Q&A: REPE Acquisitions (>$10B AUM) to BB IB
Seen a few people inquire about this transition and made it myself about a year ago after a while of pounding pavement, cold-calling and sending hundreds of online applications. Finally got my feet under me enough that I feel qualified to drop some knowledge on the subject. I spent a bit under 4 years working for a REPE shop with about $7B under management in a major northeast market before deciding to make the jump to IB. My role was primarily acquisitions, across asset classes, with some asset management strewn in. Now working for a large balance sheet BB in the real estate industry group.
Uhhhh...why make the move to sell-side from an awesome buy-side seat. Smells fishy to me
Deleted, I was out of pocket. Sorry boys.
185K in 4th year REPE seems low. Buddy of mine started at 3B REPE fund as analyst at 150K all in. Do you plan on going back to the buy side at any time? Sounds like you worked at a place like Related and not a true opportunistic REPE shop
Opportunistic REPE returns are more similar to corporate PE returns than you are leading on. Facebook / Amazon were never PE buyout candidates - they were at one point growth equity / VC targets. Yeah no shit VC returns can be crazy but FB and amazon are once in a lifetime opportunities. In corporate PE, you're buying, stable, cash-flowing businesses - not high growth tech business that have $10bn in revenue and negative $5bn cash flow.
REPE Funds target 18-22% returns and get 20% profits after a preferred return is hit. A corporate PE Fund may be targeting slightly higher IRRs in some cases but the structure is more or less the same. Junior staff in REPE are paid less than their Corporate PE counter-parts because the job is easier (no offense RE guys, but more people can build an apartment model than a corporate LBO) - not because the funds can't afford to pay their associates an extra $50k. It's actually a good thing for the REPE Fund partners (lower G&A costs).
You mention compensation as a big driver for the move but the reality is you're not necessarily going to make more in the long haul in IB. If you get staffed on the buyout of a REPE Fund or a capital raise for a fund, you'll see in the model that the promote to the GP can be absurd (even for RE debt funds). I think you'll also see during your time in IB that many of your clients / counterparties are REPE Funds. Only difference is you'll be working with groups that can write big checks, do PIPEs, Structured corporate Investments, REIT buyouts, etc.
I think your real estate deal pipeline was either extremely lacking in strength or nonexistant. Development deals can reach far over 50% IRRs, particularly if they're levered and sold immediately after development...as many developments are. Due to the short hold period (12 - 16 months), I've personally been involved with several real estate deals with > 100% IRRs. Albeit, the multiple was only a 1.5 or so.
Nevertheless, point stands.
Not true. You can have some amazing growth in RE (though obv not like in tech). Ive seen a company that would build at 5-6% yield, and then have it valued at 4% yield (smth like that, Im not real estate person, but this was roughly the numbers) which meant they would realise 30-40% return on each project. They would then leverage the increased value with debt and use it to finance the equity portion of the next project, which would then yield a quick return...and this resulted in very high growth.
thoughts on real estate at SWF vs REPE?
Deleted. I was out of pocket, sorry boys.
for a SWF that does active investing
Have you ever once considered giving back to those less fortunate than you?
Deleted. I was out of pocket, sorry boys.
Interesting move. Do you enjoy working 100 hour week? Did you not like RE at the asset and want out? Not sure if there's many questions to be asked if that's the case, it is a real estate forum afterall... Looking deals at a corporate level and all this banking bs work is boring (I guess for most people in this forum).
Agreed it does open doors at the big boys REPE firms, but there are other more fun routes to get there besides BB IB....I guess if you're not sure about being RE for the rest of your career, it's a worthwhile option.
