Private Equity Acquisitions Job Hunt
How are monkeys finding the hunt to be going right now?
I'm a recent MSRE grad (December 2020), with a few years of capital markets experience and a year of boutique private equity acquisition experience. Lost my last job due to Corona (debt broker for a ridiculously active / well known group) but managed to find something pretty quickly at a player in a niche product class. I'm an in-house capital markets guy at a developer / sponsor.
Looking to find a seat at some kind of capital allocator / LP and have mostly been targeting roles that invest across asset classes / geographies. Have been working my network / former bosses / former classmates pretty hard and frankly not getting anywhere. Emails from partner at previous job with a rec and a resume sent to shops with posted openings are barely even getting me an email back, etc. Pretty fucking worried that the 'recent grad' shine may wear off soon and I'll be pidgeonholed into the niche space I'm in.
Any words of advice / general strategy / anecdotes on what anyone else is currently finding in the job market? Any thoughts on the pidgeonhole effect? I know everyone on WSO is always saying don't worry you can network your way into anything but in reality I think thats often horseshit (and why I did the MSRE - was previously pidgeon-holed in corporate real estate [managing leasing pipeline and stuff at an end user]) and that it becomes increasingly difficult to unspecialize once you become a niche guy.
How fucked am I?
There have been a lot of posts like this and the reality is it’s tough out there. I’m in REIB and struggling like hell to find something that matches the same description you listed.
The “you can network into anything” mentality was probably true back when the RE world was booming in 2017 and 2018 but things are tough out there right now.
Unfortunately the real estate job market isn’t correlated 1:1 with the stock market. RE firms had been hiring and raising money like crazy in the run up to corona. Now there are qualified unemployed people and a backlog of qualified people who probably would’ve left their current job back in mid 2020 but weren’t able to due to covid. It’s just rough. Be grateful you found a new job quickly
Appreciate the data point, and believe me, I'm thankful to be working and earning a pretty decent living.
I guess what I'm most worried about isn't the current grind and having to delay my move to another shop by another x number of months. More that at some point very soon, I'll be stuck in a tiny niche vertical and won't have the optionality to make moves. I feel like there is this grace period of 6 months pre and post MBA/MSRE graduation where employers look at you differently and are a little more open minded about similar/transferable skills and I feel like my window is more or less being sapped up by the state of the market.
I know WSO trends ridiculously young, but if there were someone who maybe went through something similar in the '08 cycle who could provide some perspective on how it all worked out with your recruitment window being overshadowed by a large economic shock, I'd love to hear anything you might have to say.
Also, while my post says PE, the reality is that any capital allocator seat would be fine with me - Lifeco equity, an Asset Manager, etc, etc. I want to be seeing a large volume of deal flow across geographies and food groups and don't quite care so much about 'prestige' or even necessarily maxing my current comp ( I frankly don't think I'll take more than a 10%-15% bump from my current role in any case).
Honestly, this term and worry that surrounds it is something I never really thought of until I saw it used so often WSO. For background, I've been in the CRE industry in some format for about 19 years (I worked full-time during UG, so I'm not as old as my yrs of exp would suggest). I've shifted format/roles/industry-sub-type a few times during that time, most aggressively due to the 08 GFC (this will be true for many people who started before 08).
So, I know a lot of people and their backgrounds/career trajectories. I can confidently say, the "pigeonhole effect" is at least 95% enforced or an issue of the person/prospect and only 5% of the time an actual concern of the prospective employer. Believe or not, but diverse experience across niches and roles can be very valuable in high performance situations, plus most hiring decision makers can personally understand motivations to jump roles/fields at various parts of careers (alas, my observation... it's normal). At the end of the day, you get hired for really one reason..... You can do the job, add value, and are viewed as a contribution/good fit for the firm. If you can convince someone of that, you get the job.
