AEW Capital Management: more info, insights?

theBEEGEES's picture
Rank: Baboon | banana points 174

Does anyone have information on these guys? They're a Real Estate focused Investment Management firm based out of Boston.

According to their website they have $22B under management and do both public and private market investing.

http://www.aew.com/overview.html

Comments (32)

May 31, 2012

Solid firm, well-known nationally (if not internationally). I know multiple people who have worked there in Boston, have had good things to say about it, and have moved on to other great jobs on the equity side.

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May 31, 2012
prospie:

Solid firm, well-known nationally (if not internationally). I know multiple people who have worked there in Boston, have had good things to say about it, and have moved on to other great jobs on the equity side.

What he said.

They have a great rep in the industry.

Man made money, money never made the man

Jun 1, 2012

What sort of position are you looking at and what are you comparing it against?

Jun 1, 2012

To be clear, I don't have an offer from them. I'm in the process of talking with an alumni there and I'm just trying to be as knowledgeable as possible about the firm and their position in the industry. But in terms of goals and interests, I'm trying to get into the acquisitions side of RE.

Jun 1, 2012

I responded to a prior post of yours regarding an interest in entering RE PE, so I will respond to you in that context.

AEW is a very well-known player in the real estate investment management world. They operate a number of different commingled funds that invest in different real estate strategies (core, value-add, opportunistic, etc.). They also operate separate accounts, which means that institutions can give them money to buy property on a deal-by-deal basis (as opposed to a commingled fund). I call companies like this "diversified real estate managers" (others are companies like Lasalle or perhaps Hines).

Not quite the same as working for a "true" RE PE fund (dedicated opportunistic manager or a real estate group of a multistrategy megafund), but this would be a very good place to get your feet wet in acquisitions and offers some potential mobility to the RE PE fund world (if that's what you're interested in). I would say this is much better than working for a CMBS group, lending, or brokerage (except Eastdil); better than working for a REIT or pure core fund; and slightly less appealing than working for a RE IB group at a BB bank (solely for purposes of entering RE PE; acqs at AEW would be much more fun).

    • 1
Jun 23, 2012
re-ib-ny:

They also operate separate accounts, which means that institutions can give them money to buy property on a deal-by-deal basis (as opposed to a commingled fund).

In general, do separate accounts charge lower management fees than commingled funds? Also would there be any performance fee/carry for running a separate account?

Too late for second-guessing Too late to go back to sleep.

Jun 1, 2012

Thanks re-ib-ny. Your posts have been REALLY helpful and I appreciate it.

Jun 6, 2012

Hey re-ib-ny,

You mentioned that working at eastdil would be better than acquisitions for re pe. Are you referring to capital market groups in general or specifically eastdil?

Jun 6, 2012

My response was poorly worded, but I was not trying to suggest either Eastdil or RE cap markets were "better" than acquisitions in RE PE. In fact, the OP is interested in working in RE PE acquisitions, and I was identifying the areas that I felt have most mobility in that direction.

In my comment re: Eastdil, I was trying to divide Eastdil from the other brokerage firms, not necessarily saying it would be better than working for AEW specifically, or in acquisitions generally. Please note that I have worked for neither firm, but am in the industry.

In my experience, Eastdil's analysts seem to have noticeably better mobility to the RE PE fund world than other brokerage houses. But this is mostly anecdotal, and the associate ranks of the major RE PE funds (large, established opportunity funds and real estate practices of the multistrategy megafunds) are largely dominated by former RE IB analysts from the bulge bracket banks.

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Jun 19, 2012

They're well known in Asia as well. The head of their Asia team has a great reputation and very solid resume of working with big firms / good teams.

Jun 21, 2012

Thanks for all the great responses. Can anyone name some firms that are similar to AEW in terms of size and reputation?

Jun 22, 2012

I think you could include: Brookfield, Invesco, Hines, Lasalle, PREI, RREEF (questionable situation given terminated sale to Guggenheim), Stockbridge, and Tishman Speyer, among others. These are all fairly large, reputable, real estate-focused Asset Management shops that invest through various pools of equity. They sponsor private equity funds in the technical sense of the term, but are not usually seen in my mind as part of the subset of "true" PERE.

