What exactly is a portfolio management analyst?
Title says it all. I've seen a few large funds have openings for a portfolio management analyst/associate positions (real estate related). Curious as to what the responsibilities of someone in this type of team would do. Is it more strategic allocation of capital into types of assets, markets, risk, and even joint-venturing with smaller local firms, or is it asset level work. What are typical exit ops / career paths for people starting out in this role? Thanks.
The answer to this really depends on the nature of the investments made and the structure of the firm. Not all groups are split in to acquisitions and asset management, some are just broadly "portfolio management" for a given fund/strategy (individuals may sub-specialize in role/function, but the analysts won't be hired as such). This will be more common on funds/strategies making debt investments or LP investments, but the term could applied to traditional direct real estate portfolios.
In sum, without really knowing the exact firm and then even fund/strategy, it's really difficult to generalize. But, the "analyst" role is somewhat universal in that you will be doing the base/grunt work for the team on which you sit.
Portfolio manager here at a 25B AUM REPE firm with 10 YE. PM Analyst job really is to support their portfolio managers. Task can vary greatly and ranges from:
- Building/updating portfolio level models to project promotes/incentives for certain cash events (New acquisitions, JV developments/buyouts, dispositions etc..)
- At certain firms, it includes several business development/fund raising activities - hence includes, doing pitch books, fund raising docs (DDQs, PPMs, etc...), answering investors inquiries
- Working with portfolio managers to analyze key strategic acquisitions/disposition/reno capex spending decisions. Essentially being the questioner of deals the acquisitions teams are bringing to the fund.
- Relationship retention. You'll be expected to go on and present at annual investor meetings / conferences at some point so make sure you are have the social skills to succeed on that front.
- Monthly/quarterly reporting for investors.
- Some firms marry some asset management functions and have PM analysts support some asset managers. So you will also have typical AM duties: budgeting, valuations, renovations management etc...
- To simply answer your question, you're usually flying at 10,000 feet in PM but can dive deep into asset level when need be...
Exit ops really vary. Ideally, it'd be to become the portfolio manager one day. Seen folks transfer to work in acquisitions at my firm. Lot of questions been asked regarding Acquisitions or Portfolio Management. It all comes down to personality fit, which you tend to figure out as you traverse your 20s. At a junior level, both sides are grunt work. At a more senior level, Acq becomes a sales job and PM is client retention/business development. Pay is the same. It all comes down to your personality and what you like....
I came from acq and ended staying in PM, then got promoted to portfolio manager role. I enjoy it on this side. I feel as though its a bit less sales-y and more intellectually gratifying. We have lots of questions, sometimes challenging and educational, from investors and I find it enjoyable to rely on my finance education back in college/MBA to answer - question such as asset allocation that requires you to use MPT to answer for example, or as simple as educating investors on which market/submarket is "hot". I love the deals side (as most RE guys are), but it is nice to be able to look at potential deals from 10,000 feet and not being in the weeds underwriting income/expenses or to just push the deals through IC even if you yourself aren't so hot about it. But hey I can't speak for everyone, just my two cents. Feel free to PM if you have specific questions!
Hey PM in RE, I would love to PM you regarding how to approach a move into the PM team of a REPE firm. I’m currently working in the finance department of a REPE working with portfolio companies on IFRS reporting, FP&A and onboarding but would love to work in a strategic capacity involved with bolt on acquisitions, financing/refinancing and restructuring . I’m from an accounting background but really enjoy working with c-suite and senior management of portfolio companies!
Hi there, can you tell me what kind of technical questions are generally asked in a interview for a PM role?
PM of a ~$10B owner/operator. Our department oversees the following; Quarterly NAV updates, fund level credit facilities, liaison with LPs and subsequently informing acquisitions strategy & portfolio geographic/asset class concentration, providing LPs with monthly update packages detailing major portfolio risks or events, setting fund level goals and measuring performance against them, keeping the acquisitions fellas in check when they want to jam a deal through that they've managed to make pencil on paper but is realistically not something our investors want in their fund, signing off on new acquisitions or dispositions, tracking GP/LP capital balance, making sure our AM team and Acquisitions teams are in-sync (ie, if we buy a property and it struggles to lease-up we need to make sure we understand the lack of tenant interest and our acquisitions team doesn't make the same mistake twice) and setting/readjusting deployment goals bi-annually. Probably forgetting a couple of items but I'd say that's the bulk of it.
Probably some honkey with a fancy title that got below a 3.0 GPA in undergrad and tells everyone he works on the buy side TBH.
Our company has a PM and his work is detrimental to the work of the entire corporate machine that we are. Comments above mine already explained what a PM is. I just want to say that a PM is one of the most important cogs in this mechanism. Our company also uses a Self Managed Super Fund https://wvpc.com.au/services/self-managed-super-funds-smsf/. It is also very helpful and of course one of the most important aspects of our company. Many people underestimate their importance because they don’t really know what they are even talking about. Would recommend everyone read on these topics, it is very interesting.
Detrimental?
I love these kinds of translations people do, my dad sometimes mistranslates things.
What’s a typical career path progression to become a PM?
Woah, I had no idea how important PMs are! I also never heard about SMSF. Guess it's time to start reading lol.
PM position at my old firm probably overlapped like 50%+ with AM duties, but PM had a finance/investment background whereas AM was more project management / construction background people, and so PM would help contextualize AM decisions around return projections and whatnot. PM was also the primary contact for JV partners and other outside investors, would take the lead on creating quarterly reports, and basically served as the investor relations department.
Is that a common split of duties? PM/AM in my previous roles have been the same function.
PM is a great field to be in, however, most actual PMs don’t just climb the ladder from a PM Analyst to a PM. Many start in different RE/Finance functions like Acquisitions, AM, etc. and then go over to PM.
PM is great field to start in early in your career, but just be aware that a lot of the functions early on are heavy client reporting.
is this generally a good or bad thing re: reporting?
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