Q&A: 2nd-Year REPE Associate @ Carlyle - AMA/Knowledge Dump

Networking is crucial. I would not be where I am without it. In the real estate world specifically, many deals are brokered from individuals who already know each other, as well as getting into the field. To whoever is reading this - if you're on this forum or somewhere else, you've probably heard everyone say "GO NETWORK RIGHT NOW SO IMPORTANT GO NETWORK FAST RIGHT NOW GO" and it may be tiring. I get it, to be honest. It's not fun throwing your resume to everybody on the block, it's not ideal to constantly have to talk about yourself and how great you are. And guess what? Sometimes, that's not the way to go. Last thing you wanna do is burn some bridges by talking everyone's ear off, but it's a rare occasion that it happens. 

There are times when to strategize who you speak with, and sometimes you just gotta throw shit at the wall to see what sticks. If I can remember correctly, while approaching my MBA graduation I began seriously looking for FT REPE work. Based on my background, it wasn't so easy as landing the first gig I got. I am not exaggerating when I say this - I believe I was in the ballpark of close to 700 applications. I was in Charlottesville - I applied to firms in LA, Seattle, Phoenix, Houston, Witchita, fucking Ithaca - EVERYWHERE. I applied to places I didn't even want to work. To some extent, I don't recommend that, but I got lucky with a few people I knew and ended up getting the REIT gig. That's how my path went, yours may be different. 

I think the bigger point I want to touch on goes beyond getting your first job. Networking cautiously, carefully, and profusely - monitoring what you say, who you say it to, and how you go about presenting yourself & your work is greatly beneficial in building a professional rapport and clientele. Are the guys at your prime bank not getting back to you in time before a team update meeting happens? Not your fault, but that meeting is happening no matter what, and it's gonna negatively reflect on you when you have nothing to say. Oh, look at that! Turns out one of the Analysts over there was someone you knew in one of your MBA classes. You were always nice to him, he respected you. You give him a call - he says "sorry for the delay, let me call over to one of my guys on that deal!" and it comes through. If you were an asshole to him, he wouldn't have lifted a finger to help. This is a real-life example of MANY that I've had through the connections I've built with everyone throughout the years. In my undergrad, I was an asshole to people that I didn't like. Once I got out of that frat kid college boy stage, it's easier to realize that if someone has a 0.1% chance to do you a solid in the future, you better be nice to them. This applies to all positions, all departments, all sectors within finance, all industries outside of finance - just don't be a dick. It goes hand in hand with networking and can benefit you greatly. 

But overall, yes - networking is important as hell. I think of it as putting in the work now so that it can pay off later, i.e., the example I used above. Talk to people, learn about what they like, what they do, and damn - you may even meet some cool people! My three best friends are those that I met through the financial world, always on the other side of the table, but sharing the same amount of mutual respect for one another. Two of them live a plane ride away from me. Doesn't matter - just how it is. Best of luck to you & breaking in. Always here if you need any additional advice. 

This one is tricky, and sometimes I've stepped on a few toes when I've said this (looking at you, Reddit), but to be honest? Long-term, I'm not worried. You cannot run a functional company from a video screen. From personal experience alone, I worked from my apartment from my house for nearly a year and a half. It was a logistical and operational nightmare. Missed communication, inability to interpret intentions, tone, and everything in between - fucking nightmare. WFH is trendy right now, and there's a huge push to keep it going for the long-term future. To SOME extent, I get it - I think one good thing about this whole pandemic thing is that we cut down on some flack regarding people who don't ACTUALLY need to be in the office, and virtual communication was streamlined and made some good advances. But I can tell you, from both my own firm, the clients I've worked for, and all my friends - it's not gonna last. 

Office space is in relatively low demand in my specific area. I know personally of many sleek and shiny buildings, both those that we owned as well as those I just know of. A lot of those offices are empty, and I've actually been greatly impressed by the creativity of some folks I've seen - those that are unable to come into the office, how they've turned their own homes into working spaces. Small companies forced to shut down that have made home-office additions, creativity with COVID barriers, and procedures. We're definitely seeing an uptick in corporate leases both around here and from our partners nationally, but it'll be a slow push. BUT, as I said - it'll happen eventually. I'm not gonna sit here and give some "AMERICA NEEDS TO GET OFF THEIR ASS AND GO TO WORK" faux macho-esque speech, but we must return to the office at some point. I'm back to five-day weeks and have some flex time built in. I can work from home if I CAN - often, I prefer not to just because I gotta get the fuck out of my apartment sometimes. But I've seen too many people who think that we're all just supposed to say fuck the office, I'm gonna do my entire job from my 2011 HP laptop. It's just not gonna happen. Initial O/C-RE trends are suggesting that it'll take a couple of years for offices in major metro areas to populate again, but I think that we're slowing the build process, waiting for the market to catch up. When the demand rises again, we'll switch back again. I'm optimistic it'll happen sooner rather than later!

