Advice on unique situation: stay in RE or accept role to IB
Hey all - was hoping someone could provide some advice into my unique situation. After graduating from college, I worked in coverage IB in a 2nd tier city for a year or so but then had to take some time off to deal with some pressing family issues. Had an employment gap of ~1 year (although I was certainly not just laying at home doing nothing) but rejoined finance through a real estate private equity firm in the Midwest. I've enjoyed the work. Learning about things like yield, loan docs, the correlation between the macro picture and RE transactions has been very enjoyable. That being said, I am concerned about whether 1) I actually like RE long-term or just finance - I don't like being in a field where so much depends on the macro picture, your basis, and the actual building/property, 2) outlook of the field - seems very cyclical and the fact that employment picture has been so rough for mid-level folks makes me worried about the future.
That being said, I think there's a lot of mobility at my current firm to move up and the offer to return to banking would have me start as a first year analyst (which is understandable given the gap) - I'm 24/25 and feel as if I can't just keep doing analyst roles. End of the day, if I'm unsure of RE long-term, would it be worth it to take a step back and do banking to open myself up to a broader array of roles.
Thanks so much!
I'd stick with real estate at your current role given the job environment for now. It's always easier to recruit for the next job while still employed rather than the inverse. If your firm is well capitalized and they haven't made cuts yet I wouldn't be too worried, general consensus is that the RE employment cycle is near the bottom right now, expect it to pick back up over the next year and a half. Transaction activity on the debt side is ramping up with all the extend-and-pretend loans finally coming due from the past couple of years.
I think you need to figure out long term what your goal is. If you want to be a career investment banker (or private equity) then work on lateralling out from your current gig while still collecting a W2. It would be unlikely that would be able to recruit in as an associate right now, so you would have to eat coming in as an analyst. Whatever you decide you're going to have more success landing a new role through your network, especially if your undergrad wasn't a target school.
Most people I know do IB for optionality "the exit opps" - not necessarily because they envision that for their career. You need to figure out what career you want first, and then adjust your job accordingly if that makes sense.
Just wondering how did you get the offer for the ib role?
Networked, in a smaller tier-2 city so a bit easier. Also had relevant experience and made sure to study technicals. Think a lot of banks are ramping up hiring so there should be IB opportunities for those who are looking to lateral - know of a few people recently who actually made the jump from REPE.
Doesn’t every (principal investing) field in finance depend on the macro picture, basis, and/or asset/property at hand?? And if you’re referring to advisory, the business is just as affected during downturns. Regardless, I would look ahead 10 years and think deeply about where you want to be. If it’s not in real estate, then the earlier you get out the better. Have to be willing to play the long game in this industry. High cash comp doesn’t always come as early as it does in IB or traditional PE, if ever.
I’d figure out what you want to do and what you fs wouldn’t want to do. This is going to be the thing you’ll be doing for decades so pick what will be enjoyable. Both will pay “enough.” If you wanted to do IB > PE then you’ll fs make more staying in IB but that’s not guaranteed, is super competitive, and comp prob won’t be too special in a non tier 1 market. You could push for a MF RE role of you think you have the pedigree and experience and make close to the same cash comp. My opinion is if you don’t ever plan to do your own deals, then just do IB and try to get into PE. RE is fun because you feel close to what you’re doing but if you never get to buy your own stuff or want to them I think your odds of making a ton are higher working for a corp pe fund. I’m not a senior professional and this is just my personal opinion. I was thinking of leaving RE because of how little money I was making until I got a new job and doubled my comp and can see a trajectory closer to corp pe. Just gotta play your cards right. You can get high cash comp 250-300k or more for assoc 1 roles (just gotta know the firms and Head Hunters)
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