Value of Top M-B-A in Real Estate (Principal Side)
Hi guys,
Assuming I have a top masters in finance (eg Oxford), and working in RE investments - VP position, will a top M-B-A eg from Stanford MSx, Kellogg 1 year or Columbia J term significantly value add in areas of adding cachet, credibility and a shot at megafund REPE Senior Management roles?
Pros: Network and change of geography to NYC, additional branding / credibility, network (esp for RE focussed schools like Columbia)
Cons: 1 year opportunity cost, cost of M-B-A
It’s two years opportunity cost and $250k tuition. Most MBAs in real estate these days are career changers. Back in the day it was standard practice to do IB->RE->MBA but that has kind of gone away I’ve noticed.
People who work at the top funds as associates tend to continue working at that fund or lateral to another. Just look around on LinkedIn or at the younger leaders of top funds.
It’s very generational. Successful businessmen in their 60s-80s today tend to have JDs. Back in their day, JD was the prestigious degree (MBA was new and not prevalent yet). Guys in their 40s and 50s - it was the MBA. Guys in their 20s and 30s - it’s mostly career changers (used to do accounting and now want to do investments, used to corp PE but now want to do RE), people looking to level up (they work at a tiny local developer but they want to do REIB at Goldman), and people who work at sleepy insurance companies / asset managers that might pay for the degree (think pru, aig, whatever). Guys in their 20s and 30s who don’t fall into those brackets probably have rich parents and don’t mind the opportunity cost.
And for the previous paragraph, I’m talking about real estate only. MBA still seems common among military people, consultants, and PE/VC types
There are certainly a few of the top tier RE firms that primary look for MBA programs to hire from, but in general you don't need one for RE
Work for a reputable firm who has historically hired post-MBA associates. It may be narcissism, lack of awareness, dearth of diligence, but our summer associates have not panned out. A buddy of mine at another top-firm that hires MBA’s has also mentioned horror stories of what he’s seen. Have been told multiple times that the MBA is not required to progress and there’s a clear path to growth. The MBA makes sense as a pivot, but not if you’re at a strong shop already.
Opportunity cost is overrated. Enjoy your life... you live once. We're all going to live to 100 anyhow.
Did an MBA, was great.
If OP sees an MBA as a chance to take a break, travel, network, meet new friends, then I agree with you. But it sounds like he’s only concerned with career advancement - two different scenarios
Thanks for your perspectives guys
To clarify - I am particularly looking at top 1 year or truncated programs eg INSEAD, Kellogg 1 Year, Stanford MSx or maybe MIT Sloan Fellows
Conscious of the divergence between gaining real world RE experience (which in many ways is very valuable - the schools dont teach these things in detail) vs a top 1 year MBA program
1) M-B-A is a life experience / dream, with additional career insulation. 1 year might justify the opp cost.
2) The opp cost is higher (since i'm already in a senior role in a large RE fund), but thinking the additional cachet, network and leadership skills may come in handy should I strike it off on my own later
If you're already in a senior role then an MBA isn't going to provide much value for you. The idea that you'll gain a better network or leadership skills back in school versus in a senior industry role is laughable - MBAs have the biggest value for people in early stages of their career who want another check mark on their resume to jump up another level.
If you want to have fun and travel and learn a little bit that isn't core to your job, go ahead! I doubt it'll hurt you, and if you're in a senior role right now it's very likely you'll be able to jump back into a similar role when you're done. Lets just all be honest with ourselves about what an MBA signals in real estate - not much at all
Looking to hear more comments, particularly from senior / veterans in this industry (RE Investments / REPE etc)
bump
If you're already in a VP position in an investments role at a credible shop it is probably not going to be worth the cost unless you REALLY want to go work at a megafund.
If you already have a recognized MSF degree working in the industry with some level above junior responsibility, I don't really see the value of a top MBA unless you really want to "reset" everything and take a job you might get via MBA recruiting. Sure, value from network is legit, but given that you are in the industry, I'd think your actual track record, experience, expertise will matter tons more in "senior mngt" recruiting than pedigree (tbh, that really matters most for first job out recruiting, its value falls relatively fast once actual experience/track record is at play).
