Pure AM vs. Pure Acquisitions vs. A little of both
The consensus is that acquisitions, from a pay and exit op standpoint, is superior to asset management.
Ceteris paribus, wouldn't the best be a little of both (more eat what you kill style)? What do you think would be a good mix?
70% AM / 30% acquisitions sounds about right to me.
It seems most people exit to the VP/principal level at large (5B+) funds where they have the eat what you kill style shop rather than 100% splitting acquisitions and asset management. Would the exit ops be superior and more diverse with experience on both sides? Can you really get a top acquisitions gig without proving yourself on the AM side at some point?





From a fundamental standpoint
From a fundamental standpoint it should be necessary to understand the firm's strategy and implementation (though AM) in order to be successful in Acquisitions. To me, it seems that just because a deal may look good (pricing wise) does not mean it will work out. You need to be able to understand how that deal will be followed through over the life of the hold and whether it fits with the fund's/firm's objectives. At the the same time I think if you are a good fit and have the right skills you can land a good gig at a top shop.
Can you explain what you mean
Can you explain what you mean by an "eat what you kill" style shop? That sounds like fun to me, but all I have ever found on the buyside is that it feels very institutional and boring all of the time.
And yes, many people at the top of acquisitions teams at the institutions are former acquisitions only people or even former investment bankers/brokers. Most funds will have it integrated enough so that the acquisitions team needs sign off and approval from the AM side, so you learn to know what they will be agreeable to. Acquisitions people are deal guys, not asset management. It is a very different mindset and there needs to be a little bit of a chinese wall in my mind, especially if the AM team is using discretionary money.
Also, you get them to sign off on all of the leasing, inflation, accounting and tenants assumptions.
Eat what you kill is
Eat what you kill is sourcing, underwriting, and asset managing assets.
I am currently on a pure acqusitions team but it seems most of the institutional people I talk to do both.
I have never delt with on-site asset managers, leasing brokers, tenants, capex and reserves, or actually implementing the value-add proposition of a deal. At some point, if you want to run your own shop these skills seem vital.
Also, when you talk to someone about a deal, it seems hard to explain that you foresaw this huge tenant lease-up scenario...but you never actually saw that one through, and have never personally actually seen any of your scenarios through.
sk8247365: Eat what you kill
Eat what you kill is sourcing, underwriting, and asset managing assets.
I got what you meant. There was confusion because people use that term to mean performance-based pay. Which, by the way, I have in fact seen in acquisitions (I have a couple friends who either worked in or looked at commish-only acquisition positions. no deal close, no pay. Those would not be at very prestigious firms, though).
Anyway, to your question ... maybe that's what you see with the institutional guys, but I've definitely seen the acquisitions/asset manager pattern a lot at small firms. Because you look around the table and you gotta ask, "Who ELSE is gonna be the asset manager on this deal?"
Similar pattern at small debt shops. Source, underwrite, and then continue to 'manage' the loan long after it's closed. Very common.
And your question about needing AM experience to get a top acquisitions job. I'd say hell no. No offense to asset management guys, because I know some very smart, very experienced guys in AM, but I've seen guys get a top acquisitions position without EVER working in AM. Should it be that way? I don't know, probably not, but you can't really argue with reality.
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