Thoughts on joining an early-stage REPE fund
Hey all - quick question here. I come from an NYC BB M&A background, spent around 2 years an analyst but have always been interested in REPE. I took some time off after completing my stint and have recently received a few offers to do REPE. I'm deciding between a few offers and one of them is a very small (~4 founders, all with decades of experience in the space) firm that I leveraged my alumni network to get an introduction with. They are very active and I'm leaning towards this as I think it would be great to have extensive deal experience and upside potential but was wondering what the broader community thinks. There are obviously risks but I think my risk-reward appetite is higher right now than it would be say 5-10 years down the line.
The most important thing is if they have a stable capital base eg. do they have a fund that they’ve raised?
From what I understand (and I'm going down to meet them in-person soon), they are investing from their own money and have not yet raised institutional capital. Does this change the risk-profile significantly?
It's a great point, but maybe not significantly. A strong capital base means the firm is able to scale in the future and diversify its real estate holdings a bit easier. (i.e. invest in different geographies, asset classes, etc.)
Their success will live and die by their ability to raise money.
No advice for you unfortunately, but I'm curious what you'd be doing in your role at that firm? So they have any analysts/associates? Would you be doing some sourcing as well as a lot of the admin/analyst work?
Yeah definitely: 1) handling the modeling and due diligence for potential new acquisitions 2) asset management of existing investments 3) maybe some travel and working with operating partners as necessary for value add opportunities 4) whatever else (admin, project management) needs to happen to support a small but growing firm
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