This forum appears to have a pretty knowledgeable following with regard to REPE. Something I'd like to know is how the hierarchy shakes out for REPE companies in terms of prestige. Which companies are considered top tier? Who is in the middle of the pack? Who is "bottom of the barrel?" Are there any REPE companies you would never want to work for?
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I will stick to noting the firms that I would consider to have the strongest reputations in the industry, in no particular order.
Blackstone - Largest fundraiser. Reputation for doing large and complex deals. Generally considered to be one of the top payers at the associate level. Hires associates from IBD.
LONE STAR - Second largest fundraiser. Reputation for tending toward debt-oriented portfolio deals.
STARWOOD - Strong reputation as a fund manager. Announced a $1.2BN closing for Fund IX in January. Historically has had a reputation for a tough culture and somewhat below-market comp at junior levels...though I have heard rumors this may be changing somewhat. Hires associates from IBD, and some undergraduate level hires. Believe they have split Asset Management and acquisition roles.
WALTON STREET - Another strong, respected, and long-established fund. Have not raised a new fund in a while, though. A little unusual in hiring: they like to hire at the undergraduate level into analyst positions. Those who leave seem to have great placement.
WESTBROOK - Maintains a relatively low profile for one of the largest opportunity fund managers, but has a top reputation within the industry. I read they had raised $1.5BN of capital through March for their next fund. Rumored to have a pretty good culture. Hires associates from IBD.
TPG - Multistrategy megafund platform that is known to be building up its real estate presence. Made some notable senior level hires in recent years.
Angelo Gordon - Manager with a mix of hedge fund and PE strategies with a strong real estate flavor. Seems to be one of the only major sponsors I know of that prefers to hire post-MBA.
BAUPOST - Absolute return, value-investing hedge fund (run by the legendary Seth Klarman, author of Margin of Safety). In addition to public-market investing, they buy a lot of real estate. Farallon was another major hedge fund that behaved similarly, though Farallon seems unsure of whether it will stay in the RE business.
CARLYLE - Closed a ~$2BN US fund recently. Their last US fund was relatively successful. This is another firm that bifurcates its acquisitions and asset management roles. Acq associates are generally ex-IB analysts. Appear to have a pretty good record of promoting internally.
Here are some other notable firms (for which I have run out of steam to write notes): Northwood, Rockpoint, Rockwood, Oaktree, Beacon, AREA, and Apollo. DRA is a great value-add firm (and is somewhat smaller than those listed here). I hear a lot lately about Madison International, too, which is also a smaller firm that focuses on (and has a great reputation in) partnership interest-type acquisitions.
I have certainly missed many firms others would include, perhaps a few intentionally but the majority probably due to oversight or mistake.
Disagree. After the Cal-West Ind Port fiasco, I would say those guys are finance clowns pretending to invest in RE like they know what they're doing (a lot of REPE guys are). That deal was a combination of hubris and stupidity.
Why do you think they haven't been raising funds as aggressivley as their competition? Food for thought...
Where does BlackRock fit in?
They would be an "institutional investor". Def not REPE.
Good overview so far, I'd like to add (definitely worth working for):
Fortress Investment GROUP - Have done some great RE debt deals during the crisis, acquiring mezz or senior debt to gain control of properties at attractive basis. Were hiring junior guys (1-2 years RE/IBD experience) last year. A top firm in my opinion and deserves a place on the list above.
To elaborate on some of the previously mentioned names (and other note worthy ones):
NORTHWOOD - Founded by senior ex-Blackstone real estate guys.
MADISON INTERNATIONAL - I like their niche strategy (non-controlling real estate interests). Very few traditional competitors. Very value oriented. Small team, but have made a few hires recently in London on acquisitions and NYC on fundraising.
KKR - Have an real estate team now (headed by an ex-Whitehall guy), but to my understanding has not raised a dedicated RE fund. Not proven yet, but should be interesting to see how they fare.
COLONY CAPITAL - Were a big player pre-Lehman. Used to hire from IBD. Thoughts?
Angelo Gordon - I thought they used to have a Wharton Undergrad bias (a few years ago), but I suppose that isn't mutual exclusive with liking to hire MBAs now. Top team. RIP Keith Barket.