As for niche markets, one thing I mentioned was HSIRE, which is primarily composed of industrial and manufacturing systems labs that have a thin-level market. Whether it's a government contractor or a private biotech firm, you see more brilliant startups and great ideas happening everywhere. That's another good thing that I think has come out of this pandemic - innovation. However, no matter how innovative these guys are, they gotta have someplace to test their products, and we're seeing a massive uptick in their build and creation. 

Not bad considering the spot I'm in. If I had to guess, I'd say 60-70ish. Obviously it'll fluctuate depending on the week, but overall I'm very happy with it. I knew that I was never cut out for REIB or just IB in general, but knew that I wouldn't be working the 40 hour week when I entered this field. Like I mentioned in my previous post, I've filled my day with plenty of activities that I actually enjoy, and believe that it's essential to maintaining a healthy relationship with finance. I get the sentiment of wanting to be a machine and having work fill your life, but often see guys younger than me who are completely burned out by age 26, having no idea how to function in relationships outside of their work. 

I like to be in the office early - I can a) fuck around, and b) get a lot of things done without being distracted. I aim for 7a every day, but obviously it isn't always doable. I'd say primarily, I'm in no later than 7:45, no earlier than 6:45. Just depends if I'm able to fall asleep the night before, or if I'm feeling a workout before I head in. The good news about being in this early is that I can be out early too most days, and I take all the sunlight I can get. I'm a huge believer in being outside, and when the weather is warmer I seem to actually go in earlier since there's more sunlight in the afternoon. Kind of weird, but that's the mentality that gets me in so early!

Yep - the base/bonus ratio for the fiscal year 2020 was an odd stack, especially for us. They said it was something COVID-related (which makes no sense if anything guaranteed comp would be less), but I took it and went with it. My 1-ASO comp was split-rated in the more generic fashion - not quite the 50/50 like your offer was, but it was pushing more of a 60/40 gap. If my mental math is still fresh, my TC package is around a 70/30 split which is massive for this field. Can't speak for other firms here, but I know several of my colleagues got a similar ratio. 

To be honest, if I had to guess, it was more of a marketing technique designed to grapple those moving to CRP IX - I'm not sure if you've read anything about what we've done in the past two years, but Stuckey & Adams are more or less running this iteration with a different approach. I wish I could speak more to specifics, but honestly, your guess is as good as mine when comparing the TC spread index. As of right now, I believe the median comp for 2-ASO is around $250 all-in, so more or the less what I've made. Just a different spread. 

Congrats on your offer, and thanks for the question!

Not OP, but I did engineering undergrad, then work in construction and to get to development I got an MBA. Most developers usually value a finance background since ultimately the work you are doing is supporting a financial business model, especially for analysts/associates since at that level you're spending a lot of time in models. I came from construction and do project management work, but a developer wouldn't touch me until I got my MBA because I didn't have any finance knowledge. If you are dead set on development, then I'd recommend trying to get work for one or at a REPE shop, just learn all you can about the underwriting/dealmaking process, you won't need to learn construction in too much depth and you can pick up enough to be a decent developer from just working on the dev side without any GC experience. 

Hey - congrats on your RE/FIN major, wishing you the best of luck. 

Piggybacking off of what jarstar1 said, the MBA will help you greatly in the long run. I would highly advise you to not go into the construction route to get this kind of job, as it's not exactly what they're looking for. If you recall, I had to do the opposite - I was a construction guy, but added my RE minor and had to break my back with connections to get into the developer I worked for. Most of them won't touch you without any sort of finance experience, I was just lucky that I tacked on an RE minor at the end. That's what closed the deal for my first gig. 

