Private Equity RE - Long time lurker, first time poster - 30bn AuM
Hello fellow monkeys-
I've been lurking around the forums for quite some time now. I must admit, I was a little disappointed to see there is no Real Estate specific forum- and I really think that should change. I'd be happy to help moderate or contribute in any way. I recently entered the institutional space, coming from a real estate asset level / private background and an "outside the box" type of pedigree compared to what you would typically find at your average shop on the Street.
I work for an investment manager that has over 30 billion under management in PE, RE, debt and infrastructure. I am on the real estate sourcing/deal making side and I focus on direct equity, secondary and pref. equity / mezzanine transactions, typically in the 10 - 30m range per check but with the ability to go far higher.
I am located in the NYC area and focus on US deals however, as a secondary market I am spending some time in Europe with a lot of interesting deal flow coming to the market recently.
I commend this website, I think it's the best around for really getting an inside track as to what is going on out there...with the exception of the countless trolls I see, but I guess that just can't be avoided... happy to be a part of the community!
Best,
B
What kind(s) of strategy does your firm employ? Is it more heavily opportunistic? Value-added?
What kind of background do you have?
Thanks! Interested to see how this thread turns out.
Hi Rana,
We are very creative up and down the capital stack. For direct equity, typical JV 90/10 structures or preferred equity / mezzanine we look to partner with highly skilled operators who have dealt with other institutions or allocators in the past. Our strategy is typically "value-added" or "opportunistic" and right now frankly we are more attracted to tier-2 cities as oppose to the gateway markets which we feel are getting inflated due to overbidding on core assets and an artificially low interest rate environment. We also have a secondary fund set up to buy out existing LP interests in funds and assets as well...this is a huge marketplace with only a handful of institutional players on the RE side, as oppose to PE where the market is much more matured.
My background is asset level acquisitions and sourcing, on the buy side and investment sales and leasing brokerage, as well as capital raising but historically I've done smaller deals, raising capital on a deal-by-deal basis, on behalf of high net worth smaller fish... I am new to the institutional fund side. I am the sourcing / business development "hustler" type who cracked into the PE. The fund vehicles and secondary modeling / analysis is where I am my infancy stage and excited to learn more and do deals.
Best, B
Interested as well.
Sent a PM, but might as well post here too for everyone to see...
What are your hours like? How long have you been in the industry? Any general thoughts on how interesting the asset class is?
Hours are 8am - 8pm sometimes more sometimes less, it really depends on your work load, how efficient you are, what team you are on...it all depends, I could get a phone call from a seller notifying me that a competitor came in and is submitting a bid tomorrow and all of a sudden priorities change and it's going to be a late night. When it comes down to it, you are either valuable and producing and a team player or you are not... I am very happy with respect to the entrepreneurial freedom I have in my role (sourcing/biz development) as well as the deal experience I am getting.
I have been in PE real estate for only 3 months...I finally broke through. commercial real estate, in general, I've been employed on both the principal acquisition and brokerage side since I was 21, consistently from age 21 until 27 ... so 6+ years. I took the "experience route" and graduated college with a deal sheet attached to my resume
In somewhat a similar route and would love to get your advice. Currently in my early 20s, some CRE experience and now with an institutional / REIB group; but looking sometime in the future to move toward a buy-side REPE role. Curious how you came upon the role. I've noticed that having experience working with the client / firm is sometimes a great way to open doors. Also, considering heading back to school, perhaps a Masters in RE?
I'm verry happy that someone decided to make a Q/A on RE. Thank you very much, already one SB for you.
Why did you take the REPE route instead of "classic" PE ? Do you think it is possible to break into REPE with just a Master in RE ? How the pay compare to 'classic" PE ?
I think the pay is fairly similar if not the same to classic PE and it really depends on the shop regarding comp structure. I've been reading a lot about salary increases and bonus decreases... other firms may be doing the opposite. Obviously if you can negotiate carry that would be ideal but I don't think there are many entry level analyst/associates that are doing that these days... I am not an expert in this dept. though as I am new myself...
I would say that the pay varies greatly in REPE, much more so than in PE. At the larger opportunistic REPE funds pay will typically be be more in line with corporate PE, but as you move into smaller shops or into value-add funds it's all over the map.
Yep - I'll go one step further and say that it not only varies greatly, but in general is much lower than corporate PE. Exception to this is the large opportunistic funds as RE_Banker said.
Not to hijack the thread - but it seems like someone should mention that hiring in REPE (and RE in general) is still a fraction of what it was pre-2009. Obviously finance overall is more competitive these days, but RE was among the most devastated - and hiring hasn't come back despite the uptick in asset valuations.
I've been in REPE for 5+ years now at a better known firm, and we've hired very few analysts/associates over the last several years. Networking and experience are still key to break in, but just want to make sure no one had any illusions about prospects.
Also agreeing with the suggestion that RE should be its own forum section. It really is a completely different animal.
Question for you.
I just started as an associate in the asset management group of a large REPE institution--think BX or similar. I'm still learning exactly what my responsibilities will be. A lot of our legacy investments are under water so a lot of work is being done on recaps, dispositions, etc. Our group also has to make approval for any decisions made by our JV partners (most of our investments involve partnering with a JV partner that earns a promote). And then our more tedious activities include creating business plans / approving budgets at the end of the year, reviewing appraisals, etc.
My question is this. How much does being in this group pigeonhole me into being in asset management for the rest of my career? Do responsibilities become more fluid as you move up the chain--e.g. getting involved in acquisitions? Would it be possible perhaps to move into an acquisitions role, if not at my current company than at a different one?
Also, what can I do to really set myself apart from my peers?
I would say that the more junior you are, the easier it is to switch. As you move up the chain the acquisition teams are led by deal originators and if you've spent a long time in AM then you really don't have the practice to source acquisitions.
I don't think you are at a big disadvantage being on the asset management side right now... that said, I think it's imperative that you still build as many relationships as you can with the JV partners, other AM's, whoever you are in contact with...make it a point to personally network. I think every company is different but if you prove yourself in asset management and are an obvious value to the company then I don't see why transitioning into acquisitions or the deal team would be such an issue...especially if you naturally progress into the position yourself, while still handling all of your responsibilities.
I would be interested in speaking to you about the recaps, dispositions and any potential JV opportunities. We have a large secondaries fund and direct equity fund. Please private message me.
Thanks
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