Development to Pension / Endowment Fund

Currently working at a large Developer (Hines, Related, Tishman) and really enjoying the work. Only pivot I would consider down the line would be to Investment Management at a Pension / Endowment fund at the VP level. I understand this would be a much different day to day compared to my current job, but that is part of the appeal. I have a non-RE Masters degree and would consider an MBA in the future. Has anyone seen a transition like this before? Do employees of these firms typically get to participate in a defined benefit pension plan? i.e. receive a certain percentage of their last year's salary until they die. If so, to me this seems more appealing than staying in the Development side of the business trying to strike it rich with carry. Curious to hear people's thoughts on this semi-niche part of the industry. 

Comments (7)

2mo 
King Slime, what's your opinion? Comment below:

Also interested.

endowment is incredibly competitive. Great pay, great benefits, overall great hours/balance. You'd need an MBA or some serious networking

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2mo 
redever, what's your opinion? Comment below:

I have some friends who have worked in this world, and had consulting clients of this type in past job, and a few years ago had a headhunter contact me about a role with a major church that owned tons of real estate (was extremely fascinating, but I wasn't interested in the role). So that's my background on this, know some but never worked for one. 

My thoughts...

- You would probably be a natural fit for the "real estate" arm of a pension/endowment/non-profit. This is not the same as the investment mngt side, but might be highly linked especially with respect to real estate assets/investments. Think of large universities, hospital systems, or organizations that own lots of operating/investment real estate directly (like all major churches). They do development (hospital campus, university campus, etc.) and often own a lot of for-rent/investment property as well as manage what they have for the use of the organization. So they usually have an in-house real estate team that may manage the managers (basically asset mngt) or even be direct operators/managers. Some even have full development teams or essentially the equivalent "owner" side in rep'ing projects for the org. This is wayyyy less stressful than the development business but could be largely engaging your skills/background (sounds like motivation is more about stability, WLB, meaning, etc.). But this is NOT the finance/investment management role/side, to be clear.

- Could you go to the investment management side? Sure... but you have to be very strong on investments, finance, and probably accounting to some extent. Even when most pension/endowment funds invest in real estate, they do via hired investment managers (like Blackstone, PGIM, etc.) and rely on consultants (Townsend, RCLCO, etc.) to do all the vetting/due-diligence. The really large ones that do indirect and direct real estate investing (like CalPERS/CalSTRS) will have full real estate teams, but this not that common. Even larger funds may have a total of one real estate investment person, or maybe a senior person and one dedicated analyst plus some accounting/reporting support. Often that person or team will do all 'alternatives' or be part of that group (like PE, HF, and other alt type investments), so understanding the 'alt' world maybe needed to land the job. Like everything in this world, YMMV and every place is unique, no one size fits all answer. 

- Do pension fund employees get to part of defined benefit pension plan? I'd guess yes, I'm pretty sure the employees of the big public pension funds (and probably all the small ones too) are state employees (as applicable), so should get same general benefits open to all (not sure about the endowments/private ones). Of course, there is a MAJOR downside to opting for the DB pension..... you must stay for a long period of time to get any benefit, like maybe 10 years. So, the ability to "job hop" is much more limited. For this reason, a lot people opt for the defined contribution program (401k) and usually get a very generous contribution (like 5 to 10%+ of salary contributed not related to your contribution). But if you really are committed to the long term, yeah you can prob get yourself a pension! 

  • Analyst 3+ in RE - Comm
2mo 

Great response, thanks for the insights. To your point, being on an alternatives team at one of these funds is what would appeal to me the most, as I have an interest in asset classes outside of CRE. I would imagine that attending a top MBA program with a Finance concentration could make this transition possible with my professional background. 

2mo 
redever, what's your opinion? Comment below:

So, not sure if the MBA/finance would really be game changing or not, you said you have a masters (in what?), that is probably enough to check the box, and yes these type of places can be big on that and can have direct impacts on salary level. If you actually want to make this move at the 'VP' level, you would need to do so on qualifications/experience, the MBA route would be more aligned with entering via an associate program (I'd assume the very large ones like CalPERS, Texas Teachers, etc. will have these). The smaller ones (which is the bulk) will not have resources for such and probably going to rely most on experienced hires. 

This is why I said your resume fits well for the 'real estate' side of the house, but depending on how you can frame your experience (i.e. make it investment/finance heavy) it might work for investment management (getting the experienced title could still be tough, really all depends how the place sees you with regards to the role). Rather than MBA, I'd look at things like CFA and/or CAIA, those are far more direct to the job and would probably be a better use of time/money if you already have a masters degree. 

  • Analyst 3+ in RE - Comm
2mo 

All fair points. To answer your question, my Masters is in Statistics. I think CFA / CAIA is a solid option for my long term goals. If I were to pursue an MBA it would be primarily for networking and my general interest in the subject matter (it'd be a plus if my current or future firm would cover some of the cost). Thanks again for your input

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2mo 
redever, what's your opinion? Comment below:

So, if you can get a big part of MBA cost covered, and you have the time/desire, kinda a no brainer I guess (will they pay for costs of CFA/CAIA? If so, maybe overall better use of time tbh). 

Since you have an MS in Stats.... you really should be able to learn/focus on the finance technicals... that is a GREAT degree in the investment mngt world, and actually a big plus in this overall goal of yours. I'd head direct to CFA and/or CAIA maybe take some grad certificate in finance or something, leveraging the stats degree will help. 

  • Associate 1 in RE - Comm
2mo 

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