Jun 22, 2012

I would also add Fortress, Angelo Gordon, AREA, Hudson Advisors (Lone Star Funds)

Jun 22, 2012

What's up with RREEF? A couple of their heavy-hitters in socal left the firm and they have not been active.

Man made money, money never made the man

Jun 22, 2012

Fortress, Angelo, AREA, and Lone Star are in a different league from AEW. Those are genuine private equity funds, and the compensation will be on a different level as well (though I can't say I know exactly what AEW pays). The target talent pool of the prior firms will also be different, as will the exit opportunities.

Deutsche Bank owns RREEF. The platform has struggled a bit in recent years and DB decided to hock the business about a year ago and more or less seems to have pulled the plug on all acquisitions and major new activity. They went into exclusive negotiations maybe six months ago to sell it to Guggenheim, but the talks fell apart and they announced a termination of the discussions this week:

http://www.globest.com/news/12_377/newyork/finance...
Doesn't seem like there's much upside there until the future of the platform is resolved, hence the recent defections. Almost everyone there is trying to get out. Also, can't imagine they can raise money given the uncertainty.

Jun 23, 2012

i know AUM isn't everything but the 4 largest in terms of gross AUM (equity and debt) own about 27% of the real estate funds out there.

in order: Blackstone, Lone Star Funds, Prudential, JP Morgan.

i get that some of these are known for core so don't use the whole strategy argument. all i'm wondering is, how can you fucking blindly ignore 3 of the top 4 AUM RE firms when discussing RE firms. no one ever mentions lone star, Prudential, or JPM.

Jun 27, 2012
the bank robber:

[...] all i'm wondering is, how can you fucking blindly ignore 3 of the top 4 AUM RE firms when discussing RE firms. no one ever mentions lone star, Prudential, or JPM.

Because they're not as cool / fun / finance-sexy as Carlyle, Fortress, Angelo Gordon, AREA, Colony, or even MSREF, Whitehall and LBREP in the old days... Maybe some JPM and Lone Star strategies are, but Prudential and the core stuff just isn't as fun to talk about.

Jun 28, 2012
Relinquis:

Because they're not as cool / fun / finance-sexy as Carlyle, Fortress, Angelo Gordon, AREA, Colony, or even MSREF, Whitehall and LBREP in the old days... Maybe some JPM and Lone Star strategies are, but Prudential and the core stuff just isn't as fun to talk about.

Pru actually has some opportunistic funds - I've visited them in person.

Jun 28, 2012
prospie:
Relinquis:

Because they're not as cool / fun / finance-sexy as Carlyle, Fortress, Angelo Gordon, AREA, Colony, or even MSREF, Whitehall and LBREP in the old days... Maybe some JPM and Lone Star strategies are, but Prudential and the core stuff just isn't as fun to talk about.

Pru actually has some opportunistic funds - I've visited them in person.

True... Pramerica has done some interesting deals outside of the US (some merchant banking / corporate ones as well), but when I think of Pru I think of core and maybe mezz... but that's just me.

You can make a good living at any of these institutions (the ones that still exist!).

Jun 23, 2012

I would say it depends on the LP and the structure of the deal. On average, if the LP is high-net worth, fees tend to be higher because it is easy for the GP to get away with it. If the LP is institutional, fees typically follow previous term sheets from prior deals/funds.

In general, most funds had to lower their fees to attract capital. Additionally, it will depend on the prestige level of the GP and the GPs willingness to bend over for the sake of getting deals done.

Jun 24, 2012
feuerwerk:

I would say it depends on the LP and the structure of the deal. On average, if the LP is high-net worth, fees tend to be higher because it is easy for the GP to get away with it. If the LP is institutional, fees typically follow previous term sheets from prior deals/funds.

In general, most funds had to lower their fees to attract capital. Additionally, it will depend on the prestige level of the GP and the GPs willingness to bend over for the sake of getting deals done.

Thanks. Is it standard for GPs to charge the 20% performance fees on separate accounts?

Too late for second-guessing Too late to go back to sleep.

Jun 24, 2012

Brandon St Randy, I am not that familiar with separate account structures so I can't really comment. However, what feuerwork said is pretty consistent with my understanding.

Bank Robber, was your post directed at me? If so, the question was to name firms that are similar to AEW. I agree that Pru's PREI group is similar, and mentioned them. JPMorgan and Lone Star in my mind are not, but I suppose it's a matter of opinion.

