MBA: Fantasy vs Reality
MBA Advice/Question:
I asked a similar question in the RE forum but I think this is a better place for it.
I'm looking to transition from RE to IB/PE and I was recently accepted into Columbia's full time MBA program. I have about 5 years of excellent experience in real estate investment banking and buy side acquisitions. I've run transactions, originated clients, sourced deals, etc. Through my experience I've really learned to enjoy advising on capital structure, cash flow valuations, running deals, etc.
Yet, I feel that what I'm doing and RE has become stale. I work in middle market REPE based in a secondary market and the RE space is so competitive right now we are not winning deals. I know I need to transition to a more sophisticated operating environment/culture. Moreover, the best deals I've seen are all about your basis: the great CRE operators/sponsors I know all sit on their hands for years until the market adjusts and they go on a 3-4 year tear.
In the long run, I don't want to be tied just to RE but have to flexibility to explore other operating business while credit cycles fluctuate. Right now, my background and financial acumen is heavily weighted towards RE but I know there is a lot more out there I can do. My background wasn't initially in finance but in completely unrelated field (this is why I believe I was accepted). Now that I've spent a few years heavily in M&A and finance, I can see how cash flow analytics can be applied not just to real estate, but any operating business.
My thinking is the MBA, particularly at Columbia, has a fantastic academic program in finance, credit, capital structures, and value investing. I can get out of my small-town market and into a major metropolis, expand my network, and gain the skill set academically as well as professionally with an internship. I'd like to transition into a capital allocator role on the buy side or on an M&A advisory role (but not necessarily in real estate). Best comes to best, I can transition into a totally different realm of finance, learn a new repertoire and skill set, add prestige to my resume (for what its worth), and expand my global network. Worst comes to worst, if I don't like my summer experience at a BB or PE shop and want to go back into CRE, I have the experience already, an M7 MBA, and access to a brand new network in a major metropolis so I'm confident I can find a job. I am older though (~30) and have to fork out the money and time (I can afford it and I'm single).
Has anyone else transitioned from RE to PE/IB via the MBA? I'd like thoughts/opinions. Am I trading a cushy path that I've already accelerated quite a bit on for a hard road and brutal hours? Finance, capital structure advisory, and deal sourcing are really fascinating for me and RE has just become boring and I can see many possibilities for a true capital structure expert not just in real estate, but in an M&A advisory role or as a sponsor for other businesses. Perhaps besides asking for opinions on an MBA I should also be asking what do post-MBA roles look like in IB/PE or other capital allocator roles? How difficult is the transition from REPE to IB/PE?
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It’s doable, but you’ll find that your previous experience has a certain degree of gravity to it. So even as you try to make the transition from real estate to non-real estate opportunities, people will still see you primarily as a real estate person. The best way to make a shift away from real estate is to try to get a pre-MBA summer internship in a non-real estate investment banking role. That might mean working for a small shop, or a boutique, where you have some friend or Columbia alumnus who is willing to give you a shot. That will make transitioning toNon-real estate roles easier later
From what I understand, it's not that difficult to pivot into IB covering an industry that isn't your pre-MBA industry. Can't comment on buy side but imagine it's more difficult.
I was exploring post-MBA IB for a bit, and spoke to a number of students and alums (from CBS and other M7 programs), who said networking and having a good story for why IB/why the specific group you're targeting is the most important piece. Don't think I'll end up pursuing it after all but thought it was helpful to know. I think having worked in a role (RE) that is "finance-y" won't hurt you.
Nothing else to add but FWIW I'm also an incoming MBA at Columbia this fall - see you on campus (hopefully).
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