RE/IB switch
Hello monkeys,
I am looking to pivot so I was wondered if any of you has regrets for going to RE after IB as I am still hesitating.
RE sounds appealing because of the entrepreneurial spirit and also because it's easier to go on your own but regarding IB, dealing with companies sounds more interesting as they are more complex and diverse but culture is tougher and it's harder to break into PE than REPE.
Any advice?
Thanks!
I worked in IB (although in the real estate group) and couldn’t have been happier to leave for a RE fund. Keep in mind that the big institutional funds in RE aren’t that different from big institutional funds in PE. If you want to go entrepreneurial, you have to go to a smaller firm / GP
Also why would you care if something is hard to break into? Once you’re have 6 months of IB experience, it’s not hard to move to any investment bank. IB is basically hard to get into straight out of college and that’s it
Thanks.
Sorry, I meant the move IB -> PE is harder.
May I ask why you are happier now?
Transitioned from MM IB to REPE at a larger institutional LP and now at a GP with institutional capital flows. It's been an incredibly positive experience. The team is lean and have taken up outsized responsibility and exposure internally/externally. Culture is great. Total comp (salary/bonus/carried interest) has taken me over IB. Best decision I have made.
Thank you!
Why did you choose REPE instead of PE and what kind of deal your company is mostly doing?
Without getting into granular detail, I was in a coverage group for an industry characterized by higher multiples so not much current earnings and cash flow so traditional PE/VC within the industry wasn't of any interest to me. Plus, go to the PE forum and you'll notice it's the more or less the same as IB at the junior level. IMO, REPE (on a relative level and not at the major MF/LPs) is much more fundamental, less institutionalized, and more irrational (alpha generation), all of which fit my criteria.
Do you mind sharing your comp progression?
Don't want to outlay specifics, but to give some direction of the upside mentioned, equity contribution is five to six figures with a 2-5x equity multiple over a value add/opportunistic hold period (24-48 months).
I was in MM IB, followed by development and now REPE. I love RE, it’s still an extremely inefficient asset class relative to PE and has a lot more opportunity for those who want to go out on their own. Don’t stay in IB because the culture is tougher (how is this a positive?) and don’t go PE because it’s harder to break into, few outside of the WSO echo chamber will give a shit if you work in either.
Think through what you want to actually do, the compensation is good enough in all 3 to live an extremely comfortable life. They are 3 different roles all with their positives and negatives, give it some proper thought as to which route really appeals to you.
Thanks.
Did you love RE before making the transition to development?
May I ask why you didn't stay there and why did you choose this industry over PE?
Indeed, it's an inefficient asset so there is a lot to do.
Sorry, I didn't mean a tougher culture is positive... I meant the opposite.
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