Debt & Equity Brokers - Worth it to work for principal side first?

Currently working as an experienced analyst for an institutional debt & equity brokerage and am pretty set on pursuing the broker career path. Any brokers here that can opine on whether its worth it to get principal side experience (e.g. debt fund) prior to making the jump to trying to win clients? Not sure if its worth it to jump from an debt brokerage team to a debt fund for a few years back to a debt team. 

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Comments (10)

Sep 14, 2021 - 11:15am

My response is more of a question for you.

What do you think you would gain or miss out on?

I would argue if you want to broker deals then why pigeon hole yourself at a debt fund besides saying you have more institutional experience I guess. You would be less sales-y I guess when speaking to clients but… you would only be a singular option to them.

If that option doesn't work then they look somewhere else. When you're coming up a brokerage shop you can at least present and creatively figure out how to solve their capital needs by having a strong understanding of what each debt fund/lifeco/agency/mezz/etc group can do and which relationships you can push for better terms.

If you like being very deep in the weeds it might be a good option, but if you're 3 years in as your title says I don't see the point personally.

  • Analyst 3+ in RE - Comm
Sep 14, 2021 - 11:04pm

I feel like a significant amount of the top D/E brokers have principal side experience which I assume allows them to come off as more impressive/sophisticated to institutional clients. Also just generally think I may learn more with a move to a leading debt fund for a few years which may be worth it down the line. 

  • Analyst 3+ in RE - Comm
Sep 14, 2021 - 11:06pm

Really? Don't think the insight I'd be able to gain from working with a leading debt fund would be worth it? 

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Sep 14, 2021 - 12:34pm

If you want to be a capital broker you can learn the modeling skills on your own.  However, the connections you make while at the debt fund won't provide enough flow to sustain you at the brokerage.  You are far better off building more industry connections at the brokerage firm.

Sep 14, 2021 - 11:30pm

I believe that if you are a deal guy then you are a deal guy.  I started at a sweatshop I-sales brokerage in college that had a small debt team and closed my first $50M+ transaction as an independent debt broker 10 weeks after graduating undergrad. Nobody cares about pedigree it's all about deal history and reputation. Its nice to be a rainmaker at CBRE, where all you work on are exclusive assignments, but that's not the only way to do it. The best way to win business is to add value and solve problems. I know some very unsophisticated people with massive books of business, being sophisticated is only a value add. 

Sep 15, 2021 - 8:54am

you can make a ton of money as long as you hustle. The 'non exclusive' space is much harder, in a sense, because you need to work fast with much more uncertainty. There are many people who will refuse to work on a non exclusive basis because you may not win the deal and therefore won't get paid. But it depends on the person, risk tolerance, and ability to sign up exclusive deals. I personally wouldn't work on non exclusive deals if I was a broker, but that's just me. 

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Sep 15, 2021 - 12:10pm

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