Does Real Estate (property level) Acquisitions Experience Count for CFA designation?

I am doing property level acquisitions (building acquisition models, taking part in all the due diligence, presenting deal investments to senior investment director, doing credit analysis on prospective tenants, etc), and am contemplating the CFA.

I have read the hotly partisan discussions about its merits, but want to know if 4 years in this role would qualify as proper work experience for the designation (since it is not securities related AND the real estate investment is not part of a wider securities dominated investment platform).

See: CFA Institute's 'Becoming a Member' section for their exact working since I cannot post that link here.

Thanks guys.

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Comments (31)

May 21, 2013

any movement on this - I am in a similar boat and if you have any input I would appreciate it

-thanks

May 21, 2013

I know of an alumni of my school who has worked exclusively in real estate and has the charter. He worked in acquisitions. I would also like to hear other info though.

May 21, 2013

Yes, it definitely counts - a number of my colleagues have the designation. Hell, I even know a few career accountants working on Level III.

Jun 4, 2013

This work experience definitely does not count toward the CFA designation based on your description.

This is directly quoted from the CFA Institute website (http://www.cfainstitute.org/about/membership/proce...):

- Evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process involving securities or similar investments, which includes, but is not limited to, publicly traded and privately placed stocks, bonds, and mortgages and their derivatives; commodity-based derivatives and mutual funds; and other investment assets, such as real estate and commodities, if these other investment assets are held as part of a diversified, securities-oriented investment portfolio; or

- Supervising, directly or indirectly, persons who practice such activities; or

- Teaching such activities.

In fact, the CFA Institute is known to be pretty anal about this. There are all kinds of people who have sat for and passed several levels of the CFA exam who haven't even contemplated the fact that the charter will not be granted until you obtain 48 months of securities level work experience. If NPV Positive has colleagues who have obtained the charter it's because they probably worked at a REIT or worked in something that they could construe, even loosely, as securities oriented. If you have a straight up real estate job it simply does not count. You'd be looking at, say, the CCIM designation instead.

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Apr 20, 2015

Incorrect. CFAI was very lenient with approving my work experience (about 1.5 years of it was very, very borderline). I also know a few charterholders who have exclusively worked in the RE industry (one in REPE, one in lending, and one in development).

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Jun 4, 2013

That doesn't necessarily mean it's "incorrect" to say that the work experience doesn't count. Bull sh*tting work experience or "stretching" work experience isn't that hard to do. As one can see from the definition, property-level acquisitions for non-securities portfolio does NOT meet the work experience requirements. Can one construe their work experience to meet the definition? Yes.

Just to settle this debate, I emailed CFA Institute directly with the OP's nearly exact question. I will copy and paste the response from CFA Institute, word for word. If I'm wrong I'll man up to it. But if I'm wrong it means that the CFA Institute definition/explanation of approved work experience is flagrantly misleading or straight-up incorrect. The CFAI's definition goes out of its way to mention real estate qualifying experience and then it goes out of its way to qualify what real estate experience is qualifying:

"...and other investment assets, such as real estate and commodities, if these other investment assets are held as part of a diversified, securities-oriented investment portfolio..."

Again, I'm going to cut and paste the CFAI response, so if I'm wrong I'll own up to it. But the definition from the CFAI site could not be clearer. And again, that doesn't mean one can't stretch or BS their work experience.

Jun 9, 2013

Wait doesn't that say "Evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process involving securities... , such as real estate ....

Jun 4, 2013
PF_CRE:

Wait doesn't that say "Evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process involving securities... , such as real estate ....

Where is the "securities" aspect of the OP's job? He specifically states it's not securities related. The CFA Institute specifically says the qualifying work experience must be securities related.

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Jun 9, 2013

I know multiple guys who have it who have never worked for a REIT.

Jun 4, 2013
prospie:

I know multiple guys who have it who have never worked for a REIT.

I mean, you can give your hearsay and rumors all you want--I'm presenting the exact facts, copying and pasting from the CFA Institute. I used to work at Freddie Mac, which is not a REIT. My work experience could have easily been construed to meet the CFA Institute parameters since I worked on multifamily underwriting, analyzing the transactions based on their compliance with the GSE's CMBS rules. But you can't just, say, underwrite retail properties for your organization to hold on their books and legitimately pass it off as securities related. If your friends/colleagues have the CFA designation, it's because they were able to construe their work experience as securities related. If not, the CFA Institute would have told them to pound sand. The CFA Institute is as anal as any organization one could ever deal with.

The OP specifically says his job is not securities related. Therefore, it does not qualify. Unless you can give evidence to the contrary, I would ask that you stop leading people astray with bad advice.

Jun 16, 2013

Pretty sure you can do it, I can also think of multiple people who have never worked in securities who have the charter.