Also, not trying to rain on your parade but I wouldn't want to be comparing salaries like you did above since IB hours are probably twice as much while pay isn't, hence you should be compensated for your time....Most of us, myself included don't do and don't want to do those kind of crazy IB hours. If we convert to an hourly basis, similar size buyside RE firms in high COL cities vs BB IB, IB pay isn't as great as it seems at a junior level. You still won't make more in IB even at MD level in BB IB vs Principals at various buyside RE shops or a very senior broker at JLL/CB/ES in Tier 1 Market. Amazes me how some folks can be in banking and work like a machine for pretty much a decade to get to VP/MD level- takes very special personality/sacrifice of family time to do that. Don't mean to take this convo into a dick measuring contest but sounded like that's what you were looking for. It all comes down to what you like to do my man.
Seems to me like you're looking for affirmation with this post so CONGRATS! Actually it almost sounds like you're just trolling people and trying to start shit... Don't really give a shit either way hah so best of luck to you.
Facts all day. What’s the point of making more if you have no life.
Deleted. I was out of pocket, sorry boys.
Lmao chill out my guy. If you like IB so much go to the IB forum.
Curious as to if you/anyone could opine on a similar route, but from REPE/acquisitions/asset management > Investment Sales/DE placement teams, specifically at one of the major players.
Happens a lot. Lot of disgruntled mid-level (Associate/AVPs) buy side guys who don't get carry bonus yet end up going to brokerage to become senior brokers and exclusively work with the buyside firm they left from and other people they know in their rolodex.
My close colleague did the same move in a major northeast city and is now MD at one of the ES/JLL/CB/Newmark level brokerage. I constantly see his posts on LinkedIn of deals he closed and have been punching myself in the stomach after roughly calculating what his commission check would be. You can really end up getting a significant raise if you time this move right. At a junior level, I don't really see the point of jumping since it's unlikely you'd be compensated more as a junior broker vs junior person on buyside teams...
Is there a reason this is a much less talked about path? Seems to get you past the difficult years with zero clients of being a broker and allows you to reap the benefits of high comissions and a well established network.
Can you PM me? I'm looking to learn more about this route.
Deleted. I was out of pocket, sorry boys.
Been looking to make this move myself but anytime I got transaction, they ended up leaning towards "IB laterals". I am currently on the buyside working for a megafund portfolio company.
Can’t help but think this is a bit of a pointless post: If you were at BX, APO, SCG etc you would’ve have no reason to make your move. It seems more of a case you’ve traded “up” your firm. I.e T3 REPE -> T2 IB
What is comp for BX/APO/SCG RE associate?
^ for analysts
Hey man - why don't you go smoke some weed and chill out?
What REPE MD was destroying you?
This guys seems like he’s really internalizing the mistake he has realized he made by making this move
Deleted. I was out of pocket, sorry boys.
This dude got so mad in his own AMA post
Deleted. I was out of pocket, sorry boys.
No one:
This dude: fuck undergrads. They don’t understand the absolute prestige of investment banking at Wells Fargo. By the way, did I mention I make more than people in REPE?
But in five paragraph essays.
This is delusions at its best. Dude wants a bunch of real estate people in a RE forum to ask him questions about IB but nobody gives a fuck about his shit (Wells Fargo LMAO) accomplishment or his boring ass job. Then he goes delusional and start picking fight telling random people on a website he makes more money then them citing some excel file a bunch of 20 something year-olds fill out. Get a fucking life you loser.
Deleted because I am cringe and butthurt.
He’s becoming unhinged now lol. This has been one of my favorite threads in the RE forum.
”I don’t want to do REPE, but just so you know, I totally could go to Blackstone / Starwood if I wanted to. Or I could go do Tech Growth Equity at Vista (my college buddies work there so I’d be a shoe-in with 7 years of real estate experience). Exit ops are endless when you work at Wells Fargo REIB”
No one:
This Dude: Mark Zuckerberg!
Wow - such a helpful Q&A. I learnt nothing other the fact that OP is an asshole.
Probably got a micro dick that makes him insecure enough to create a brand new profile and write essays like above (which I obviously didn't read)
Deleted. I was out of pocket, sorry boys.
your next AMA should be about stationary bikes
Holy shit, and I thought I knew how to take a thread off the rails.
