Real Estate MegaFund Vs. Traditional PE
I'm an incoming full-time analyst at a top BB (REGAL group). Recently, I've been approached by headhunters inquiring about my interest in PE. I'm seeking insights on the key differences in culture, work-life balance, compensation, and career trajectory between working at a Real Estate MegaFund or UMM firm versus a traditional MM private equity fund.
To provide some additional context, I feel quite confident about securing a position at one of the larger real estate funds, given our group's strong track record of placement. However, I'm less certain about my chances with traditional PE mega funds. Here are my initial thoughts:
- I anticipate that working hours at a MegaFund in real estate private equity might be more demanding compared to those at a mid-market PE firm.
- Compensation at a MegaFund in REPE seems more lucrative initially, but mid-market PE might offer better long-term financial prospects due to easier advancement opportunities and potential participation in carry.
- In terms of career progression, my inclination is to rank mid-market PE above MegaFund REPE due to the reason stated above.
I would greatly appreciate any insights into the pros and cons of these paths, as well as personal experiences that could aid in my decision-making and recruitment focus.
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I work at a large RE investment firm (35 bn+ AUM) and I will just add this - everyone is trying to screw each other in real estate. The tenant is trying to screw the landlord, the landlord is trying to screw the tenant and the brokers are trying to screw both buyers and sellers. It’s just not a very healthy industry to be in. I am coming to believe that you can’t be a good person and be a good real investor too. You inherently need to be a big a-hole to make it big in RE.
I’m not surprised…but do you think it is that much different in traditional PE?
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The average KKR / BX / STWD REPE partner is easily outearning the average MM / UMM PE partner, even solely by AUM fees and not accounting for their carry participation. I know some BX partners specifically who rake in more than corporate PE peers.
If you are thinking about personal interest and visibility to reaching partner, that’s a different question. If you aren’t passionate about the industry, you won’t make it to partner regardless, so there’s no reason to try and optimize for theoretical compensation. Plenty of top candidates opt for either path by their own reasoning, but I would think the only sustainable reason would be their passion for the field.
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