Debt and Equity Placement vs Analyst at Midsize REPE
I looked around and I couldn't find a recent post covering this so since it is relevant to my current position, I was hoping I could get some advice from you guys.
What would be a better place to start a career in real estate?
Analyst at a debt and equity placement group (think Northmarq, Berkadia, HFF) where I would get exposure to all asset classes.
Analyst at a mid size REPE firm (On their second fund, raised ~300 million, expecting to start next fund soon @ $400-500. Only focuses on one asset class. Do not do any ground up development, but they focus on value-add and opportunistic. As an analyst I would work on both acquisitions as well re-development projects. These are both in the northeast so there is no difference in location preference. Pay also does not matter.
I do not really see myself becoming a producer long term and that is why I am leaning toward to repe shop. However, there is a familial connection to the repe shop so it would be nice to work at the broker and not always be looked at as my dad's kid.
Thanks for any advice.
Nosky
Both are good options. I worked in a placement group before my current role so I'll give my two cents on that:
Like the group you are contemplating, my group focuses on all asset classes, and the exposure was extremely valuable at the start of my career. I liked working on some asset classes a lot more than others, so when I applied for buyside roles (some of which were niche similar to your PE shop offer) it made it a lot easier to determine what I wanted to do. Also, I worked at a smaller firm, and it was only a hindrance to some of the top tier PE shops (who wanted candidates who did BB IBD/worked on the buyside already). If you network you have the potential to move into pretty much any role.
You should ask some questions about the level of analytical work that you would be doing at the placement role. Some brokers are running very vanilla analyses, or receive materials from a client and immediately start blasting them out to the market. Those shops make their money, but you won't get as good of an experience at the analyst level. It would also be good to ask about the progression paths at the firm. At some shops, you don't ever have to be a producer, and instead can focus on placing transactions.
Looking back, I personally would have taken my previous job over an offer at a niche PE firm as my first job, unless the PE firm was one of the best in its space.
Feel free to PM me with any questions.
Hey RESC thanks for the detailed response. How did your experience placing capital prepare you well for the buyside? Or was it just good exposure to the industry? What type of perspective is gained from working at a placement shop? DId you get to see a lot of investor strategies? And did you move into an acquisitions role or more Asset Management?
Thanks, I really appreciate you taking the time to pitch in
No problem. In order:
I thought extremely well. I ran deal level levered CFs, waterfalls (both deal level and at a GP level), and was basically running the model for some of our clients. I had no problems with the Excel tests in my buyside interviews and didn't have issues transitioning to my new job
You get a good view of the capital markets and industry trends. When the CMBS market takes a dive the senior guys on your team should be the first to know about it
Yes - some of the deals I worked on: ground up construction, conversion of a vacant historic building, stabilized refinance, value add bridge loan/light renovation, preferred equity behind an in place senior loan, pre-development land loan
Acquisitions
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