Hi everyone
does anyone know how the day to day might differ as an acquisitions/investment analyst at a developer vs an investment analyst at an REPE fund focused on opportunistic deals (I.e partner with developers)
Curious about how similar/different the exit ops are and how the day to day changes depending on your role
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From a pure learning standpoint, I’ve always preferred acquisitions for a developer as opposed to being the LP equity in a development project (AKA opportunistic REPE in this case). The reason being that the acquisitions folks at the developer are the ones who are developing the relationships with brokers, understanding the market at a granular level, sourcing sites, communicating with architects and contractors thus allowing them to form a strong understanding of hard costs, and most importantly, CRAFTING AND THEN EXECUTING THE BUSINESS PLAN. The developer is the one who truly does all the work and thus knows how to put together a business plan and then also execute on that business plan. The developer is the one who is sourcing and closing on the land and is closest to the transaction process. The developer is the one who is modeling all the way out to GP level returns and is the one who is taking on the most risk and thus has to be the most informed and knowledgeable. On the other hand, the LP equity is more so overseeing this process from a high level and ensuring milestones are being met. The LP puts the developers underwriting in perspective and may push back on assumptions, etc. But, at the end of the day, the REPE folks, in this particular scenario, are simply allocating capital. They are looking to see if they 1) believe in the project, 2) believe in the developers behind the project, 3) understand how this project fits within the rest of their fund / strategy. In this case of partnering with a developer, the LP equity is just that - equity. An equity partner with rights and decision making ability. But they do not execute on the day to day. They do not go as in depth as the development folks will go into when determining the zoning for the site, appropriate unit mix, etc. The difference in the day to day is exactly this. Do you want to be more high level and allocate capital to a variety of projects with a variety of partners OR do you want to learn how to craft and develop a business plan from the ground up and then execute on that business plan on behalf of your equity partner. In terms of pay, I would say, in the short-term, pay would probably be better at the REPE fund. One is not better than the other. It’s what you want to do. I do believe that in terms of learning being at a GP role like this is more beneficial, but that’s my opinion. I wanted to learn everything from scratch and thus chose the GP route. If you prefer examining a greater variety of markets, working with a greater variety of partners, and want to be more high level and more so just focused on numbers, then maybe REPE suits you better.
That’s a very helpful answer, would your answer change if the REPE fund has in-house developers so the investment analysts model things at the GP level?
i figure that role would let you look at more markets (similar to what an REPE analyst normally does) but also be just as competent at underwriting a potential development deal
also second question, is it hard to transition between the two roles?
This is why I hate the term REPE lol. It’s confusing and has no set meaning and thus makes it inefficient to use when describing what you do. That being said, could you elaborate more on the two roles to make sure I’m properly understanding. Role 1 is essentially land acquisitions at a developer. Does this developer raise funds or do they raise on a deal by deal basis? I’m a bit confused as to what role 2 is. You mentioned in role 2 at the REPE fund you would be partnering with developers and thus I assumed that meant allocating capital within certain projects that an external developer has sourced. So how does Role 2 have in house developers and what value do those in house developers then serve? Nonetheless, it is not hard to transition between these roles, especially at the junior level. People love to make it seem so different but as I explained earlier both parties work hand in hand with each other.
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