MF Corp PE vs. MF Real Estate Comp Ceiling
For some context, I am incoming FT working in RE at a MF (KKR/BX/APO). Of course, things will vary on a fund-by-find basis, but in general, will a partner in RE at a MF be making as much all-in as their corporate counterpart?
In general, I find real estate to be more interesting than corp, hence my decision to turn down corp roles for FT, but I am curious strictly from a comp standpoint what it looks like at the top. I know it is the same at the junior levels, but I’m planning to stay in this for the long game. My logic is that there is less dilution in RE due to smaller headcount and lower hurdles to clear, so things like carry economics even out the smaller fund sizes (BX is an outlier here because they raised the largest ever private fund thru their latest RE raise). I also am considering the culling that occurs as you move up in the buyside, I am not sure if it’s more difficult to get promoted in one of the strategies.
Very grateful and happy about my gig, as I know I have a lucky seat, but looking for thoughts and would appreciate any input!
Ah, the age-old question of compensation in corporate private equity versus real estate private equity at a mega fund. It's a bit like comparing apples to oranges, but let's give it a shot.
At the partner level, the compensation can be quite substantial in both fields, often reaching into the millions. The exact amount, however, can depend on a variety of factors. These include the performance of the funds you oversee, the size of the funds, and how many partners and other employees are splitting the carried interest pool.
In real estate private equity, there are some factors that could potentially work against you. For instance, there are fewer "mega" funds in the space, and real estate as an asset class must, in theory, return less than general private equity. However, if you're one of a handful of partners at a small but growing firm, you could make the same as the dozens of partners at a large firm.
As for the promotion aspect, it's not necessarily more difficult to get promoted in one strategy over the other. It really depends on the specific firm and its culture.
In the end, it's not just about the money. It's also about what you find interesting and fulfilling. If you're more passionate about real estate, that could very well tip the scales in its favor. After all, if you love what you do, you'll never work a day in your life, right?
Remember, this is a marathon, not a sprint. Keep your eyes on the prize and enjoy the journey.
Sources: Top-level partners in REPE, Q&A: London REPE MF Associate, Is Partner Comp Similar in MM and MF firms?, Differences between CRE vs REPE
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