Can somebody provide a high level of the different functions of a Real Estate investment arm of an insurance company (such as PGIM RE)? I understand there are equity and debt functions, but what are typical institutional investors and how does the deal flow work? I guess I'm having a disconnect between these types of firms and a typical boutique private equity firm.
Thanks!
| +65 | PERE 100/200 | 10 | 19h |
| +18 | Quitting REPE - thoughts on pivoting out of CRE? | 2 | 21m |
| +16 | Acquisitions Experience Needed? | 7 | 2d |
| +13 | Hyper-scale Data Center Operator Analyst | 4 | 21h |
| Would You Buy an Empty Commercial Building or One With Existing Tenants? | 1 | 23h | |
| +10 | Blackstone RE AM? | 11 | 1d |
| +10 | Nuveen Associate Case Study | 6 | 1d |
| +10 | Life Time / Six Flags Real Estate Roles? | 6 | 21h |
| +9 | Cambridge MPhil Real Estate Finance: Are Graduates Still Staying in the UK? | 3 | 1d |
| +9 | Debt Originations Comp Structure? | 0 | 2h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
By asking how does deal flow work, are you asking what type of deals are they looking for? It depends on the institutional investor. PGIM may be looking at a core office building for their General Account, but may have a separate account, which they manage, which invests in development / value add deals. Deal flow will come through the door by way of the acquisition officers and than it will get screened / underwritten like any other deal. Deal flow will work like a PE firm, it may come off market, it may come from a broker, etc. Is this what you were asking?
Thanks pudding. Yes, makes sense, and what I was thinking. I'm currently interning at a small PE firm with a niche investment strategy. As I interview, just want to make sure I have fundamentals down.
Whats the connection with managing the LIfco's $ from premiums and the deal. Is this simply just where they derive their owner stake in the deal? How interconnected in the $ sitting from premiums and the dollars thrown into RE investment strategies (sorry for lack of industry terminology)?
Life Company's will take the premiums they sell from selling insurance policies and invest them. For example, if they have $100 to invest, 5% may go to equities, 5% debt, 3% real estate, etc. The money is interconnected in the sense that the premiums which eventually get invested, a certain percent are allocated to real estate.
Insurance RE Investment analyst (Originally Posted: 06/20/2011)
. [edited for privacy]
To address your concerns: 1. I was wondering if RE within an insurance company is the same as RE PE?
Same skillset, but the deals you work on will be more conservative and therefore more boring. Regardless, people often go from one to the other.
I think it'd be respected as solid experience but wouldn't put you in the same tier as the applicants from the Blackstones of the world. Just my opinion.
RE at an insurance company is similar to RE PE in so far as at both places you will develop skills related to how to analyze potential acquisitions. Where the BIG difference is lies in the type of RE strategy the firms take. Insurance companies invest in "core" RE, while RE PE invests in "value-added" and " opportunistic” RE. I recommend reading up on these terms, but basically there are four types of RE investments (besides land, which can fall under opportunistic). From least return/least risk to high return/most risk - core, core plus, value-added, opportunistic.
Core strategies are those that have a stable yield. Think of a high rise office building in a CBD (central business district) with 95% occupancy rates, great tenants with high credit ratings, etc. On the other end of the spectrum, an example of an opportunistic strategy is a retail shopping center with low occupancy, no anchor tenant (think of a large retailer such as a Best Buy) and is in an emerging market. The job of the investor is to team with developers to bring in an anchor tenant, increase occupancy rates and invest in extensive tenant improvements.
Hope this helps.
Nihil mollitia nam deleniti reiciendis explicabo dolorum. Aut a ut et esse vitae. Occaecati et eaque ut et aut minus reiciendis. Quas rem esse quis molestiae qui. Labore atque aliquam non ipsam.
Ad quisquam id aut velit. Rerum blanditiis beatae ab ducimus quod eum molestias ea. Sapiente quis et deserunt saepe. Quia beatae reprehenderit maxime itaque rerum eaque.
Facere est tempora ut modi eligendi facere ut. Optio unde delectus aspernatur ipsum eum perspiciatis. Corporis ut rerum voluptatem unde illo distinctio. Deleniti dolores distinctio impedit labore. Sequi incidunt quo inventore cumque voluptate. Libero dolor qui quis quam sit dolorum labore. Doloribus dignissimos nihil minima est.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...