I even know of one broker who strictly sells investment properties who has the charter.

Jun 16, 2013
DCDepository:
prospie:

I know multiple guys who have it who have never worked for a REIT.

I mean, you can give your hearsay and rumors all you want--I'm presenting the exact facts, copying and pasting from the CFA Institute. I used to work at Freddie Mac, which is not a REIT. My work experience could have easily been construed to meet the CFA Institute parameters since I worked on multifamily underwriting, analyzing the transactions based on their compliance with the GSE's CMBS rules. But you can't just, say, underwrite retail properties for your organization to hold on their books and legitimately pass it off as securities related. If your friends/colleagues have the CFA designation, it's because they were able to construe their work experience as securities related. If not, the CFA Institute would have told them to pound sand. The CFA Institute is as anal as any organization one could ever deal with.

The OP specifically says his job is not securities related. Therefore, it does not qualify. Unless you can give evidence to the contrary, I would ask that you stop leading people astray with bad advice.

Sorry, your advice is the bad advice here. You have to do a job that relates specifically to investments. This can be investment advice (I.e. Sell side er) or deploying capital on behalf of others (re acquisitions counts). What you did was compliance. You did not give a recommendation based on returns or any other investment metric. You did not deploy capital. Chances are you could not tell me a reasonable irr for the apartment building across the street, so chances are your "underwriting" experience is weak too. You analyzed for the purpose of compliance and I would have told you your job is not securities or investment related as well. There is a big difference between underwriting a single family home portfolio transaction for a fund versus underwriting grandmas sfr docs at your local bank branch for compliance.

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Jun 19, 2013

I think technically DCD may be right because it specifies that real assets count if they are held as part of a larger securities-oriented investment portfolio. That said, I don't think it should be too difficult spin it to make it count. A 9 - 5 loan originator from a life insurance company can underwrite the exact same properties with less complexity and get the CFA because the investment committee is tossing that note into their diversified loan portfolio. It's a distinction without a difference.

But the whole conversation is pretty pointless unless the OP wants to move away from property level investments to invest in paper - CMBS, notes, etc - or another asset class altogether. Otherwise, the CFA is a waste of time and money. I have it, so I'm not being opinionated for the sake of being opinionated.

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Jun 4, 2013
sk8247365:
DCDepository:
prospie:

I know multiple guys who have it who have never worked for a REIT.

I mean, you can give your hearsay and rumors all you want--I'm presenting the exact facts, copying and pasting from the CFA Institute. I used to work at Freddie Mac, which is not a REIT. My work experience could have easily been construed to meet the CFA Institute parameters since I worked on multifamily underwriting, analyzing the transactions based on their compliance with the GSE's CMBS rules. But you can't just, say, underwrite retail properties for your organization to hold on their books and legitimately pass it off as securities related. If your friends/colleagues have the CFA designation, it's because they were able to construe their work experience as securities related. If not, the CFA Institute would have told them to pound sand. The CFA Institute is as anal as any organization one could ever deal with.

The OP specifically says his job is not securities related. Therefore, it does not qualify. Unless you can give evidence to the contrary, I would ask that you stop leading people astray with bad advice.

Sorry, your advice is the bad advice here. You have to do a job that relates specifically to investments. This can be investment advice (I.e. Sell side er) or deploying capital on behalf of others (re acquisitions counts). What you did was compliance. You did not give a recommendation based on returns or any other investment metric. You did not deploy capital. Chances are you could not tell me a reasonable irr for the apartment building across the street, so chances are your "underwriting" experience is weak too. You analyzed for the purpose of compliance and I would have told you your job is not securities or investment related as well. There is a big difference between underwriting a single family home portfolio transaction for a fund versus underwriting grandmas sfr docs at your local bank branch for compliance.

This is flatout wrong. It's about how you can construe it. The CMBS portfolio for the GSEs is their investment--it's how they produce revenue and pay for their own existence. It can EASILY be construed that underwriting for a CMBS portfolio is part of a securities level investment decision since you are making the decision--literally saying yes or no--on the investment that is to be placed into a marketable security.

The OP's job is not even securities related. Unless you lie about your work experience it's not going to fly. That's not a matter of debate--that's fact.

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Jun 19, 2013

I'm not sure what kind of jibber jabber is going on here, but OP you should be fine if you are directly or even indirectly involved in any kind of investment decisions. Hell, even teaching or accounting qualifies. It's not THAT strict, as long as you describe it appropriately.

http://www.cfainstitute.org/about/membership/proce...
http://www.cfainstitute.org/about/membership/proce...
http://www.cfainstitute.org/about/membership/proce...