I will say that construction allowed me to enter the field from a more holistic and different viewpoint. There were interviews I had where people straight-up asked me "you're not a finance guy, why should we let you work here?" and I had to think on my feet fast. In the first interview I had I was totally unprepared for this question and spit out some bullshit mumble about transition and lateral skills - yeah, didn't get that job. After that, however, I really thought about the question. The way I spun it was simple: they're a real estate group & they develop buildings. I come from a long four years of construction and operations management, a massive part in the building process. I can look at a building and understand how it's built: the materials used and their cost-benefit factors, the way site logistics are properly laid out, my over/under on if that thing falls down based on its concrete and stable core, etc. I said stuff like this and highlighted the fact that I could offer a unique viewpoint on the side of the real estate world. 

Granted, this got me into the developer role - this shit would not fly at any reputable REIT or REPE shop. I only got my initial REIT gig after my MBA, but that put me in a good spot overall that paved the way for where I am now. I had four years at a reputable construction undergrad, with two general contractor internships. I also had nearly three years in a full-time development role, building commercial complexes in one of the West Coast's biggest metropolitan areas, and lastly, I had a 'Public Ivy' MBA that sealed the top on finance. When you look at that stack, I'd like to think I looked pretty well-rounded from that POV. But I'm getting off-topic here. 

Point is, you're in a good spot for any LMM or MM Dev to scoop you up. I would not recommend switching to construction from this point - good luck! Big thanks to @\jarstar1 for his insights as well, I agree with everything he said. 

A tad bit tricky here for a couple of reasons, but I'll do my best. As you mentioned, every group and subgroup will have a different outlook on their job as a whole. A capital markets analyst working for different VPs will most likely tell you another story than an energy assets associate who has a whole different perspective on the job, may work different hours and tackles different sorts of problems throughout their DtD. I'll speak on what I know, but also gotta make sure that I'm speaking from a personal perspective, and obviously silly boilerplate here of yada yada yada these are my own personal opinions and do not reflect those of Carlyle Group, Inc. and their affiliates so I don't get burned - gotta cover.

As I mentioned in my previous post, my superiors have been receptive and understanding of my past. This is finance. It's fuckin' hard. You're gonna get yelled at, clients and coworkers are gonna take out their anger on you, you'll feel burned and unfairly treated at times. But it's cyclical, and it in no way compares to some of the stories I've heard. There are plenty of people I work with who I would love nothing more than to hit a quick 9-hole run with while drinking some beers, and there are people who most of the time I would greatly enjoy showing them my recent boxing improvements. The latter, however, is much more sparse than the former - which I am damn grateful for. As I said, I am not a finance macho hardo. I am not cut out for investment banking. At the risk of getting too personal, I suffered greatly in my early 20's from depression and anxiety, never really opening up with the exception of my family and close friends. I didn't know if someone like me could survive in a world like this, as my image of finance was painted 100% through TV shows and ill-represented preconceived depictions of constant pain and suffering. Simply put - this just ain't how it works, especially not where I'm at. 

I guess the best image I can give to you is an average day on the job. Since I don't have set hours I work, I'm not required to be in the office at any set time and I can leave pretty much whenever I want, as long as I don't have anywhere I have to be in-person for, like a meeting, site visit, client brief, or external discussion. Now I say these things, but don't think that I'm not in the office for a long time every day. This is driven by two things: one, I have a lot of fuckin' meetings. There are a lot of things I can access only in-office, which is primarily security-based for no other reason. For instance, a lot of Carlyle's portal is not accessible thru my personal laptop, and I usually have to be on a secure network to pull data and work in an efficient way. Being in the office just makes that a lot fuckin' easier. The other reason is just personal preference. I talked a bit about WFH earlier, and the truth is that I just HAVE to get out of my apartment sometimes. It's great occasionally to throw on some pajamas and get all comfy in my robe, but that's fun for about a week before you realize your life is confined to your living room, bedroom, and home office. 

I seem to enjoy getting off-topic, so I'll try to get back here: let's say I'm in the office at 7:30. Usually, the first 30 min or so is responding to emails, setting up some things in my calendar, and writing day-to-day and week-to-week immediate tasks in order of priority. I have this brown notebook that I've used to fill my days since 2017, and if I lost that notebook I think I'd go ballistic - it has everything! Non-client-facing and internal meetings primarily fill up my AM, which I head to for most of the morning while balancing my ongoing projects at my desk. While we don't have a "lunch break" per-say, I try to eat around 12:30 either at my desk or go out to this Chipotle nearby where every employee knows me by name now. External meetings fill my early and late afternoon, and it's just a time balance at that point - trying to get my own shit done while still meeting everyone I can. Some of my team's clients who I like the most and have broached a more personal-level relationship with come later in the evening - we may go for a drink, hit up the golf simulator, or just hang out and shoot the shit in the park. Those are my favorite parts of my job - hanging out with guys and gals worth nine figures in a more casual setting, while still being business-oriented is a great perk of finance. It's enjoyable to speak with someone on a personal level, and also you feel all super cool in shit in your Midtown Uniform while trying not to think about how much of a douchebag you sound like. I'm only half-kidding!