Jun 24, 2012

I would say that a promote is standard, but the structure can vary. Again, it will depend on the LP/GP relationship, as well as the prestige of the GP/LP. It's in the best interest of a GP to pursue a 'catch-up' waterfall where post-preferred returns are split 50/50 until 20% of profits (example). However, as mentioned before, there has been a lot of push back from LPs to just have a tiered waterfall where the promote gets triggered after one or more hurdles. I have seen promotes go as high as 30%. 80/20 is a very common structure to answer your question though.

Jun 28, 2012

Pramerica in Europe / PREI in the US. They have some opportunistic-oriented funds, but they are still a big diversified manager and the compensation there is about half of what the big name opp funds pay. I know this for a fact.

Jun 28, 2012

RE-IB, why are you saying there is any difference between Pru and JPM? They are practically the same real estate platforms as far as I am concerned. Heavy and known for core and value-add with some opportunistic strategies.

Also, someone mentioned that AREA pays well. I have heard otherwise directly.

Jun 28, 2012

Also, can anyone elaborate on the Lone Star and Hudson relationship? Headhunters used to call me up about Hudson and I was never interested because, despite the "they are involved in the investment process" line, it did not sound like as strong of an opportunity as LS.

Jun 28, 2012

Requestions, again, my original commentary was directed toward identifying similar platforms to AEW (a topic from which this thread has largely digressed). I feel PREI is much more similar in terms of structure (a real estate-focused, fund and separate account manager) whereas JPM's real estate business is tied into a much larger multi-strategy Asset Management business of a large investment bank. You are right, though, that the strategies are not all that different.

Hudson acts as a servicer/operator subsidiary of Lone Star. A lot of the major PE funds have made an effort to acquire or create special servicers for access to deal flow (Cerberus bought LNR, Fortress bought CWCapital, Island Capital bought Centerline). You are right that working at the PE sponsor and working at its special servicer subsidiary are different.

Dec 1, 2013

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Aug 7, 2012

Not always, but in general yes, the PE fund will be the better opportunity. There are a wide variety of private equity funds, however, which range from the major, reputable players who pay incredibly well and offer a ton of exit opportunities; to small-to-midsize but respectable and successful boutiques that pay pretty decently and from which you can find good exits if you hustle; to totally irreputable, no-name firms that pay next to nothing and try to sucker kids into working for them because they call themselves "PE."

The reality is that the question is largely irrelevant. The kind of people servicers and PE firms hire are very different, so it would be rare for you to be evaluating offers from both. Also, you'll know the comp in the offer.

Mar 29, 2015
re-ib-ny:

Not always, but in general yes, the PE fund will be the better opportunity. There are a wide variety of private equity funds, however, which range from the major, reputable players who pay incredibly well and offer a ton of exit opportunities; to small-to-midsize but respectable and successful boutiques that pay pretty decently and from which you can find good exits if you hustle; to totally irreputable, no-name firms that pay next to nothing and try to sucker kids into working for them because they call themselves "PE."

The reality is that the question is largely irrelevant. The kind of people servicers and PE firms hire are very different, so it would be rare for you to be evaluating offers from both. Also, you'll know the comp in the offer.

Where do you think Stockbridge sits along the spectrum--specifically their opportunity funds? I've heard very complimentary things about their reputation and they manage close to $9bn. Their opportunistic strategy seems to be more of a development model though, with major projects that have 5-10 year time lines (Treasure Island, Bay Meadows, Hollywood Park), as opposed to quicker 2-3 year projects that include refurbishments or repositionings that other opportunity funds are undertaking (although they also undertake these types of projects).

On that note, does anyone have any more information about Stockbridge specific to reputation, exit opps, pay etc? And for someone relatively early on in their career, what is the type of experience that's provides the most flexibility moving forward for strong career and income growth. For example, I know today a lot of people are focused on gaining Eastdil type experiences where you gain lots of reps in an "acquisitions" type role but if you take a look at the backgrounds of a lot of these top real estate shops' top brass, many started off at places like Trammel Crow where they spent their formative years managing 3-5 projects where they would've gained less exposure to running numbers on tons of deals but gained a much stronger understanding of the start-to-finish real estate investing cycle.

Thoughts?

Nov 21, 2013

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Nov 22, 2013