Megafund RE debt vs RE equity

Incoming debt SA at a top RE megafund in NYC. Assuming that return offers will remain sparse next year, I’d love to gauge how CRE veterans view acquisitions vs originations in times of market upswing.

If you’re a senior analyst/associate at a large firm in a high deal volume environment, would you rather be at a sophisticated equity shop or a sophisticated debt shop? How would compensation and your learning experience differ between these roles?

I already feel myself getting pigeonholed into debt based on this hiring market.


Bro are you fucking dumb? Pigeon holed off an internship. For gods sake. In all likelihood, you’re understanding of debt, real estate, and capital markets is probably shallow. If you knew how inter related debt and equity are and how transferable the skills are, particularly at a junior level, you wouldn’t ask this question. One isn’t better than the other. They are both very nuanced and you can pursue a variety of different strategies within debt and within equity themselves. It’s about what you enjoy more. I thought I wanted to do equity and did it out of college. Switched over to a debt fund and actually enjoy it more as less focus on operations, a bit more high level, more finance oriented, etc. you make good money in both, especially at the top shops.


The hiring market is abysmal. Why would a megafund hire me as a full-time equity analyst over the 100+ acquisition summer analysts at megafunds who didn't receive return offers? Maybe you're not aware of how horrendous first-year analyst hiring is right now, but I have every right to be concerned lmao


If you want someone to sympathize with you and cry and whine like a bitch, go elsewhere for that.

Did you not read what I read above ? I said the skills are VERY similar at the junior level. That is one reason they would hire you. Another reason they would hire you: you put together a great reason as to why you want to do equity having experienced the debt side, you show your passion for real estate, why you are interested in their equity strategically specifically. its about crafting a narrative and selling yourself. It’s about understanding a firms strategy very specially and communicating that you understand how they generate revenue and return and what they do differently. resume is only good to get anybody passed HR. after that, it is all how you sell yourself. look, if you are in a MF debt seat and cant make it to whwre you want to be eventually, then eberyone else, relatively speaking, is beyond fucked. so if you dont have the stomach to handle market cycles or you dont have the confidence to sell yourself and your abilities, look elsewhere. its about much more than what your resume says. that only gets you in front of the rigjt people. it DOESNT get you the job.

And of course I know how tough the market is. I’m dabbling around myself. And I graduated in 2020. It’s easy to think that the way you have it is the hardest it’s ever been for anyone. Perspective is important.


That is not categorically true. Depends on the vintage of the fund within which you have carry and how that equity fund performed. Also, there are debt funds out there that play in public RE debt as well and are active in the securities / bond market where they are levering up and have the potential to again generate equity like returns. Lastly, there are debt funds that play very high up in the capital stack and may also originate pref, in which you have the ability to share in profits, aka similar to equity. As I said earlier very clearly, there are nuanced strategies between the two and it is not as black and white as you make it out to be. To make this easier for you to understand given your lack of knowledge, someone at a core fund will not necessarily make more than someone at a high yield debt fund.


Are you guys hiring or open to at least connecting ? Moved over from equity to debt and am very glad I did. Looking to be in NYC, however.


Generally speaking this is correct but you have to remember that debt transactions vastly outnumber equity transactions and you need way fewer people to pump out capital. You end up making a good amount just milking management fees amongst a smaller group of people. You can also lever up with cheaper debt and pocket the spread.

Keep in mind performance matters but most hedge funds pay top dollar despite underperforming basically all investments. They keep the lights on and then some with just management fees.

Coming from an equity guy.


You do realize that this is one of the most interesting debt markets of our time? If you embrace it and learn what you can, you should come out of it with a ton of great experience that will pay dividends for years to come. 

But if you truly think your life is over at 21 because of a debt internship, then you should really quit business school and change your major. Maybe drama?


I never said I'd be miserable in debt or anything lol I'd just rather have maximum flexibility at the age of 22-25... regardless, I totally get your point about debt, but I'm scared because I'm specifically working in cmbs (which is doing very very horrible right now) 

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In the end, it is going to be more about how you handle yourself than anything else. If CMBS is slow (and everyone you interview with will know that to be the case, so you won't have to explain it), the question is always what did you do with your time? Did you fuck around and play golf everyday or did you self start and pull up a bunch of old deals to practice modeling (which is literally the best way to practice because you have the damn answer guide handy to check your work)? Did you come in late and leave early everyday or did you read through tons of deal memos and ask your seniors questions on the whys?

You decide who you want to be and what makes you the most marketable later.


debt > equity for the foreseeable future, not just in RE but PC > PE as well, coming from a MF PE trying to move into RE


It will be a debt based hiring market for a while.

Learning the debt process is good though. If you can get an equity position right now, it will likely be in asset management and you should be concerned about the company’s stability.

Be concerned about getting a pedigree and experience. If that is not equity right now, try to move over as soon as possible.

I would always prefer to hire someone currently employed over someone who is unemployed.

Don’t sweat the harsh feedback and focus on good things you can control.


Debt and equity are very different. They have different priorities, outlooks, and incentives. Debt is a huge part of the capital stack, so understanding how debt thinks is a great skill.

You need to be concerned about your employer’s stability. A lot of companies are about to go under.


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