Hey guys,
A an old buddy of mine asked me a question to which I don't know the answer and the search function hasn't really given me a solid answer, either. So here it goes:
What could a first year buyside RE analyst expect to make in base salary? Firm has ~20bb+ in AUM and does not specialize in RE.
If it makes any difference, the firm is located in a relatively low cost of living city. If any other details are needed I can probably get them from my buddy.
Thanks for the help.
I find size is not generally a good metric for differentiating pay tiers in real estate. REITs, life insurance companies, and large core fund managers often have some of the largest portfolios and investable capital, but pay relatively little compared to "high finance" (potentially five figures for an analyst/associate). Some (but not all) rather small opportunistic funds, on the other hand, will pay competitively with larger private equity funds and investment banking ($200K+ for an analyst/associate).
Frankly, I often find that the best way to guess at how well a firm pays is to look at the pedigree of the junior staff. If they have a deep bench of ex-bankers from top firms, prior private equity experience, and degrees from target schools, then there's a good chance that company is paying money competitive with IB/PE. For an analyst straight out of college, that means at least ~$120K of all-in comp. For an associate with a couple years of related experience, that's at least ~$200K of all-in comp.
I would cut my compensation guidance in half for firms that are less discriminating in hiring practices.
Great. But I've seen repe firm that hires both ex-bankers and fresh graduates. The comp difference is almost three times. Really depends on what you can bring to the table.
Just curious, what is considered a small opportunity fund? $500MM for recent fund (disregarding AUM)?
I think $500mm is probably where I'd draw the line for a mid-sized fund. I've seen smaller funds ($150-300mm) that still pay reasonably well. A lot of times these smaller funds are backed by some larger entity that is trying to scale a real estate platform since it's hard to fund a lot of compensation overhead without a lot of fee-generating assets.
I feel like the comp will be dependent on the AUM dedicated to RE and/or how much they've raised for purely RE acquisitions. If you say their focus is not on RE, I figure that they would have ~$1B in AUM. Comp for first years will be standard $70-80K base, and you can expect 50% bonus (but tough to get double.) Associates are in line w/ what re-ib-ny said, all in of $200K first year from $500-$1B firm is normal.
You typically don't get carry as an analyst, same with associate in some cases.
I agree w/ re-ib-ny in that it matters more what focus and sector they focus on. Once again, a lot of factors to consider given the amount of info we have.
The answers so far have been good. For a rule of thumb (for $ comp): vanilla acquisitions large fund REIT REPE. Strategy more than anything usually determines comp. The further you move away from core usually means more money (with the exception of development).
Thanks guys-- SB'd
It looks like it's a vanilla acquisition fund, but there is very little information regarding the firm's strategies/AUM split or employees on the website. And a linkedin search doesn't really shed much more light.
But, thanks again-- much appreciated.
I think $500 million is more of a mid-sized firm. $300-$800 is mid sized, and over $800 is large in my mind.
I agree that the best place to judge comp would be the pedigree of junior people. If they're from targets and have experience in IBD they'll only be there if they get paid. Another thing to look at is, if it's a fund manager, the level of risk they tend to take. Opportunistic firms will typically pay more than core funds, and so forth.
I think 125k-200k sounds high, but it is really dependent on so many factors that it is hard to tell. Either way, "more than sell side analysts" (I.e. me) is the correct answer :p
Hah, fair. Although they're still bankers. I work for a brokerage
I work with a couple guys who did Eastdil Investment Sales (property/portfolio level brokerage) who had hours/comp similar to IB. Sweatshop city.
So aside from being a RE entrepreneur/working for yourself:
Are there reasonably obtainable (non-brokerage) positions in Real Estate firms that allow one to make $500k and up like some analysts at Hedge Funds, or traditional Investment Banking associates/directors?
And if so, what (and where) are those RE positions?
Sure. Associates (not common), VPs (sometimes), and Partners (yes) that receive carry in value-add/opportunity fund projects can make those numbers on a single deal. For example, Spear St. just crushed it with their office development in Seattle (triple digit IRR would be my guess). I don't know specifics for how it was split across their team though
LOL at these ridiculous answers. And I mean these answers are fucking retarded.
A large fund in a low cost of living city is probably paying 1st year analysts about $45,000 to $50,000 MAYBE with a bonus of 10%.
The people who gave these answers should literally be shot for their ridiculousness.
The funds and "analyst" positions we are talking about are not first year out of college. Bostone's comment referred to hedge fund analysts, a title people with 10 years of experience can hold. A REPE associate (3 years+ in the industry) can make 80-120k base (high cost of living city) with bonuses ranging all over the place depending on the fund.
I have it confirmed that a couple pre-MBA real estate guys who just joined Oaktree are making 250-300k in their 1st year there.
Oaktree is definitely going to be the exception in this industry, not the rule. I would also expect those guys came out of investment banking analyst stints with top RE groups, so they've got a different salary trajectory than the rest of us schlubs.
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