Private Equity vs Public Equity vs Private Debt vs Public Debt

I am interviewing for a fairly large AM firm within the real estate arm. Within the real estate arm, all 4 of the above groups are included. I understand the differences between each of them, but I can't tell which one's are better in terms of career growth.

For example, if I was a new grad who wanted to gain the best experience possible, which group should I go for? Which group would be the best for my real estate career? I know private equity is popular, but how about private debt?

Appreciate the insight.

Real Estate Modeling Course

  • Real-life RE Modeling Tests from actual Interviews
  • Various asset classes including multi-family, commercial and more
  • Huge discount - until more tests and cases added

Comments (7)

Apr 30, 2021 - 11:25am

What do you want to do in the long run? What interests you more, lending or taking ownership in the assets?

All of these have great career prospects but the long term outlook is likely different from a debt vs equity perspective. If you're interested in lending, go the debt route (personally I would go private debt if I was on the debt side, typically higher risk and more interesting deals - distressed debt is a very interesting field IMO, but I'm on the equity side). If you're interested in buying assets, then go equity.

I'm biased towards private on either side as there tends to be an appetite for higher risk, more interesting deals.

May 1, 2021 - 9:54pm

Yeah not sure if that was a sarcastic response or not but so many people on this forum are so blindly focused on this concept of prestige they forget to think about what they're actually interested in.

Lending and direct investing are totally different professions as is a career in public markets. They're different career paths and shouldn't be compared apples to apples.

May 1, 2021 - 1:58pm

Ignoring your preferences for a minute, I think private has a brighter future. More dollars being allocated and you're learning a skill (the process/deal side) not just pure analysis. Plus relationships really matter there, which means as you grow your network and relationships, you increase your value. That doesn't matter nearly as much in publics where you can operate largely independently. (Some people say they love the hyper competitive element of publics - I def don't feel that way. Competition is good for the consumers not for the competitors).

also there's something to be said for actually DOING something vs betting on something to happen 

Learn More

300+ video lessons across 6 modeling courses taught by elite practitioners at the top investment banks and private equity funds -- Excel Modeling -- Financial Statement Modeling -- M&A Modeling -- LBO Modeling -- DCF and Valuation Modeling -- ALL INCLUDED + 2 Huge Bonuses.

Learn more
May 1, 2021 - 3:14pm

So I am imagining you are interviewing with a firm like Blackrock or PGIM, or at least in that scale and operating a "supermarket" approach to investment strategies and product offerings. 

If you are brand new without any real preference, then I can't say it much matters, all have legit career paths. 

On relative basis.... Private is larger (more assets = more firms = more jobs) than public (which really means REITs and CMBS I'd guess). Private is also more "direct" investing where the others are probably just fund managing and trading securities. If that gives you any more info that helps, then great. If not, I'd advise one of the "private" groups if you get to pick. More interesting and frankly many people on the REIT/CMBS sides are looking to join the private/direct investment all the time (you find many such posts on WSO).

As for equity vs. debt..... I really don't have any way to say what is "better", and frankly there are tons of sub-categories of both. If you want to learn more about all that, do some research, I'd bet you can find white papers from all these big firms that describe the universe of real estate assets. As for the job/career front, tons of WSO threads have attacked the merits of equity vs. debt careers.

Start Discussion

Total Avg Compensation

May 2021 Investment Banking

  • Director/MD (9) $911
  • Vice President (35) $364
  • Associates (195) $233
  • 2nd Year Analyst (110) $151
  • Intern/Summer Associate (96) $145
  • 3rd+ Year Analyst (26) $145
  • 1st Year Analyst (404) $131
  • Intern/Summer Analyst (330) $82