Thus, WTF is the "pigeonhole effect" if one even exists? It's the fact that your personal value (i.e. highest and best use as we say in the industry) is probably maximized by leveraging up your past/current job experience. Meaning, you might make more money, be more successful by moving for promotions and upward moves within your current industry/field/role than "jumping". So people stay and make vertical moves, which can be very smart. If you see how career tracks converge at the top towards senior leadership roles, you really may want to hang in to get to senior/exec roles (this is very observable in general buyside firms incld development). Jumping often requires a lateral or sometimes even a downshift, and very frequently a "reset" of the counter towards promotion or just general gains in responsibilities/seniority.
This is why people actually "jump" more often than not when forced to. This can be due to layoff, economic collapse, or even personal forcing by doing something like going to grad school. When you are employed, it is much harder to do so unless you get so pissed off/disenchanted that you basically are ready to just quit. Then it suddenly becomes much easier.....
So, I really don't know what to say in your personal situation, but don't stress it. Not sure what your "niche" is, being in-house cap markets for developer/sponsor sounds about as un-pigeonholing as I could think of. I mean, capital is capital, whether you are building nursing homes or office towers. Maybe you need to rush out of this job, maybe you don't. Either way, I cannot see why you are not making forward progress in your career right now, which is really all that matters.
First, thank you for your response. I appreciate the perspective.
I guess my thought process is that CRE has significantly changed from the era in which it was not quite institutional. In this day and age, people put up a job looking for someone with 3-5 years acq experience and get 100 resumes from people with 5-7 years acq experience who'll happily take the job, so no employer is going to want to take a chance on someone from a different vertical or looking to go from debt to equity when they have a much more justifiable hire in front of them. Feel free to tell me I'm completely wrong here, but from the anecdotal tails I'm hearing, employers have been able to dictate their ask for a couple of years now and even before Covid struck and will likely continue to be able to for at least a few years given where the overall economy is.
As it relates to my career progress, I guess it depends on what you call progress. I've earned the trust of my superiors and am trusted to more or less operate on my own with limited bullshit and limited external input. I'm making more money than I ever have before while working whats as close to a 9-5 as exists for an associate level pro in our business, but frankly, the pathway in the niche that I'm in isn't great. It just isn't a very strong business to be in, is extremely cyclical, and has little downside protection. The publicly traded players in the space (including my firm) all have massive debt to cap ratios and high yield status bonds. I'm not surrounded by the best and the brightest and I probably understand more about the capital markets than my boss does (whos a guy with a treasury background, so its not like its his core competence). I'm not saying this to puff myself up, I was an average/"mid-bucket" performer in previous roles and would likely be at another role in an analyst/associate sort of capacity, so its more that I work for guys who don't really have any institutional experience and don't necessarily understand the market (and definitely don't understand risk). Again, our debt to cap ratio is well north of 100% and our bonds trade at double-digit yields. Its niche enough that there are only about 8-10 real players in this space, and without a ton of competitors, my best chance for career progression is just sitting in my seat and hoping that as people retire and other people move up that I can then pounce on an open seat. Thats a lot of risk to try and fight for the one or two seats ahead of me, if it doesn't work out than 10 years from now I'm a practically 40 year old guy who likely can't transition to another space at that point. At the higher band, this will pay considerably less than me moving to another sort of shop and rising there instead (my boss likely earns half what he would in another vertical, maybe even closer to a third).
So to summarize the soliloquy I just went on, its that in my limited scope and limited experience, I feel like its difficult to be able to transition once you get labeled a 'student-housing guy' or an 'SFR guy' or a 'mobile home guy' and with the way the market looks right now, I'm afraid of getting tagged like that and hoping to hear from some people who have either been through the process of being tagged and managed to work their way out of it or from people on the hiring side who can talk about when/where in certain opportunities they made hires that didn't exactly fit their bucket but decided to take a gamble on someone. I suppose part of this is also just venting frustration at what feels like some bad breaks.
