Acquisitions vs Portfolio Management
Working as an acquisitions associate.. anyone make the transition to portfolio management or vice versa? Getting good experience but have the opportunity to switch over. Thanks
Based on the most helpful WSO content, it seems that both acquisitions and portfolio management roles have their own unique aspects and challenges.
In acquisitions, you might find yourself involved in a variety of tasks such as reviewing and validating a General Partner's (GP's) business plan, and negotiating deals. However, after a few years, the process can become somewhat repetitive and the learning curve may flatten out.
On the other hand, portfolio management can range from minimal involvement (like monthly meetings with GP) to more hands-on tasks (like weekly meetings with GPs on underperforming deals). In many firms, acquisitions are split from asset management, freeing up time.
If you're considering a switch, it might be helpful to reflect on what you enjoy about your current role and what you're hoping to gain from a new role. Are you looking for more variety in your work, or perhaps a slower pace? Or maybe you're interested in being more involved in the development of business plans and unearthing deals?
Remember, there's no one-size-fits-all answer here. It's all about finding the right fit for you.
Sources: Development vs Acquisitions Lifestyle, Switching from Big 4 to Acquisitions: My Story
I'll add the same comment I almost always do when someone asks about PM roles.
I've been on both the deal side (AM, now acq) and the fund/PM side, so I have to ask - are you looking to be in more of a "finance/FP&A" role like this given your experience with acquisitions? Do you enjoy actually working directly with deals and understanding the market/product/tenant base?
If so, I'd strongly suggest avoiding fund/portfolio management roles unless its a huge jump in cash comp. Unless they have explicitly stated that the PM team has direct involvement in portfolio structuring/composition, operations, and strategy, it will essentially be a reporting and analytics function, akin to FP&A in the corporate world. 9 times out of 10, you don't want to be on this side of things if you want to stay involved with the actual real estate/strategy, understand where your markets are today, or have outside connections to brokers, lenders, other developers, etc.
Anecdotally, the PM group I was in promised a higher salary and a lot of interesting work ("having direct input into portfolio composition, crafting operating/disposition strategy, fund restructurings, complex ad-hoc analysis for C-level execs") but in reality was so far detached from any real decision-making that the work felt pointless at times. It was essentially KPI reporting veiled as "portfolio analytics" with no actual management of anything outside of models, ensuring liquidity/no breach of covenants, and making sure our fund administrator wasn't fucking up financials/waterfalls. Endless reps on updating asset- & fund-level models and running every scenario imaginable.
The above being said, I did work closely with a lot of our internal groups (development, acquisitions, AM, credit/structured finance, accounting), fund modeling was interesting and certainly more intricate than the asset-level, my accounting chops got much better, and I did learn quite a bit about the logistics of running a fund.
However, "running a fund" is not the same as actively constructing/acquiring/managing a portfolio of real estate assets. The deal guys (acq/dev/credit) were responsible for actually sourcing the portfolio, the AM team was responsible for actually managing the portfolio, and the disposition team handled sales. All the info from those groups had to be synthesized into models, ad-hoc analytics, and exec/LP reports, but ultimately the PM team was not leading on any of these core facets of the business. We made sure the nuts and bolts were in order (cash planning/coordinating funding to other teams, ensuring liquidity at the fund level, sizing distributions, mark-to-market valuations, compliance with covenants (asset & fund level), determining appropriate use of subscription line of credit, and of course fund modeling/return projections), which is what I mean by "running a fund".
Was it pretty easy for you to make the pivot from AM to acquisitions? Did you end up liking/finding more value in acq?
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