RE Acquisitions at MF vs. IBD at BB

Hey guys,

Am an undergrad considering RE Acquisitions at a MF and IBD at a BB.

After doing research on RE in general I am more inclined to pursue it but am held back by future prospects in PE post IBD.

One of the biggest concerns is that I'm unfamiliar with the career path for someone starting off in RE Acquisitions in a MF and what compensation for REPE looks like down the road as compared to traditional corporate PE.

Can anyone provide some insight?

Thx

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Comments (6)

Most Helpful
Jan 8, 2019

If you're at a PERE Top 25ish firm you'll probably get paid relatively similar to an IB Analyst on average, with some firms (Starwood for example) paying significantly more and some paying significantly less. The standard deviation between what different REPE funds pay is a lot higher than it is between banks on the Street.

As for career trajectory, if it is truly a Megafund you will work on very sophisticated deals and gain rock-solid technical skills, in addition to having a killer brand name on your resume. Only situation where I would tell you to hold off is if you only want to do REPE for the PE part because you think it sounds prestigious. Real Estate isn't for everyone and when you go into REPE you're starting a career in Real Estate moreso than you're starting a career in Private Equity. This is somewhat mitigated if you're at a global allocator doing portfolio level transactions/financing, but still is something to keep in mind.

    • 4
Jan 8, 2019

From what I understand, REPE God is absolutely right. In REPE, you're starting a career in RE rather than in PE, meaning this can transition into other parts of RE such as brokerage, development, RE banking, etc.

On average, you will definitely make more in the traditional finance route (IB -> corp. PE), but the goal in RE is to gain ownership in the deals you're doing - possibly opening up your own shop and going out on your own. That is win you have the potential to make boatloads more, especially if you go off and start developing RE. But these are two very different career paths, so I wouldn't factor in pay that heavily when making a decision. Bottom line, you can make a shit-ton in both, and will most likely be living at least very comfortably in both.

Keep in mind, it's pretty normal for people to go from traditional finance to RE whether it be REPE or some other function of RE, but not normal (pretty much impossible without grad school) to go from RE to traditional finance.

Jan 9, 2019

Would you still say that expected pay for him is higher going the IBD BB route, assuming it is a "true" MF like BX, Starwood, Apollo, Carlyle or TPG? One also has to consider that BB can be UBS or Deutsche an not MS/GS...

Array

Jan 9, 2019

If you want optionality I'd go with the IB role. If you don't 100% want real estate than go IB. You can definitely make the switch from IB to REPE, or another real estate related role. Not uncommon at all for Related, BX, or other top funds/RE developers to hire IB analysts from non-real estate groups. You will have a hard time getting out of RE if you decide you want to go into regular PE. Going from REPE to PE seems really tough

    • 1
Jan 9, 2019

BB IBD gives you optionality and solid training ground. If you're dead set on RE Investing then go for the REPE if it's a top shop. If it's good, but no great, you might find yourself in a better position after doing BB IBD for a year or two.

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Jan 11, 2019