Acquisitions vs. Asset Management (LP)
I know - not another AQ vs. AM thread. But I really could use some input/advice here.
I've been at my firm (LP) for a few years now doing both AQ and AM. We have several sponsors that we work with on a regular basis, so the deal flow is fairly solid/consistent, so the sourcing aspect is less pertinent. I really like that I get to see different types of deals and each deal sort of have their own issues/quirks, etc. But obviously the usual issues such as the constant moving pieces, frequent traveling, IC prep etc. is not ideal but I've come to embrace it.
I also do AM, but as a LP, I find this extremely dull bc we are basically managing the sponsor's AM, so we are essentially one layer away from the actual operation. We usually have a say in major decisions, such as buy/sell, pricing, budget, major vendor/PM policy changes, etc. but other than that, the sponsors run it fairly well. At our shop anyway, its more like a reporting function.
Now the opportunity has come where I could potentially either move up in AQ (be the main focal contact with the sponsors) or AM (where I oversee more properties) and I'm really torn. Without giving too much away, essentially there will be much more interesting work in AQ but the path to promotion/raise might be slower due to the structure of my firm, whereas if I move to AM, I will likely get a substantial raise/promotion next year, but the downside is that I may lose out on working closely with the sponsors that we like, at least from an AQ perspective. And traditionally, here and I'm sure else where, AQ guys are treated with more respect (don't really agree with it) and people in AM are treated as second class citizens when they create more value.
Thoughts?
I'll answer your question with a piece taken from my experience and hopefully it offers the advice you're looking for.
I did my summer IB internship at BofA and got the FT offer but I always wanted to get into real estate so I accepted an offer from one of the top NY RE operators doing class-A office acquisitions and development. I started out in Asset Management so I'm keenly aware of the "dull" nature you mentioned. I was assigned to 6 properties and was a strong analyst my first year. Gradually, I was pulled over to the acquisitions team for various projects until I made a permanent move over to their team: this was the best outcome I could have hoped for.
In the 12-month period after the transition we underwrote ~$32B of NYC office real estate. As a result, I honed my financial modeling / Excel skills; I learned how to pick apart deals, identify where the value was hidden and estimate the price I was willing to pay for that value; and arguably most important of all, I learned how to structure deals using equity and debt as tools. I became acquainted with our LP's, was involved in meetings with guys like Jon Gray and Aby Rosen, and also learned how these guys think. All this to say that not once was I concerned about salary because I was investing in myself.
In case this wasn't at all helpful, I'll distill message here: working in acquisitions gives you the tool kit to do the arithmetic and learn the value of relationships. If you do well and keep your head down, in two years when you come up for air you'll have networked your ass off and will be a super hireable candidate if you decide to change companies. Alternatively, you'll be in a position to go out on your own.
I hope this helps!
If you don’t like asset management, don’t do it for the money. Go with the work you like. So maybe it takes longer to get promoted, but you’ll be happier along the way. In the end, you’ll make the same and probably more in acquisitions.
I can’t help but wonder wtf the senior people in asset management do - they seem so disposable. Can someone fill me in?
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