I am an Associate at a tier 1 developer (i.e. Hines, Related, Tishman, etc) in a major market and am thinking of making the jump to an investments/capital allocator role. How difficult is this going to be, especially if I am keen on moving to a top tier fund? What might I need to learn in order to help make this jump?
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Can you share more about why you want to jump?
Just feeling like the job is so slow. I want something faster paced.
Why don't you just develop faster
Are you on the construction side or business side? If you’re doing construction, it may be a bit harder. If you’re on the business side, it shouldn’t be too hard as much of your job is modeling, dealing with counter parties, agreements, etc. The role can translate well.
Agreed here. At associate level coming from one of those firms it shouldn't be too hard, particularly if you're targeting a MF that invests significantly in development projects. They value your type of experience.
I'd be careful to move, although sometimes it can be the right choice. Capital allocators are purely numbers people and they are basically just deal machines for their whole career. Once the deal is made they basically just oversee the project without being super involved. This is ideal for some people, but you will not be nearly as close to the real estate (which in my opinion is kinda boring). Also can be less valuable to starting your own shop... unless you plan to start a capital allocation shop too.
This is just my experience. But after moving from capital allocation to development, while I miss the thrill of the deal, I do find the job more interesting as it is much more multifaceted. I do something different each day. I feel like a mini CEO overseeing everything. Whereas acquisitions was very fun but repetitive. I feel like I’m getting better business skills in development.
One thing that does worry me-acquisitions folks are effectively in sales and building their relationships and book of business. If they move, the relationships move with them. In development, you may not see or access those similar relationships - especially if you do development management. The sales person will always have more upside than the execution person. With that said, the development management person will still build valuable contacts to help them get a deal built, which is arguable super important.
Similar position to you although I didn’t move from LP to GP, I did somewhat make the move from GP Acquisitions to GP Development and one area I can see this role lacking in, at least from my perspective, is the lack of deep market knowledge of a wide variety of areas. I’m more junior, so when you’re coming in at a bigger shop my experience has been we’ve already chosen the market and are set in the projects we have there, so we don’t typically need to continue monitoring it for ongoing changes and seeing new areas outside of our pre-defined scope. I don’t think there’d be any issue from a technical perspective, but some of these Acquisitions roles build strong fluency in all fundamental metrics and teach you what to look for that makes a deal look attractive quickly and how to articulate that coherently to investors / IC. Not that that can’t be taught on your own, but something to brush up on at least from my experience.
Echo the market knowledge sentiment. I definitely do not have a pulse on the market like I used to. While I miss that, it’s just not necessary when you’re in development mode and getting the building leased and stabilized. It’s good to be tangentially aware, but I don’t really see it.
OP, I was I similar seat to you, investment analyst at a major developer in a regional European capital. I joined a REPE fund which focuses on opportunistic investments - special sits and ground up development mostly. My development experience was a huge plus in the interview process. I had a roughly similar amount of transaction experience to a REPE analyst with same tenure (I was very fortunate - this isn't standard), but I had a deeper understanding of the development process (likes of design, entitlement and procurement) compared to a REPE analyst.
Agree with Pudding . Acquisitions is repetitive and eventually the learning curve flattens a lot - you underwrite the same asset class / location repeatedly, you debate the same points with IC, and you argue over the mostly the same points in documentation (JV, acquisition, financing etc). It's great while you're learning as you see a lot more deals and get a lot more transaction reps, but once the learning curve flattens it can get pretty tedious at times unless you love the deal process. Having evenings / weekends blown up by live deals is far more frequent than in development, and the hours are longer. The culture in REPE is also less pleasant as it's more finance orientated - more egos, less care for WLB, "work hard play hard" type stuff.
I think I'll give it 1-2 more years to get more transaction / negotiation experience, and then see if I can either go back to my old team or join an acquisitions role in a development / operating partner. I'd like to be closer to the creation and delivery of the business plan rather than reviewing it / making suggestions on it.
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