Currently in CMBS but have the opportunity to join MetLife (Associate level) on the equity side. I was wondering if anyone is currently in a similar role or has any insights as far as the gig/exit opps. I'm definitely more interested in this than the debt side where I've been for years.
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I’ve worked at two different life cos in my career, both on the RE equity side. First stint was in asset management and now I'm in acquisitions/JV origination. A/O is more rewarding than AM imo. We do mostly LP equity investments with a little direct investing in local stuff. Met life probably does way more direct investing since they're about triple the AUM of my company.
There are definitely pros and cons to working at a life co.
Pros:
Great work life balance. None of my colleagues work more than 50 hours a week and never on the weekends unless for a conference.
Probably the best job security in the business. There were zero layoffs at one of the companies during the GFC. Granted no one got a bonus for two years but everyone was happy to get a salary.
Good but not great pay. Guessing you'll make mid to high $100s after bonus your first year Annual 3-4% raises are common.
The flood gates are always open. Life cos seem to have large appetites for CRE and there is always money to invest. One of the common phrases when discussing the pending recession is "what are we going to do, stop investing?"
Great deal exposure if you're on the acquisition side and you'll learn a lot.
Great dinners with sponsors wanting your money for their projects.
The people I've worked with have been smart, nice and generally low key. Not the cut throat, screw your neighbor shit you see elsewhere.
Cons:
Low attrition so moving up takes time. That goes back to my comment about the pay being good but not great. It'll take you a long time to make real money. The average tenure at my first gig was like 15 years. Probably a little less at my second.
Life's cos are conservative and don't like to go outside their box. It can be very frustrating when you think you have a great deal and someone shoots it down because the check size is $1mm below the threshold.
The corporate culture is a little lame.
Exit ops. I've seen interns go into REPE but not to top firms. Think Harrison street or crow, not BS or Carlyle. One higher-up is now the director of RE investments at a large family office. Another colleague went into development. Basically it'll open the door into other institutional investment shops.
Hope this helps.
This is probably a dumb questions, but I'm assuming "life co" is a life insurance company? I'm confused as to what this has to do with real estate, unless they allocate their funds to generate returns, and invest in real estate to make money? Can you shed light on this please? I've seen lifeco mentioned a few times here, but haven't been able to connect the dots...
Yes and yes. Don't overthink it.
Life Cos need to invest the capital they receive. Big shops usually have an investment arm and real estate matches well with their investment goals. Smaller shops invest money with the bigger ones since they won't have a whole team to execute.
Thank you sir, this was extremely informative/helpful. Appreciate it!
how many years of exp. to get to an all-in comp. of mid $100k?
Depends on the market and the firm. I was once offered around $130k for SF with 2 years of experience coming in. Didn't take the offer however.
Curious as to how you leveraged your CMBS experience to get to this point with MetLife?
I moved from CMBS to equity side, nobody else at my company did.
CMBS to principal side isn't common and since you want to be on the principal side you should absolutely take it.
I'm an associate at a small fund manager. The modeling skill set you develop on the equity side especially analyzing development opportunities is as advanced as it gets for real estate (unless you are creating the CMBS bonds for Wall Street. There is more creativity involved because equity sits in the wide middle of the risk/reward spectrum between senior debt and sponsor equity. Analysis on the debt side seems to focus on downside protection/worst case scenario, analysis on the sponsor equity side significantly concerns max potential upside and achievable promote, while analysis in the LP equity space boils down to a balance between these two paradigms, essentially return on risk.
I work in Equity AM for a major LifeCo.
Love it. Culture is amazing, work/life balance is great and I get to travel as pretty much as often as I like. I usually get in around 830 and leave at 6-630 but if I left at 5 no one would bat an eye. Most are out by then.
Only thing that sucks is that Insurance companies have tons of processes and guidelines in place.
Out of curiosity...how are the big life insurance firms structured internally when it comes to real estate: debt shop...equity shop...and asset management shop?
What's the mix of acquisitions that are wholly owned vs JV?
My only dealings with life companies have been on the sponsor side shopping for debt.
At my shop everyone is on the same floor. there is a debt team and equity team each with their own AM team. The equity AM was obviously more hands on while the debt am team had a much larger portfolio to deal with so they just put out fires when needed. There is also a research team and a tax credit team. Little overlap between the groups except on the investment committee. Debt made up about 70% of the total RE portfolio with the balance going almost equally to equity, PE funds and tax credits. Most of the equity was jv and preferred. Very little was direct ownership. I’ve heard other shops get more aggressive with the equity and direct ownership.
Appreciate the insight.
What exactly does the debt team do? Invest in senior loans, mezz? Anything else? I am in cmbs originations right now for a mid size bank, would my skillset of originating cmbs loans be transferable over to the debt side? I have mainly worked with only stabilized properties, dont have a lot of experience with transitional assets. Appreciate any insight or advice.
C
Try networking with mortgage bankers with correspondent relationships with the life cos you want to pursue. They may be able to connect you directly.
Or just network directly with the people at the life co’s you want to work for.
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