But do you make more money than RE folks?
Deleted. I was out of pocket, sorry boys.
If you are rocking Biggie in your avatar, you better step up your insult game.
Maybe we should pin this to the top of the forum as a cautionary reminder why nobody should ever leave repe for reib.
It's already on the top. But excellent idea!
Not only you make less money if you leave REPE, you will also have no life, no hair, penis will turn micro instantly. You also lose your sanity and becomes a schizophreniac who writes essays on a website and repeat what he says 20 times over and over like an insane broken record. Need I mention going through people's old posts like a creep?
Exhibit A ^ "I Am Better Than You"
delete. i think OP has had enough.
Deleted. I was out of pocket, sorry boys.
Deleted. I was out of pocket, sorry boys.
I love democracy
Why'd you delete the comment where you said you work at an IB "like WELLS FARGO/Citi/BofA" ????
You're such a loser lmfao.
hahahaha
I'm tired of this BS thread, OP's unfathomable level of stupidity and troll, and his spreading of misinformation to a bunch of young aspiring RE folks. Let's settle this once and for all.
I Am Better Than You, look's like you are mad you're making less than my property manager while being a banking slave working 100 hours/week - she didn't even have a Bachelor degree and works 40 hours a week. Plus she's hot and probably gets laid a lot more than I Am Better Than You. You came in hearing writing essays hoping people would affirm your job, but reality is, your job sucks and nobody gives a shit.
Sounds like you're real tensed and just need a girlfriend....A real one, not the imaginary one your schizophrenia psychotic brain came up with.
Happy thanksgiving!
*chart credits to Adventures in CRE
Deleted. I was out of pocket, sorry boys.
Yeah this chart is low on the top end. To start, top leasing guys make millions. They don't even have to be dealing with mega-tenants like BAML signing a huge lease in LA. Could be little shitty medical office tenants and still pull in 1-2 mil.
I'm guessing this excludes carry. There are plenty of early 30s guys making 1mil+ in RE. But they're not on this forum because they're out finding new deals rather than bickering over base salary.
OP's bonus will be in Wells Fargo shares, much of which will be restricted stock + shares accrued but not paid until later years. That is the biggest joke of this whole post and no one has touched on it yet. Bonus structure at the BBs is designed to lock you in starting at the associate level. Imagine working 80 hour weeks and having your bonus disappear because of the umpteenth case of fraud at Wells LOLOLOLOL.
This entire thread reflects quite poorly among the people trying to justify themselves to a troll. 100+ comments and nobody is in there feelings? I did a stint in IB and would probably be making marginally more if I stuck with it. I also hated the sell-side, love my current gig and get paid more than enough. There's always going to be someone out there that makes more than you, has a bigger house than you, etc. and the quicker you accept it the quicker you'll be able to find happiness and contentment in your own skin. Now stop replying and go get drunk with your families you degenerates.
Deleted. Happy thanksgiving bro and good luck at your new gig
Whole thing went to far, I do apologize and would appreciate you not trying to kill me in real life. Will retract all prior comments.
Probably a good idea to delete the part of your comment that has my comment in quotes
will you still keep me posted if you decide to get a stationary bike? I really think you'd enjoy one.
I think your land bargain pipeline was either incredibly ailing in strength or nonexistent. Improvement arrangements can reach far over half IRRs, especially if they're turned and sold following development...as numerous advancements are. Because of the short hold time frame (12 - 16 months), I've actually been engaged with a few land managers> 100% IRRs. Though, the difference was just a 1.5 or somewhere in the vicinity.
HAHAHA damn i wish some of these golden posts hadn't been deleted. what a great thread this would've been to see if i had caught it in time.
Deleting this to protect the guys anonymity, but yeah he was a douche and also a liar
This is hilarious, thank you for the synopsis sir. Also impressive you were able to find him lol
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