REPE --> Corp PE

Gentleman,

Has anyone here made this move before? I'm currently an REPE Analyst and am increasingly being reached out to by headhunters for corporate PE jobs.

While not yet sold on corporate PE roles, I was wondering how difficult the transition would be. I have very strong excel modeling skills and have underwritten many large portfolios and some entity-level transactions (breaking gross asset values down to NAV), but fairly weak corporate accounting knowledge (as you all know, REPE is mainly CF modeling).

Would appreciate anyone's experience with this topic! Thanks in advance.

 
Best Response

Similar boat; I had the Cf and RE stuff down pretty well, and had taken only a few accounting classes in under grad. When I moved to my current role (LP making investments into RE and assets/businesses related to the RE) there was a bit of a learning curve, but it's not much. Accounting is easy if you can memorize the basic rules.

If you could take a primer or crash course on how the income statement, cash flow statement, and balance sheet are related to one another I think you'll be good if they're reaching out to you knowing you have little exp in that space. I think of those three statements basically tell you how the entity is breathing; your financial analysis exp will be important after the basic accounting analysis because you will be able to project and see where the future of the entity can go.

Tl/dr - accounting is pretty simple. It is telling an owner of a business how much they will be taxed and how they're performing. I think it's a valuable skill to have BC owners of RE are always looking to add value through accounting tricks. My 2 cents

 

Skill sets are very very different. In RE PE or public equity, you look at properties as entities. The things that go into valuing RE are very different from how you look at a traditional entity. For one, amortization in RE is pretty different than how it is viewed in a traditional expense. In RE amortization is viewed not as an expense like it is on the income statement of a traditional companies.

 

BUMP -

This is probably happening, so would love some more takes!

More background to consider:

-What if the analyst in question did a "traditional" non-RE team for a year in IBD at a BB? Think Sponsors/M&A/LevFin.

-What if the RE exposure at the REPE shop (BX/Carlyle/KKR) was corporate-leaning? Meaning not just at the asset level but also at the corporate level.

-Also, if distressed debt investments are part of the investment mandate (NPLs, etc), would this position the analyst well for moving into special situations/distressed funds?

 

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