Breaking into REPE MM or Mega Fund -- Is it just a dream?

Hi all,

First post here.

How difficult would it be to break into a REPE upper middle-markets or megafund? From what I have been seeing, it seems like if you do not have a BB IB or IB background, it would be extremely challenging. Additionally, I have been told that head hunters are crucial to help make this happen.

Some background on me: 2019 graduate, non-target, a year in prop-tech sales. Currently, a part-time MRED candidate in NYC. FT underwriting analyst at an agency lending firm (a couple of months in).

To my understanding, the on-cycle REPE recruiting cycle starts extremely early on. Any insight, tips, or guidance would be greatly appreciated.

Comments (12)

Dec 2, 2021 - 8:30pm

How difficult would it be to break into a REPE upper middle-markets or megafund?

So, can you explain by what you mean by "upper middle-markets"??? Like give some firm names or something, because I'm drawing a blank. And what is your "cutoff" and well definition for megafund? I'm guessing you mean like the BX, Starwood types... but might as well confirm if your going to define the other.

Dec 2, 2021 - 9:10pm

Glad I asked.... that is totally different than what I had in my mind. To note the PERE100 list is based on fundraising (for 5 years historical I think), and only for opportunistic and value add strategies (and I think only for comingled funds, not so sure on that, it's all on their website if so curious). Anyway, the net of that is the actual "ranking" can be kinda arbitrary and misleading potentially (I mean JP Morgan AM is dead last on that list... like below a dozen firms I've never heard of). The IREI 150 list is based on AUM, and thus more stable and meaningful IMHO.

Regardless, rankings are pretty meaningless for assessing firms from a career standpoint.  Back to your question... since we have established you want a career in institutional real estate and not actually targeting a mythical small set of well-known PE firms with real estate platform.....

YES, you can get hired by a firm on those lists, an MRED from NYU/Columbia (or I guess Fordham now? are there others in NYC, anyway... even Baruch, I think they have one now), with the job you have now will get you interviews. You still need to do all things to be a good candidate and be hirable, but like your 99% ahead of the world. If you said you had to work for like Blackstone or KKR... yeah... maybe a significant uphill battle (maybe not totally impossible, but close to it from what I hear by repute). 

So, not sure why people say this is "extremely challenging" when you have a profile of like a lot of the people who get hired at those firms (many of which routinely hire so-called "non-targets" direct from UG btw).... meaning those on the PERE 100 list (or IREI 150 list, which is better for such purposes). Ironically, as I look at the rankings, the ones I see as "best" in my own personal view are seemingly packed around the 40s-60s, go figure. I know that list gets used a lot, but wow is the order of it nuts (I mean, selected fund raising, so if someone was not in the market for new capital for a year or two, I'd guess they fall fast right?). 

Dec 2, 2021 - 9:48pm

@redever Thank you for the extensive feedback! Initially, as I started exploring, it seemed like the only funnel into those firms is through IB/Consulting, which is definitely not my background and led me to think that I should pursue a different career path, to be completely frank. So, it is incredibly reassuring to hear you say that you have seen people with a similar background get into those roles. Of course, maybe it could just be me comparing myself to IB analysts at BB's. But hey, "comparison is the thief of joy," and it seems like it's only human to think so.

When it comes to breaking into institutional REPE, would you say on-cycle recruitment would be easier to break into? Reach out to headhunters? I have been networking with firms to create an easier "touchpoint" if/when something comes out. To my knowledge, if you are in IB, then headhunters typically reach out to them a couple of months after training and recruit almost 1 1/2 years in advance, which is bizarre imo. 

Most Helpful
Dec 2, 2021 - 10:32pm

Just to fill in the gap here... I think you are taking the lore around the big name PE type firms (like Blackstone, KKR, Starwood, etc.) and extrapolating across all of institutional real estate. Yes, those big name firms recruit heavily from BB I-banking and generally look for top-Ivy type degrees (or M7 MBAs), that's all true by and large (still exceptions in all reality). Worth noting that the focus on recruiting out of IB comes more from the fact that those groups are really most interested in entity and portfolio level deals (like buying out a firm), thus I-banking experience is really useful as that is what I-bankers do. 

Once you move out of those firms, and into ones that do actual real estate deals (like actually acquiring individual assets, doing development, making individual loans, etc.... i.e. what can just be rolled into "buyside" deals), the IB background isn't all that special. Sure its good, but so would be investment sales, debt/equity placement, appraisal, lending/underwriting, etc. as those all fit into what they do directly. Even the "adjacent" fields like law, architecture, construction mngt, and just corporate finance/accounting type roles/backgrounds can be desired (clearly some fit better for development and others for investment mgnt, but no hard rules). Further, plenty take people with little/no background direct from UG or grad school (will say, if you have zero relevant experience, direct from UG is harder to find sometimes, but you do have direct exp. and am in a grad program so not a worry). 

So, to your follow-on question... the answer is going to vary by firm, this industry is much smaller and more fractured. Some will have such a thing as "on-cycle recruitment" (like the really large groups like PGIM, Nuveen, CBRE GI, etc.), but most won't... they just hire when they need someone. And, not to discourage, but even those firms on those lists may only need a few people at the analyst/associate level every year. 

So, you network, apply for what's open, etc. Do it all, until you get the job you want. You can reach out to headhunter firms, but don't expect much response at the junior level. Those firms that work on junior level (like outsourced HR units) won't care much about you and frankly may just as well find you on LinkedIn. They will also tell you the kind of BS about only I-bankers need apply as a way of telling you to f-off as you are a time waste to them at the moment. Better off going with alumni, school organizations, local organizations (since you mention NYC... ULI is a must, NAIOP is so-so but great nationally and in NJ, and there is also MBAofNY and YREPNY). No harm in contacting people off LinkedIn, some will chat, some won't.. that's just a numbers game. 

I don't want to tell you this is "easy", but it's really not that hard for someone in your position. Just have to put the time and effort into it!  

  • Analyst 3+ in RE - Comm
Dec 3, 2021 - 9:46am

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