all. IB is notorious for the fact that you don't actually do anything valuable or useful as an analyst - hence, "monkey".
I think spending one hour at a requisition meeting would teach you more than an entire day of turning comments to a pitch deck in IB.
Just to be clear, I'm not really suggesting the day to day of analyst life at a bulge bracket IB is all that special or powerful from a content/learning perspective (I agree, it's boring/rote as fuck... which is why people want to leave that world as fast as they can so often). My point is about the pressures of the work environment, the ability/need to be hyper focused on details (like fonts and layouts) while operating on tight deadlines with massive pressure from seniors who probably give zero fucks about your own career development. That 'pressure cooker' style environment can totally bring out skills and mental fortitudes that carry over into all sorts of fields including CRE.
I'm sorta saying.... (without "going there"). All those jobs where new/young people are more coddled with focus on WLB from day one (like Big 4, holy heck what a friend of mine who is now partner at one of those told me about what they do for new associates....).... they don't really prepare for the same pressures to stand firm in a tough negotiations, or bring about the hyper focus on detail on the assumptions/inputs/formulas of a model, or just the need for everything to be perfect/polished the first time.
So, those who came up in such pressured envions... "MAY" have an advantage over those who were allowed to 'slack' by relative comparison. The actual tasks are irrelevant (like why the military or even competition sports have similar notes), the process of "drilling" and not accepting anything but the best is what counts. So, to the extent this is beat into a person at a bulge bracket or whatever, it carries such benefits IMHO.
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