Hi y’all. Current incoming analyst in the asset management division of a LifeCo. The program includes 3 rotations where I will rotate through global real estate equity , commercial real estate debt , and high yield debt investing desks.
Will it be possible to break into REPE acquisitions role with this experience under my belt ? Will I need a MBA first? Any insight you could offer would be greatly appreciated!!!
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Yes, you can break in. No you won’t need an MBA. Also you technically already broke into REPE. The Life Cos are “real estate private equity” this forum just happens to think and talk like it’s not “prestigious” if the firm doesn’t manage a fund. They forget that these Life Cos all have more AUM than more funds could even dream of. Sidenote, many Life Cos happen to manage third party capital as well (funds). I spoke to a friend recently that works on a large Life Co’s fund business.
The Life Cos are awesome firms - many who leave regret it. They have great work life balance. Albeit, lower pay (which is why people do leave). You’ll see tons of deal flow and learn a lot. If you choose to leave, the market values Life Co experience and it’ll open a ton of doors.
yeah, just wanted to piggyback off this and say that LifeCos are huge so you'll have a great learning experience, and really understand how to look at risk imo
Thanks for these insights. I am excited to get started and agree that this analyst program is a great learning opportunity.
I am hoping to exit to a more traditional REPE shop at the associate level for a few reasons (one is the pay as mentioned above). Is recruiting for REPE similar to traditional PE where recruiters reach out? Is it more networking based ? All of this is super new to me so sorry for asking these basic questions lol.
It’s a mix of direct applications, your own networking, and recruiters reaching out. Don’t be so set on leaving for REPE so quickly. You may find you’re getting awesome experience and love the team you work with. You don’t realize it now, but the $25,000-$40,000 extra per year you’ll get in REPE might not be worth the extra 15-20 hours per week of work. It sounds easy to go from a 50 hour work week to a 70 hour work week, but it’s a totally different ballgame and stamina in practice.
You may find you want to go to a traditional developer or a GP, where actually, you can make just as much as traditional REPE, or more. And be closer to the asset. A lot of analysts and associate roles at REPE and Life Co.s are fantastic, but you may decide you want to be closer to the asset and more hands on driving the business plan (GP). Don’t get so set on “traditional REPE yet.” See what you like and make sure you are okay sitting a little farther away from the asset. If you want to “get closer” to operations, go the developer route.
Another factor to consider: traditional REPE is great, but you invest out of a fund. A fund has returns that need to be hit. This is called Absolute Value investing. The Life Co.‘a are Relative Value. They have a large amount of money they need to invest to match their premiums. If corporate bond spreads are at 1%, the Life Co is okay investing at a spread of 3% (for example) to do a real estate deal. If the corporate bond spreads are 2%, the Life Co may try to get a 4% spread. What I’m getting at is Life Co.’s are relative value. You won’t be chasing deals for returns sake but you buy the market pricing and attempt to buy the assets that will outperform. REPE can’t do this - they need to get the returns the investors were told they would be getting. It makes it much more challenging to put money out in REPE. It also is a different investing style.
Just a few things to consider.
Very informative. How would you compare similar investment roles at REITs vs REPE?
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