Hi, I'm trying to get a better grasp on full-time recruiting for next year. I know that I would be prepared and qualified for an entry-level position at a BB bank doing balance sheet lending, but I don't know as much about recruiting for CMBS groups.
- Do conduit lending groups recruit straight from undergrad or do they hire starting at the associate level?
- Is it common to go from SA at a BB doing balance sheet lending to a full time position doing conduit lending? Can you go from working in balance sheet lending to CMBS after working full time in balance sheet lending?
- I have a list of all of the top conduit lenders for the past several years, but it is difficult to identify which specific groups at these companies originate the loans that are packaged into securities vs loans that stay on the balance sheet. Have you been able to identify more clearly which groups do provide different products?
If you can answer any of these questions I'd be very grateful. Thanks!
For the I-Banks, they'll get their analysts from the analyst pool, and often the summer intern analyst pool. As for the others, it depends on the shop. Most of the specialty finance (non-bank) conduit lenders don't have the time or resources to run on-campus recruiting, but may have analysts programs from referrals and such.
Post the list, I'll can tell you which have off the top my head which group securitizes and which may hold for balance sheet.
I looked at all of the CMBS originators with $1B+ in originations in one of the past two years, and used the average volume of the past two years as my ranking system. I'll type where the CMBS group seems to be within the company. Please let me know if any of this is incorrect.
The following had originations of $1B+ both years: 1. JP Morgan 2. Deutsche Bank 3. Goldman Sachs 4. Morgan Stanley 5. Citigroup -> Commercial Real Estate Group 6. Wells Fargo -> Corporate and Commercial Lending -> Financial Analyst Program -> Commercial Real Estate -> Real Estate Capital Markets 7. Bank of America -> Global Markets Direct Placement Analyst Program -> Global Markets Securitized Products -> Real Estate Structured Finance 8. Barclays -> Global Finance and Risk Solutions -> Commercial Mortgage Backed Securities 9. Credit Suisse -> Securitized Products Group -> Asset Finance -> Commercial Real Estate Finance 10. CCRE 11. UBS -> UBS Investment Bank -> US Real Estate Finance Group 12. Natixis -> Corporate and Investment Banking -> Structured Financing -> Real Estate Finance 13. Rialto Capital 14. Ladder Capital 15. Starwood Mortgage Capital 16. Jefferies LoanCore
The following had originations of $1B+ one of the past two years: 1. Benefit Street Partners 2. Societe Generale 3. CIBC
Make sure you're aiming for a shop that doesn't use a warehouse line to fund their lending since they're far more cyclical than a bank that uses it's own balance sheet to fund lending. CCRE uses a warehouse line since Cantor doesn't have a balance sheet, likewise with Ladder and a number of others.
Typically for BBs, you apply to the general CRE group that's listed and then you're placed into the balance sheet, CMBS, special sit groups based on need and/or your ranking.
The CRE group structures are VERY different throughout banks for some reason.
DB for example has it's CRE Group, which offers large loan, conduit, and balance sheet lending, where most large loans end up securitized, conduits are securitized but can be smaller, and balance sheet loans can be kept on the balance sheet or syndicated out with other banks. They also have a special situations group that can invest in certain positions. The REIB group sits on the same floor as well since they bring in a lot of the relationships each group depends on.
Wells has a CMBS group, Balance Sheet group, Securitization group, Securitization Execution group, REIB group, Eastdil (brokerage & REIT debt facilities), etc., while Citi has a RE Financing Group which actually just deals with REIT debt facilities, CMBS group, REIB group, and other balance sheet ones. Then you look at Morgan Stanley and they have the large loan group, REIB, CMBS, and a ton of contractors. DB, Barclays, and a few other banks have also recently shrunk their HQ CRE teams and pushed CMBS and lending work off to Situs/Hanover as well. These 3rd party firms offer the same RE services, but at a fraction of the cost. An analyst in CRE at DB might enter at the street base IB pay scale (85k), while an analyst at Situs might get 55k in NYC, providing the same function. The CRE groups have been a heavy target for cost cutting in that sense so I would make sure you try to find the right group if CMBS is what you really want to do.
Often the positions for FT analysts in CMBS are lumped together within the general "CRE" posting, but some banks have a distinctive job posting for CMBS FT Entry Level.
To answer your questions: 1) Yes, but the job posting may not specifically mention "Conduit Group" 2) The skills required are extremely similar between balance sheet and conduit lending (from the origination perspective). Securitization just has a few more steps involved and you need to market to investors. You can weave between them as you wish, but it'll likely be based on headcount needs your first few years. 3) LinkedIn descriptions can help you differentiate what people do at banks
Thank you for your detailed response. From my research I have definitely noticed that the CRE structure at banks vary much more than other sections of the bank.
How would you determine what the right group is? And to use Wells as an example, you would just apply to their FAP, be placed in Commercial Real Estate, and then hope to be placed in the group I want to be in? Is that how it would work or is there more I could do?
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