How large is $30B AUM considered in REPE?
Have an interview with a firm with $30B AUM. Just wondering if this is considered MF in the world of REPE. It doesn't really matter, just am wondering.
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That’s pretty big
That is considered big.
need at least $1t to be prestigious.
Would comfortably be in the top 50 firms globally, but aum numbers are easy to manipulate/bullshit.
We have an in house property management division, and we used to list all our property management contracts in our AUM at the buildings valuation, even when we weren’t the asset manager.
Is that all RE or does the firm do other stuff?
just RE but they are vertically integrated so they have a property management division too
Those numbers don't usually mean much.
In the real world, it is about profitability and available capital. A 500mm fund that is making a 25% irr 2.5x MOIC is going to be way better than a place with 12bn making a 7%.
$12bn fund takes in a lot more fees to pay cushy salaries though.
Most funds that are 1bn+ give some sort of fee concession/holiday to large investors. Also, fees are on NAV. How many funds right now have huge commitments, but litte actually invested (or worse, have lost money)?
Larger funds = more fees, but also more mouths to feed.
500mm is way easier to put out and move on to the next fund vs. Trying to put out 12bn in 3 years and then starting a new raise.
I'm at a place that just raised ~3.5bn. Our first fund was ~1.5bn and was invested with a team of 6. At 3.5bn, we've 2x our team and plan to hire 3 more. So 2.33x the money, but 2.5x the team. That math only works because we still have fees from fund 1 and we've hired analyst/associates to fill out the team.
Not MF. MF definition is usually over 100 bn AUM but also offers various investment strategies across real estate, private equity, direct lending, etc all in the same firm. Ares for example is considered an MF but their real estate AUM is only $50 billion. Find sizes usually need to be over 4-5 billion. All subjective and kinda arbitrary though.
Second this
I was in institutional capital raising for several years and I have never heard the term “mega fund” used outside of WSO. We raised funds from $250m-$5bn+ with additional SMAs/Co-Invest vehicles. No investor or consultant has ever had a mandate to only invest in a MF. Usually size constraints only come into play for ultra large pensions and SWFs who have a minimum check size ($100-250m) but also a maximum concentration limit (25%). But yes, $30bn is big for a firm.
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