That's the general day. Throughout the day, I speak with probably an average of 75-150 people, whether they're coworkers, superiors, external people, clients themselves, client representatives, as well as general housekeeping things. I can't speak for the average culture of those outside my organization (and more or less my direct team), but I gotta say that I love the culture here. This isn't Midtown - there's a lot less slicked-back hair and vests here, and more Rhone pants and smiles. The douchebag culture is turned down significantly, and my direct superiors are mostly very nice and easily-approachable people. I won't attempt to shill Carlyle one way or the other, and as I said - I"m sure there are other people on this forum who work for my same firm, maybe even some in my same location who are scratching their heads wondering how I got so lucky. But I like it here. I like who I work with, I like my hours, I fuckin' love my pay (LOL, sorry I had to), and I like working for this team. It's not sunshine and rainbows, and we work hard as shit. But at least here, you get less of the "get 110% on every project no exceptions and even when you do I'll still be disappointed" spiel and more of the "we expect results and performance from you but when you get it we will appreciate you, and if you don't we're not gonna make your life miserable" which I greatly appreciate. I think in general the "Work Hard Play Hard" thing is cliche, but it really applies to me. 

Overall, I think you could probably tell from this wall of text that I fuckin' love who I work with. And I'm lucky that I'm in that position. Coming from my background when I thought I'd never make it brings a new sense of pride and enjoyment from that area also if that makes sense. Like you mentioned, I can PROBABLY guess why you're asking this question and want to let you know that I am more than happy to open a more private channel if you'd like to know more. Happy to help out in any way I can. 

Best of luck to you and hope to see you around these parts soon! Be well.

Thanks for the reply! Sorry, it's taken a bit. Have had to work a lot this week, and am answering when I can. To anyone else reading this, if you've asked a question & I haven't gotten back to you, just know that it'll come eventually - gotta prioritize my time. 

Anyways, the technical skills question is great. As you mentioned, my MBA did significantly help me pivot from a construction-oriented background to a more financial-related gig, but even before that, I felt that I had a good grasp of the real estate world specifically. My original role at the developer was my first toe-in-the-water experience at the financial side of things, as with the exception of maybe 2-3 finance classes at Virginia Tech I had ZERO financial experience. Those questions were hard then - for many of us, they may not seem like the hardest things but DAMN were they a shock to me at the time. Going from concrete to rebar QTO specifications to 7-cap leverage at 40% with cash-on-cash return while dealing 5% interest questions were not the easiest thing for a construction guy to grasp. 

For better or worse, someone literally leaked the interview questions for my exact position at the developer about a month before my interview. While I wasn't banking on being asked those exact questions (I figured that firm would shuffle them around pretty quickly once they found out), it did give me a much better insight into the things that I would have to nail while jumping into this space. I think a lot of guys in my undergrad are doing development now, but they had 4-5 years of GC Project Manager or Superintendent experience before either lateralling straight into development or having an MBA to help with the switch. I got lucky. I was able to get that gig straight out of undergrad, but it was a very hard learning curve for me. 

Technical skills for the REIT job were a lot easier. By then, I had two years of pure financially-based classes focusing solely on what I'd be asked later in that interview room, as well as three years doing financial underwriting and working with capital markets development teams. I knew a bit more about how the game was played and found that the technical skills were more of the less the exact same as my prior role, but with a more investment-based approach and less of an operations and site prep approach. I like the Calculus theory - 95% of people aren't going to use Calc for a second in their careers after final college class in it. So why do they teach it? They teach it because it's less about the CONTENT and more about testing individuals on how to apply the methods they use to come up with an individual answer - learning how to SET UP the equation, which buttons to push on the calculator, the right steps to take in the right order, and how to ultimately simplify and note the solution. It's the same thing with any technical skill here - the computers will do the grunt work, you just gotta know which buttons to press.

That's how it went from there on out. While I can't lie - private equity is a whole different side of the real estate world, it's more or less the exact same thing when it comes to technical skills and what is done in that field. The content is different. The equations are different. The numbers are different and they're applied in different ways. But it's still testing your competence, drive, problem-solving, and self-discipline skills. If you can figure that part out, you can go literally anywhere in finance. Just gotta know what to look for. 

