CFAs in real estate?
Starting an entry level job with a small developer and my boss wants me to do my CFA to develop a foundational financial understanding (came from non-business undergrad). My role will revolve around project management and elementary analyst work. I'm wondering how many people in real estate have CFAs. I know CFA is more capital markets focused, but do you think there are attractive characteristics in it for real estate?
When analyzing RE at a deal and partnership level, i think a CFA designation would be worthless. If you know 8th grade algebra and time value of money, you will be fine. I think a CFA could be valuable if you were less interested on deal-level analysis and more interested in fund accounting/taxes.
Wouldn't a CAIA would be much better for real estate?
CAIA would be much more beneficial in terms of RE compared to the CFA.
That is incredibly odd
That is a very odd request like the others have said. I can see the usefulness of level 1 because it gives you the broad and fundamental basis of finance, accounting, and economics. Studying for level 2 and 3 would be very excessive and won't help you much.
I think it's really just about doing level 1 for the topics you described
IMO the CFA is great for capital markets jobs because it's a "oh wow heard it's hard hmmm impressive" type designation. If you're a debt broker at HFF and your deal sheet and nice suit isn't enough to get you picked over your competitor at Eastdil maybe the CFA will resonate with the nerdy portfolio manager at the investment manager you're pitching. Point being maybe it's not super relevant but it's a good +1 if you have 1000s of hours of time to spare.
Not worth it. Review a RE finance textbook and you will be fine. The most successful people in real estate aren't the smartest, but the savviest. Wheel and deal my friend.
Some of the PMs in large REPE shops will have the CFA. Some more senior guys in acquisition sometimes have it (much more rare)
It's not as prestigious but CCIM may be a better option than CFA. I would look at CAIA before doing CFA too. Deciding factor also depends on if you are a real estate lifer? If so, I don't think you'll benefit much from doing CFA. Just my $.02.
CFA for RE Development? (Originally Posted: 12/08/2013)
Although more useful for AM, PE, and HF, would the CFA be of any use to me, a student looking to get into RE development? After interning at a small HF as a summer analyst, I began studying for the CFA. This summer I am interning for a RE Development firm and wish to work for a Development firm out of school.
Would the CFA be of any use to me or is it not worth it at this point? Coming from a non-target with a 3.5 GPA, I figured the CFA probably couldn't hurt. Are there any certifications or other RE exams an undergrad can take to prepare for Development?
Cheers
Hell no. If you'e set on RE, use your precious free time for something else.
Get a masters in real estate development (MRED) if that's what you want to do.
Can't understand for the life of me why you would think anyone in real estate development cares that you have a CFA designation.
If you look at a REPE firm, some people do have CFAs, but in development it doesn't make any sense.
To add to my point, I'd use that time for networking + GMAT + an interesting extra-curricular activity. Top Dev shops are becoming populated with more and more T10 MBAs.
I'm one of the guys who isn't a huge fan of the MSRED. It's definitely useful for those looking to break in, but lets face it, RE finance isn't rocket science, almost all of the true learning is experiential. To that end, a top MBA gives you much better branding...especially to those LPs.
Tbh I dont think mba matters either
Never have been asked about a sponsors education when pitching a deal to a potential lp
From a signaling perspective, anyone really in the know would or should not look at an MBA as some gold standard heuristic of business expertise or intelligence. In that regard a CFA would be more impressive.
I have heard several top MBAs talk about how B-school was fun, but the CFA was truly brutal. For that matter, a JD with bar passage would be a better indicator of intelligence as any tier 1 law school requires the applicant to place in the 95%+ percentile of the LSAT which is a far cry from most b-schools.
To be honest I'm not sure what your post means, at all...The Top REPE/Dev shops like them, and recruit them. Period. How's that for signalling.
The CFA being brutal? Who cares? It's largely unrelated to the industry, especially Dev. I'm sure it's hard to pass the board exam to become an Anesthesiologist too. That doesn't mean I'm going to try to do it, so I can put it on my resume. How is this even remotely relevant?
One other thing...come back with your 730+ gmat score, and tell me it easy. (It's the 96th percentile btw)
In light of all the financial scandals plaguing top MBA's 1 perhaps an institutional LP reviewing the investment docs would have a little more investor confidence if one of the executive team members was a CFA 2:
"CFA charterholders, for example, must abide by the CFA Institute Code of Ethics and Standards of Professional Conduct, and they have to reconfirm their compliance with it annually in an explicit statement.
More and more pension funds are checking whether an Asset Management firm has adopted the Asset Manager Code of Professional Conduct before they invest; this serves as a signal that the company is committed to high standards of ethical behavior. Perhaps it is time for retail investors to do the same."1 "Harvard Begins Case Study as Tainted MBAs Reveal Damaged Brand" http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aL0jFzKptwwg
2 http://blogs.cfainstitute.org/marketintegrity/2013/05/02/mri-internatio…
Also, life is long and perhaps OP could do his stint in RE Development (as a PM or Dev Associate, etc) and find out after some period that Development is not for him. Having say 5 years in-the-trenches experience at a developer plus a CFA would give him options (without the need to leave work for 2 years or incur $100k worth of debt) to move over to RE Private Equity or RE Consulting. Search around linkedin with CFA and "Real Estate Private Equity" and it is clear that the connection in these roles is not arbitrary or tenuous.
CFA is a serious time commitment for something that doesn't have much (if any) relevance to real estate development. Some of the older guys in real estate have the designation from past careers in AM, research, etc. It was also much easier to obtain 25 years ago. There is a small real estate section on the CFA but its a joke.
Cheers for the responses. Just curious, if CFA is not in my best interest and I can manage my time better between networking, reading different books, etc, would it be better to focus on an MBARE right out of undergrad, or try and work for a few years then go back, being that I am working to become a developer.
Thanks
Don't do it right out of undergrad. Most MBA and MRED programs prefer work experience. Work a few years and then go back.
Ut Ameris, two things. (1) A Harvard MBA is not a "scarlet letter of shame" as that article states, and (2) The title of this thread is "CFA for RE Development?"
While the CFA is a great designation, the answer to OP is no.
CFA is completely unrelated to real estate. Its got nothing to do with real estate development, finance or investment! RE analysis is not as complex as equities. As long as you can wrap your head around DCF and IRR and NOI you can do just about all real estate analysis you would ever need. If you are looking to beef up your resume, you are better off doing it with internships and (IMHO) an advanced degree
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