EQUITY INTERNATIONAL - Noteworthy for their strong Emerging Markets (esp. Latin American) focus.
Colony and TA Associates are similar - they're a mixed bag of RE and finance (IB) professionals. Rockwood is similar.
Colony has been an active seller lately.
RE Capital Markets--Harsh! Agree the CalWest Fiasco (capital F) has been a big black eye on the firm, and I've heard rumors as well that it has impacted fundraising. Having said that, the Walton guys I know have seemed pretty sharp to me, I think the firm is reasonably well respected, and I do know that their analyst/associates place well, so I think they at least deserve honorable mention (with reservations). Your negative observations warrant note, though.
Agree on the add of Fortress, KKR, and TA (though I think I would put TA a tier below some of the others that have been discussed here). I did not include Colony based on what I've heard about working there...
To the list I would also add KSL (resort- and recreation-oriented PE).
are there any good MM REPE firms?
any thoughts on sentinel? Multi-family repe
How promising is a career in REPE? Let's say you land an associate position. What skills do you gain after 2-5 years? Is there potential to start your own business?
Sentinel have done some good deals in the past. I'm not up to date on what they're doing now. Very focused on their asset class though and wouldn't be in the league of the other firms mentioned in this thread (profile wise).
Being in REPE acquisitions is great if you want a career in real estate. Not so much outside of the sector (you'll always be seen as an RE guy). To start your own real estate business (development or Asset Management) you need to be able to convince institutions or people with a lot of capital to support you on a deal or two. This isn't a skill you'll pick up in REPE necessarily (the money gathering part), but you'll be well positioned to do deals if you had access to capital.
what role might be better suited for starting your own real estate business? actual hands on development/asset management? Curious what types of roles/experiences are best suited to convincing others to back you on your own deals
Well... acquisitions in REPE will teach you how to put deals together, finance them and put together a business plan for asset management, but it won't give you access to investors until you are very senior (if that). It is probably the best point to develop your career (or joining a top RE firm like Tishman, etc... / whomever is the top firm in the city you're interested in).
Investment Brokerage with a top group could give you a good rolodex, but won't give you the asset management experience and finance knowledge. If you become a top broker (big "if") you should be able to convince people to back you on deals smaller than what you've been doing, but you'll have to be able put together a team to do the management. Investment Banking is similar, but you get more investor contact and less asset level contact.
You need to be able to bridge both aspects: doing the deal work/asset management and being able to raise the money to do the deals (debt & equity). Its a long haul unless you have a relationship with real money/equity.
Of the guys that I know who have set up their own RE business their backgrounds were (some have failed, others are still slogging along):
I know a few successful RE guys who have come out of brokerage. One of the better RE guys i know, used to be a senior guy at an RE firm (20+ years experience) and spent 2-3 years and $2-3 million working out of his lawyers offices with this team to try to do his first deal. He finally closed and now has his own business.
Any more info on Madison International or Walton Street regarding competitiveness, compensation, and prestige? Would they be viewed favorably out of undergrad? My friend said they both hire directly at his school for undergraduate full time.
Both seem to compensate competitively with investment banking. Walton is better known and much larger in the industry (and among recruiters), so despite the Cal West fumble in their Fund V (mentioned above), I would say their prestige (particularly with respect to exit opportunity implications) is higher. Madison, it seems, is growing and making a great name for itself. The investment style is a little niche-y but interesting and seemingly successful.
Few REITs do any development. Public markets have difficulty valuing a development pipeline, so it generally makes more sense for REITs to invest in stabilized, income-generating property (which is what they are designed to do). I've never worked at a REIT, but I worked with them while I was a banker. I sense that the experience at a REIT is quite different from REPE.
Depends. Prologis is a good example of a REIT that does development. There also a number of REITs that do forward transactions.
Generally speaking, yes, REITs focus on deals that are more on the core end of the spectrum.
If you want to be a developer, join a development firm, not a REPE or a REIT. Development modeling, skill sets and knowledge are all unique, I wouldn't say the typical REPE/REIT acq exp will cut it for pure development.
Thank you both, very helpful!
Nice bump to see if anyone has any revisions / additions. Also, thoughts on Contrarian Capital?
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