You mentioned realistic tips needed to form a similar path - OBSERVE AND LISTEN TO WHAT OTHER PEOPLE DO. I did that in every aspect of climbing the ladder in the past, and do it today. Yes, there's the obvious path to cut through - polish your resume. Work on your people skills. Do LBO modeling and practice your IRR, NOI, equity multiple, etc. But if you really want to see what makes people successful in this field, you just gotta take mental notes on what others do and how they go about their process of winning in this game. I didn't come from the standard background, as I've mentioned - I swear half the people in finance think it's ALWAYS T10 Undergrad -> 2yrs IB -> Ivy MBA -> 2yrs PE -> HF/VC/CO. If you wanna see my route it was more like Random UG w/ Random Major -> 3yrs Development -> T25 MBA -> 3yrs REIT -> 3yrs REPE -> Death Soon and it just mixes and matches in so many different places. 

If you want to work in REPE, you'll work in REPE. It may not be the clear-cut path, and it damn sure won't be easy. It'll suck sometimes, and you'll wish you became a gym teacher, but in the end it's worth it. Plenty of ways to touch up on modeling skills, thousands of resources online!

Hey - 

First off, sorry for the delay. I do a fair bit of fucking around on this website but often forget I still got some folks that I gotta answer. My bad. Anyways, smaller shops are in a tighter spot here in regards to IR's volatility, and we share the same experiences with seeing deals get murked due to lack of financing. It sucks - it's no one's fault, but sometimes shops just can't keep up with what's going on at the moment. I have a couple of buddies who are at significantly higher positions at smaller shops who have felt this brunt the most. I dabbled with the idea of taking a VP position at a reputable regional LMM so I could get some of that sweet carry float, but ultimately am going to wait it out a bit here over at CG. 

I'm kind of straying here, but I just think the general environment of valuations right now is fucked. So much processing is involved in determining every last number so we can get a solidified bid out, only to find out that yada yada interest rate jumped on the multiple and now we gotta reevaluate. The capital flows are pretty variable in my market, so it's just a chain reaction of interbank lending leading directly to a reduced intrinsic value. Boom, property values are tanked and leverage is lost.

As you mentioned, we can afford these changes but I do feel for the guys at smaller shops who just don't have the capital allocation to make it worthwhile. Can definitely see LTVs having a rate in the future, but I'm healthily optimistic that we'll fight thru this curve. Could take a year, could take five, but Mr. Market is always right. Thanks for the question!

LOL, yeah that's technically us. From my prior post, however, I'm sure you can see that I'm not the stellar student that they make it out to be. I took the Carlyle gig in the first place due to my SVP being an all-around great guy. They're stringent in some rules that they have, but every candidate has some wiggle room. While my UVA GPA was a factor, I wouldn't say that it was the only reason that I was hired. My stack worked well - I had four years of construction target undergrad, three years of capital markets underwriting in LA at a reputable developer, a T20 MBA w/ a 3.1 GPA, and tied it all up w/ my REIT knowledge & performance in the same metro area as I'm in right now. 

Carlyle is pretty heavy on the front-end facing from a recruiting standpoint, they're intimidating to a degree. I can tell you undoubtedly that if you have a grad degree and they're judging you purely from a GPA standpoint, they won't even bother to request anything undergrad-related. It makes sense - why would they? My UG was a different sector far in the past, and it's just about getting in front of the right people so you're not dinged by the screener. All comes back to the big ole' N-E-T-W-O-R-K-I-N-G.

In addition, I do want to touch that a 3.5 may be a lot more heavily emphasized if you're applying straight out of school. At that point, all they really have to go off of is your academic performance which makes the GPA requirement a lot more concrete. For me, they primarily focused on my transition and performance in my full-time career and wanted to get a better understanding of how I'd laterally transfer my skills to make me worth the hire. I know that this may not apply to everyone, but that was my experience. Will ping a couple of buddies today at lunch and see if they can shed any insight on experiences - IIRC, one of my analysts is only a year out of his MBA. While he has a nice and cushy Columbia degree, his GPA was nothing to write home about (3.0-3.1?) and he had no connections that would have boosted that. So there's that, but he could be an anomaly. Will get back to you. 

Thanks for the question!

Yeah seriously. I really don't want to have to re-recruit after just 1.5 years as an associate but it appears to be mandatory for almost everyone there. Really tough considering they pay so much less than other 2-year programs.