Is Portfolio Management in CRE Dead End?
I'm a recent grad and new Analyst at a large instituitonal CRE company in Canada. Primarily I'm on the Portfolio Management side doing things like Quarterly Performance Reports, Return Analytics, Portfolio Impacts, Collection Rates, etc.
My fear is that it's sort of "dead end" with the type of work not being super client facing. The team at the Analyst level has overlap with some AM and Development work and from what I can see with the more senior people is that they tend to pivot to those branches when they can. In the future I was thinking of pivoting there too but was wondering how viable PM is?
Depends what your end goal is. The longer you are in it, the more difficult it will be to get "closer" to the asset. But PM offers a lot of exit opps for large institutional equity funds, banks, debt funds, etc.
It's all about how close to the property you want to be. I put Portfolio Mgmt. on the farther away side of the spectrum. Still a lot of good opportunities.
I ain’t gonna cap w you it’s a pretty shitty job
For a first job it’s fine. You could pivot to lots of things after one year, but I would move quickly. Figure out what you want to do long term and make it happen
A key aspect of portfolio management includes relationship management with investor (in your case instittutional investors). As a first year, you're not going to do any of that, same as analysts in other functions (acq analysts won't likely be calling brokers/jv partners).
What you should be trying to learn is the operational side of the business, which is very important to understand even if you pivot later on. Learn how to be able to speak intelligently about how how/why a deal works in certain fund structure. You will soon learn how certain group win bids on deals, how a fund structure leads their acq team to outbid other competitors, why allocating capital to certain market, why certain deals work and some don't and what not. Yes, reporting sucks, but so does spreading rent rolls, downloading war rooms, updating comps and all that other bullshit a young acq/dev person has to do. I've done all of those grinding work for all these departments in my lifetime.
Is it a dead end - no
Is it not "super client facing" - no. You're dealing with investors that are funding majority of the capital stack, it is as client facing as it can get (at a more senior level of course)
Just take your time, be a sponge and soak in all the knowledge then decide what's right for you 1-2 years later.
I don't think it is fair or accurate to call these roles "dead ends", the real "issue" (if you think there is one) is that portfolio management (at an institutional investment mngt shop), is really more of a "finance" job than a "real estate job" (like traditional acq/am). So, you are not really getting as much direct exposure to deals, properties, markets, etc. (i.e. all the stuff that makes real estate, well... real estate). Instead you are probably seeing things like fund accounting, investor relations, reporting, fund strategy, capital raising, and hopefully some direct portfolio decision making (like do we target offices vs. apartments, primary vs. secondary markets etc.).
So, the career trajectory can be within the firm/fund managements space, which can be cool/interesting/well paid, etc. Just you may not always stay in "real estate" and may become broader "alternative asset" focused or whatever.
That said, you are an analyst, and a recent grad.... you can still move/do whatever. The experience has value and the concept of pigeonholing is mostly bullshit. PM and AM are heavily related (and essentially the same team/people at some firms), you can absolutely add value to the capital markets/fund raising activities, and really it shouldn't be impossible to get an acq job. Development would be farther away, and more of a "jump", but people do this often from all sorts of fields.
So, learn all you can, make a decision on where to go after a few years.... seriously, people are "tracked" in some rigid way from first job out of UG, just not how the world works!
I’ll add to this because everyone always says you can’t jump around, and you can.
I’ve gone from asset management -> acquisitions / lending -> debt capital markets and bridge lending -> acquisitions/asset management / portfolio management -> development management.
If you want to be in portfolio management, it is not a dead end. If you don’t want to be in portfolio management, it’s a great first job. And once you have 1-3 years under your belt, begin looking to move.
Not sure how it could be considered a “dead end” when there are people at every large firm in portfolio management all the way up to Partner Level. At my firm, the most senior non partner in PM is being groomed for a Partner position currently.
Now if you’re talking about dead end to other roles in CRE… not really. People at my firm and other firms internally transfer all the time. I’ve also known plenty of people who move externally to Acq/Dev/Am. Just gotta put in the leg work.
Look at where the senior portfolio managers came from. Did they spend 10-20 years working in portfolio management before making partner? Or did they work as acquisitions / asset management professionals for 10-20 years before assuming a senior portfolio management role.
I think you can guess which scenario is more common
PM is great experience imo. It's not asset-level work (more fund-level), but it gives you a lot of experience that institutional level firms value. You can also pivot to roles outside of CRE better, as it is more finance type work.
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