Working in RE IB
Currently going through group placement for 2024 SA position. My bank's REGAL group is one of if not the strongest group at the bank. I have spoken to several people in the group and feel it is a great culture fit. However, I can't help but feel hesitant about joining the group because I really have no interest in RE. (Group is supermajority RE with 1-2 strong MDs that cover Gaming) Not looking to start an argument in the comments (though I welcome people that disagree) but I just feel that the REPE and REITs are directly contributing to the terrible homelessness problem in our country and the majority of exits from this group are to REPE. If I joined the REGAL group would I close doors into traditional PE?
Dude, do not go into RE IB or REPE if you don't like real estate. It really is it's own little world and pretty disparate from Corp Fin LBO type of PE especially on the REPE side.
In IB it'll be similar to other Corp Fin groups but the buy-side opps are mostly asset-level real estate PE shops. Which is to say for someone not interested in RE, the best case scenario exit opp for you isn't a great fit.
RE deals can also be unique in that M&A is very light. Most deals are cap raise so if you want to do LBO type of PE it's not very transferable at all.
Is it still possible to switch from a REGAL at a BB to a MM/UMM Corp. PE Fund?
I may be a little bit biased but real estate IB is fucking awesome. You can go into so many verticals with it. Majority of the mandates are asset heavy so you get to work on many M&A deals. Privatizations of REITS are an interesting concept that you get to work on (kinda like a Buy-Side m&A mandate and mixture of an LBO). You can go into brokerage where you work majority on assets, or the REIT team where it’s the capital markets advisory side. You can exit to REPE or simply work the corporate path at a REIT.
Exits can also be M&A in IB because the industry is so focused on asset level transactions so you can to work on a ton of deals and understand how to navigate the M&A process.
I’d reconsider real estate, it has a ton of benefits. Cons are that it’s very very cyclical.
Thanks for the insight. I'm deadset on exiting to PE (either in REPE or Corp. PE). What are your thoughts on long-term prospects/career path of REPE vs Corp PE? Also, have you seen people move from REIB to Corp. PE? Thanks so much.
Yes, it happens because the private equity process is the same just a bit more dynamic. The reason why it wouldn’t is because why wouldn’t you? People who go into real estate private equity go into it because they want to work at a value add opportunistic investment firm (Google that and what that entails) which provide more dynamic returns and experiences. There is a thread about why people don’t go into real estate (I’ll find it for you), and some guy respondedI don’t know but I cleared 7 figures last year working 50 hours a week.” This absolutely happens, people just don’t know about this because they think CRE is for dummies.
Also, the thing with corporate PE is that big firms like Blackstone still engage in REPE even at the corporate focus because they buy out massive companies with real estate assets; so essentially the real estate aspect of PE never really ends.
I know you have your skepticisms about real estate. I did, but I’m telling you, things can work out for you. The real estate career is nothing to be sneered at. I am in Canada, where 80% of the reit volume is traded by retail. In the US (assuming that’s where you’re from), 90% are traded by institutions and you have a ton more REITS. It’s a legitimate industry coverage group in the US with a ton of opportunities.
You seem like a humble guy asking the right questions and I’m happy to answer.
May I ask your view on the infrastructure vs RE?
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