Is CRE Debt Experience Pretty Enough for PE?

To those senior chimps and chimpettes in RE PE, or anyone with any insight at all... hopefully any responses to this would be helpful for others looking to exit out of CRE debt.

I just passed 1.5 years at a boutique (45 empls, ~$7.5BB balance sheet) debt shop and thinking of exiting to PE. I think I have enough experience to be at least somewhat attractive to most shops, and the soft feedback I've gotten from general networking has been positive. For context, I'm on a team of 3 (me, VP, MD) and we've closed a proportionately very high volume of deals in both bridge and CMBS debt in nearly every asset class. Moreover, I imagine I have above-average responsibility/exposure as compared to analysts in traditional CMBS/LifeCo shops - but then again, how valuable is my incremental experience if at all? I have strong modeling skills and experience with wild business plans and timelines, but very little exposure to Argus (I took a two-day introductory crash course but no real on-the-job experience).

Some questions that linger as I get more serious about exiting:

  • Would I have a shot at joining an acquisitions team or will I be relegated to AM?

    • Does this vary by size/reputation of shop?
    • Should I expect most PE shops to require AM experience before moving to acquisitions?
  • What portion of gigs are a blend of both acquisitions and AM?

    • Same as above - I imagine larger, more reputable firms would bifurcate into separate teams.
  • I have limited Argus experience but don't use it for my day-to-day (we use our own internal excel models); Would a RE PE firm require expertise with Argus or can I anticipate a learning curve on the job?

  • I currently make $80K base and am told to expect $40-$60K bonus for my first fiscal year; can I expect a bump in pay for my first year at PE?

  • How many years at a firm is standard before I can expect an equity slice?

  • Having only 1.5 years' experience since graduating undergrad in '18, would I be considered for an analyst or associate position?

    • Varies by shop? Do responsibilities really differ that much?

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Comments (3)

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Dec 30, 2019 - 9:01pm

Similar position as OP, I previously worked on CMBS originations for ~1.5 years and have recently transitioned into a relatively small albeit strongly growing REPE firm. Here are my 2 cents:

  1. If you are looking into RE mega funds that typically engage headhunters (i.e. Starwood, BX), then your positioning would be weaker than the typical REIB analysts who cover REITs and companies (crazy since they don't deal with the actual real assets but the IB title alone gets them lots of nodding from recruiters). So I wouldn't recommend this route unless you networked like no one else and are prepared for the competitions ahead.
  2. Based on my observations from people in my group who made exits to REPEs, they typically done it through intensive networking (contacts from deals/friends/family,etc) and the firms they jumped to are mostly regional, vertically integrated REPEs with carry potential. And they would be dealing with both acquisitions and AM on a come-and-go basis, as opposed to megafunds where your responsibility are more defined. Having interviewed with such firms myself, I found them generally receptive to my background in actual Property underwriting and Argus. Also, a concentration in RE path demonstrated by your past experience would be a huge plus, contrary to these REIB analyst with a degree in Econ and just so happened to be placed in a RE group in the first place.

Hope these make sense to you, and happy to discuss further. Good luck!

Dec 31, 2019 - 1:36pm

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