Will note, you may get different views from an actual "insider" at a megafund, but my generic understanding (which is somewhat influenced by what I read on WSO tbh), is that those firms recruit from each other, and getting an extra degree will probably knock you down to 'MBA hire' potentially.
That said, an "executive" MBA (i.e. for senior people, not full-time, like the evenings or weekends version) may add value (I'm speculating, something to research, but that is the idea of those). But the recruiting for the full-time programs will be focused on Associate roles. Senior level recruiting factors a lot more than degree (and frankly I'd think your MSF would 'check the box'), and generally does not scan for recent MBA grads (and signaling as one may actually hurt you in that regard).
Final note, I see you are maybe looking to use this as way to move to NYC, not sure if that involves changing countries or what, but I'd agree that using grad programs to "move" is a legit strategy, but not sure if it makes sense for you in context.
I got my MBA from a top 5 program. At the time I was already working for a Upper MM REPE firm, but I knew there was a real cap on what I could achieve there. Getting my MBA was great for a few reasons. You are exposed to a large number of hard working and smart people who are all fairly career driven. The networking aspect of a MBA might be the most valuable, and it's hard to replicate without participating in the program. The general branding and reputation of the programs certainly opens doors that aren't available or are more difficult to access if you didn't get your MBA. My current position would not have been an option for me if I had not pursued an MBA. Finally, no matter how much of a generalist you might be, you end up doing and looking at the same things at your job. The MBA provided me exposure to a lot of different niches in the RE space (debt funds, CMBS, restructuring, new property types, etc.), which makes me a much more well rounded professional. It has been immensely helpful as I can see opportunities and problems from new viewpoints and with new skillsets and connections.
Plenty of people can advance without an MBA, but I believe it helped me immensely. My former employer paid for my MBA so I didn't have to worry as much about the opportunity cost. I know some of my classmates felt the MBA was a waste of their time and money, but like most things in life you get out of it what you put in.
Since you did a FT program and your employer paid, did you have an agreement where you had to go back to work for them for X number of years for them to recapture their investment into you?
Yes, although I left before that full period of time was up. I had to write them a check when I left, but I would still make the same decision today. I had already amortized through a good portion of the total cost, so it wasn't terribly painful.
I’ll add on since I also graduated from a top 5 MBA and worked in RE prior to enrolling. Despite not being a career switcher, I still found the experience to be incredibly valuable. Financially, I more than doubled my comp pre-MBA, and am now at a company/role I can see myself growing in long-term. I also found the coursework to be very helpful and gained a lot from the classroom experience. MBA gives you a well-rounded skillset and it's made my understanding of how companies operate, outside of my small area of responsibility, much more robust. Ultimately though, the biggest benefit was the network - having the ability to pick up the phone and contact any one of my friends working across the country at top companies is incredibly valuable.
The correct decision will ultimately depend on your career goals, but if you're accepted into a top program, I would seriously consider it.
Did you pick a RE concentration or a school known for RE? Contemplating this decision as well, looking at MBA + MSRED combo.
My program did offer RE classes, but I was less focused on that since I was coming from an institutional background and already had a solid foundation in RE finance. If I was attempting to switch into RE, I can see why that would be important, but even programs without a concentration will still usually have some RE classes.
Frankly, I’m not sure what an MBA + MSRED combo gets you. I would pick one and save the extra time/money of doing the dual degree.
Thanks guys - very useful and helpful perspectives.
I have been researching on this topic extensively - tend to see this "segregation" of opinions - people who have attended a top MBA will highly recommend it for the intangibles such as the network and other tangibles like the education and experiential learning, whilst people on the fence may weigh other factors - ie value industry expertise and track record more
I'd concur that senior level recruiting, especially for real estate - is 85%+ track record (ie record of leading teams, closing funds and underwriting deals), rarely was education talked about during the interviews (even after graduating from Oxford, although the prestige helped).
Guess its what you make of it - Happy New Year.
A known MSRE (in a major re business center) with relevant work experience may get you where you want to go at 50% of the cost. Noting, RE is extremely local in terms of network and alumni.
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