Jun 16, 2013
Going Concern:

I'm not sure what kind of jibber jabber is going on here, but OP you should be fine if you are directly or even indirectly involved in any kind of investment decisions. Hell, even teaching or accounting qualifies. It's not THAT strict, as long as you describe it appropriately.

http://www.cfainstitute.org/about/membership/proce...

http://www.cfainstitute.org/about/membership/proce...

http://www.cfainstitute.org/about/membership/proce...

It really is this simple. The "jibber jabber" is clearing up for future readers of this post that RE acquisitions at a fund does in fact count for CFA experience.

I do not know about CMBS regulation for GSEs, but it sounds like that did not count - however that information is irrelevant to the OP.

Jun 19, 2013
sk8247365:

I do not know about CMBS regulation for GSEs, but it sounds like that did not count - however that information is irrelevant to the OP.

To be fair, 'regulator' is an acceptable job title. But yeah, it really is not as complicated as some people make it out to be, provided that whatever experience you have is framed in the right context.

One example of something that wouldn't qualify is a programmer at Microsoft who's looking to enter the finance industry.

Jun 19, 2013

It's been 7 or 8 years since I was knighted, or whatever, but my impression was always that the CFAI was more concerned with the designation being diluted by middle office types or people working industry than by people involved in assessing the economics of investments in the context of a fund, portfolio, etc.

As a practical matter, it essentially comes down getting a charter holder to fill out the form or whatever they have to do to attest to the fact that you have been involved in the investment decision making process. I would not concern myself in the least with thought that spinning the experience a little (if that's really even necessary) to fit their nomenclature constitutes a lie.

If the OP reads this far down, he/she should try to call the office in Charlottesville if there's really a question about it. I don't know how the CFAI is trying to prevent dilution of these designation these days, so I guess it's possible that they are trying to weed out pe analysts. I'd be extremely surprised to learn that, though, considering the CFA isn't really that heavily pursued by those people. If the OP had been underwriting as a broker at HFF, etc., I think there would be a problem.

(There was a whole section on property level commercial RE analysis on the level 3 test, FWIW.) But again, assess what you want to do going forward before jumping into it. It's appropriate for some career paths and not helpful in others.

Jun 23, 2013

For many real estate finance and investment guys, this is a extremely important question since going back to school for an MBA is either not economically possible, or feasible given our positions.

The CFA can serve as a very valuable heuristic to employers, partners, colleagues and investors that one is intelligent, disciplined and financially educated (without the haze of nepotism or other factors there to cloud the judgment as is the case with some grads from top tier MBA's).

The fact that it is not 100 percent substantively on point with a RE guy's investment subject matter does not take away from its value as a powerful signaling device (nb: isn't a top MBA, aside from network, mostly a signaling device or veritable stamp of a certain level of mental acuity of its holders?).

After reading the above answers, it is still ++very unclear++ whether in the OP's situation (a situation that applies to many of us here) that the CFA could be conferred in a bona-fide fashion (eg, by actually describing one's acquisition work and not gerrymandering the details to fit what the institute ostensibly finds acceptable).

It would be helpful to hear from actual WSO members who have a CFA, and received it under the fact pattern described by the OP.

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Jun 19, 2013
SirRichard:

After reading the above answers, it is still ++very unclear++ whether in the OP's situation (a situation that applies to many of us here) that the CFA could be conferred in a bona-fide fashion (eg, by actually describing one's acquisition work and not gerrymandering the details to fit what the institute ostensibly finds acceptable).

It would be helpful to hear from actual WSO members who have a CFA, and received it under the fact pattern described by the OP.

Bona-fide fashion? No matter what you do, if you do not describe your work experience in a manner that the CFAI finds appropriate, it will not be approved. I was pretty clear it will absolutely be fine. Real estate is an area covered by several chapters of the CFA curriculum and any role that involves investment decisions within real estate should be acceptable. If you still do not believe me for some reason, then email the CFAI at [email protected] and they will tell you officially. They should get back to you within 1-2 business days.

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Best Response
Jun 23, 2013

I never understood this discussion. There already exists this little barrier to entry called "taking 3+ years to pass 3 levels of absurd finance minutia with a 1/3 pass rate at each level". I think it's a little overkill to think that after doing that, the CFAI would hose you because you used the wrong adjective to spin your work experience. Not to mention that the more people they get in, the more money they make from membership dues. Finally, as far as "signaling" goes- there is pretty much 0 reason "passed all 3 levels" and "CFA charterholder" should send any different of a signal considering a fraction of the curriculum is actually used in practice anyway.

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Apr 16, 2015

This was really an interesting topic and I kinda agree with what you have mentioned here!
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Mar 8, 2018

Did we ever find an answer to this debacle?

Mar 8, 2018

Actually at some point they changed the guidelines and removed the part about security focused portfolios.

It now just reads:
"Evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process; supervising persons who conduct such activities; or teaching such activities."

Mar 9, 2018

It does....as it worked for me.