Weighing 2 offers - RE PE vs MM PE
Hey guys - weighing between 2 offers I got recently. Would appreciate insights on the long-term career prospects and "exit" opportunities in terms of career mobility in the future.
RE PE pros:
- worklife balance (50 hours), travel, ability to work at different international locations, better pension and other benefits, and office is placed at a city I want to move to
RE PE cons:
- the RE PE job is a 20% paycut from the MM PE job but I think that's also just the nature of RE vs traditional PE
- I've never worked in RE before, not sure if i will love it, and it is a more niche field that I'll probably have to stick with for a while
MM PE pros:
- interesting team, good culture/people, new fund raising, interest in the work
MM PE cons:
- worklife balance (70+ hours), somewhat niche industry coverage
Personally I’d go preferred location with a slight pay cut, but I’d try to speak with as many RE folks as you can prior so you know what you’re getting into and that real estate generally interests you.
Also- it seems you value a work/life balance, so that plays in your favor as well. You also have the ability to negotiate- its 20% so tell them you have an offer in hand but just want them to get slightly higher.
Over time RE PE much less lucrative than MM PE. That gap won’t be apparent for 5-8 years, but underlying economics in RE just much less interesting
Sorry, can you elaborate on this one? Thanks
RE PE charges lower fees and on average produces lower returns. That combinations means that a dollar invested in MM PE produces more fees and carry than a dollar invested in RE PE. When you reach a point in your career when your comp is more a function of the value you create versus supply and demand (eg when things get interesting) you will either make far less money or be responsible for investing far more assets because of the underlying economics
This is a stupid analysis without looking at fund sizes and return profile of the real estate fund. You’re telling me a real estate partner at blackstone is making less than a partner at a mm pe fund? No chance. Blackstone has way more assets under management in the re arm so carry pool is multiple times larger without needing significantly larger headcount. There are also partners at core real estate funds making ridiculous amounts because asset base is so large and their work life balance is about as good as it gets.
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