I think I get where you are coming from, good role/pay/work-life balance, but don't really see a long-term trajectory (if I misinterpreted, say so). If you just at the associate level (which I think you state more or less), then you really don't need to rush out of this role. Apply/network for stuff in the background, but I really don't see the need for the panic (but kinda get the frustration, you are not where you planned on being).
If you are open to long-circles towards your planned destination, you could "jump" over to the sellside at some point. Not sure if a good idea, but may reopen your pathway. But frankly, not sure if that solves anything. Personally, I would be patient at this stage. Making a jump just to make a jump could really be sub-optimal. I really doubt a few years in this role will change your long-term prospects, hasty jumps in such a weird job market (and well real estate market) could. If you get a great offer, clearly take it, but this should be a strategic not random move.
Finally, to respond to your first statement about 100 resumes from over-qualified people.... that has been true as long as I can remember. BUT, it does become more true after or in the middle of downturns (or well anything that causes layoffs). Online job postings draw 100x the needed number of candidates, and many meet the minimums for consideration (like if you see UG req, grad preferred, you can pretty much assume only resumes with grad degrees get looked at). This is why having even a low ranked friend at the firm you are applying to can make worlds of difference (hopefully your school alum can be useful here).
I know at my firm, if I send a note to HR saying "hey just spoke with this rando from LinkedIn, seems smart and good person, just my two cents", that resume will get actually read/reviewed by the HR person and probably sent in the stack to the hiring team (if I say something like "know this person personally, they are legit awesome" then they will practically be guaranteed at least a phone screen with HR). Just that small bump probably jumps your chances for interview up like 1000%, that's the kind of game you have play in your situation.
So, just hang in there, rely on your connections and mentors, network like nuts (hopefully conferences and happy hours can start before too long). Give up the BS of feeling like you're fucked, that is beyond silly at this stage!
I agree with @redever, don't be so worried about being pigeon-holed right now. You seem to have a decent spot and most people hiring will understand the situation if/when you are ready to move along (you may find that you just really enjoy your current spot and don't want to do acquisitions any longer).
I've interviewed candidates for dozens of spots over the years and you would be surprised how many times someone with a non-traditional/quirky background gets picked over "perfect" candidates.
For one of the spots we hired last year, we passed over 2 candidates from really well respected shops that resume wise were "perfect" for someone from a smaller shop with less investment experience because we felt he would be more adaptable/trainable than the others. And he was a website applicant, not through our head hunters or a reference.
Thanks Cheese, appreciate your response. I guess I'm heartened to hear that you looked outside the box a bit for your hire. Could you expand a bit on why you felt the candidate you hired was the right person for the job? So I guess to cut through it, what I'm asking is, what qualities did your firm value enough other than direct experience that the candidate you hired had?
The main concern for us was that we are a newer debt fund and while we have extremely good sources of capital/senior level backing the team is small and therefore operates using a "jack of all trades" approach. We don't have regional or property type segmentation and originations takes point on everything through closing (underwriting, IC presentation, doc negotiation, funding) and AM comes in afterwards (draws, risk/valuations, modifications/workouts, payoffs/dispositions). Most of the big name shops have more segmentation and we wanted someone who had a wider viewpoint that we felt would be able to handle our approach.
I'll mention that I sat in on an interview panel for hiring in the equity side recently. Of the 4 I spoke with, 2 had previous acquisitions experience, one was a broker and one was in development (we put a lot of $ into development on the LP side). I'm not sure who the offer is going to go to, but I was actually more impressed by the dev guy than the acquisitions people because the dev guy had a interesting market prospective vs. the acquisitions people that had been more focused on specific sectors.
Also, for another reference point, I'm around the same age as @redever (I'm in my mid 30s) and came out of school in 2006. I spent the first part of my career in servicing/valuations, but now lead AM for a debt fund. There are tons of ways to get where you want to go. The decisions you make in your 20s do not dictate the rest of your career.
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