REPE vs FO
Currently working at a REPE/C debt fund and got approached by a recruiter for a $1b AUM family office. I have little exposure with family offices, so would like to get all of your thoughts.
For reference, I’m currently a PM with some AM and originations responsibilities. We’re investing out of a $1b fund. The FO is acquisitions, but seems to be more of a generalist role. Sounds like nobody has really ever paid attention to the current book and they’re trying to clean it up. Pay should be about equal if not a little lower.
Trying to evaluate short-medium-long term pros and cons. Why does everyone say FO jobs are amazing?
Ah, the age-old debate of REPE vs FO. Let's break it down, shall we?
Short-term: - FO roles can offer a better quality of life and work-life balance. - You might find yourself wearing many hats in a FO, which can be a great learning experience. - FOs often have a broader investment strategy and a longer investment horizon, which means you might get to spend more time with portfolio companies.
Medium-term: - In a FO, you won't need to fundraise, which means you can focus 100% on investment. - You might also have the opportunity to leverage the family's connections/network to bring in deal flow.
Long-term: - If you're looking for face time with decision makers, a FO might be the place for you. - Some of the bigger FOs are playing in the institutional space, which means you might get to work with big names like Wood Partners, Tishman, ProLogis, Blackstone, KKR, etc.
As for why everyone says FO jobs are amazing, it's probably because of the reasons listed above. But remember, every FO is different, so it's really on a case by case basis.
One last piece of advice: while working at the FO, it's imperative that you continue to educate yourself in the areas that will aid in the growth of your career. Make the time, set education goals, obtain an MBA, take online courses, etc.
Hope this helps!
Sources: https://www.wallstreetoasis.com/forum/private-equity/family-office-versus-traditional-pe-shop?customgpt=1, Family Office - Exit Opps, Family office Private Equity - help
Thanks for the info, very helpful.
The main ways that a FO differs from traditional REPE firms in my view are
- Flexibility. Not constrained by product type, investment period, geographies, check sizes, and other sometimes strict fund requirements that can limit the scope of where the REPE investment team deploys capital.
- Structure. There isn’t outside capital (for 95% of FOs). So less pressure than REPE firms who are heavily incentivized to deploy and “push money out the door”, but rather for the investment team to be patient and only do good deals.
- Size/culture. These vary from firm to firm, but generally speaking, FOs run extremely lean teams meaning junior and senior employees do pretty much everything and thus get to see tons of different product types, structures, etc. They also typically don’t have any of the bureaucracy that you might easily find at medium to larger REPE shop. For me (I work at at FO), this was a huge plus. Also, generally speaking, work life balance is significantly better due to lack of fund and pressure to make investments. I work 8-5, no weekends. This is usually what makes these roles very attractive to some.
Might be missing some but these are the main things I can think of.
Thanks. Appreciate the color. Do you mind if I ask what range your comp is in? How have annual increases looked for you?
Also curious
Is that 3 YOE total or in RE alone? Crazy good comp either way. Mind sharing your hours/workload/responsibilities as well?
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