Small REPE versus Large AM
Given the choice between an analyst at a large firm on the asset management side working on all property types in the headquarter office or a small firm on a lean team in acquisitions working on just a single property type, what would you take?
Feel like the acquisition is a better opportunity, but I would be the sole analyst working with 3-4 MD/VP. The people on the AM side are cool (feel like people on AM in general are more laid back, which I like) and there is a large class of analyst since its the HQ, I like having the option to go to someone to ask modeling questions / just having an analyst network. Job security feels safer on AM side.
Let's assume pay is same. Still very early in my career, not sure what I want to do.
Maybe bias, but I think acquisitions is the way to go assuming the shop is reputable despite its size and it's doing great deals. As long as you are still doing somewhat of sophisticated underwriting, I think that is more transferable in the long run depending what your end game is. If you are just joining a large AM working on core assets, IMO I think you will top out pretty quickly.
I think it comes down to how risk averse you are. Taking the asset management job at a brand name company only has one real downside in my opinion: it’s asset management instead of acquisitions. The analyst class and network that comes with it, the variety of propert types you’ll work with, the brand name (probably means bigger deals), the fact that it’s the HQ, are all huge pluses. Is there any chance you can move over to acquisitions after you’ve proved you’re a top performer? Edit: I’ll agree with the above poster, if it’s at a core fund like Prudential’s I know people tend to leave there pretty quickly.
Someone who has worked on a smaller acquisitions team can fill me in, but I imagine the outcome of taking that job could vary wildly. It could mean you get tons of experience working above your pay grade, and you’ll be miles ahead of the kids working at Morgan Stanley or Prudential. Or they may not need you to do much important work at all, and they’ll just use you as overflow when things get busy.
I’ve worked as the lender for lesser known funds on a number of deals. Some of them I’d work for in a heartbeat and others I’d stay away from. I’d really do your homework on them. How much money do they have to deploy? If you’re the only analyst, wouldn’t you end up doing some asset management work anyway? Which operating partners or LPs do they partner with?
I think it also depends on your goals. If you see yourself being a managing director at xyz big fund one day, I’d probably go to the big fund. If you see yourself pooling money from friends and family to buy your first property, I’d probably go with the smaller group. I say “probably” because there’s still a lot we don’t know about the two companies.
Great opinions here. Would love to hear more.
The small shop is reputable, it has its own AM, accounting, etc groups so I wouldn't be doing any of those functions. But very lean acquisitions team (hence sole analyst + VPs/MD) and just one property type.
Also what's usually the set up with these structures at smaller firms, if the VP/MD are sourcing, do they expevt analyst to UW all the deals or just loop them in once they think it's a high probability. I can't imagine being the sole analyst for 4-5 people. Ratio of 4-5 VP/MD to 1 analyst seems like a lot of grunt work for analyst. At current firm it's more like 1 VP or MD to 1 or even 2 analyst ( I am currently at large firm).
I'm a big proponent of taking direct experience over brand name when you're young. Underwrite your balls off so your skill-set is premier and then try to work your way up to the best possible firm.
I'd probably lean towards the acquisition role at the small repe firm, it's more direct deal experience that will probably carry more in the future. Does the REPE firm work in several different markets, or just a select few? What property type do they focus on?
However, you do mention you're early in your career and not sure of the longer-term. What are you currently doing and what do you enjoy or dislike about your current role? This might give better guidance on how you choose between the two.
Shit, I would pick the smaller firm acquisitions role even over an acquisitions role at a huge fund.
Currently do portfolio management (was acq, but my firm is not buying stuff and got moved). Nothing wrong with the job, just don't like the culture (not very friendly).
Seems like everyone is leaning acquisitions. I think the only thing holding me back is I feel the people on the AM side are a better fit personality wise, but I guess that is the general theme - you have your Type A aggressive folks on acq. and your nicer more "chill" folks on AM.
Also slightly afraid of the hour differential - the comp is the same, but I feel like the AM is ~40-50 hours/week while the acq is a huge question mark (and nobody to really ask..since I'm the only analyst...)
This is your first gig, I would go with the bigger brand name for 2-3 years before jumping to a boutique shop. You will have more resources to learn at the large AM and you can easily pivot if you have a strong story as to why acquisitions in a couple of years.
Either way, you can't go wrong as long as you think the smaller shop has enough dry powder to last through a recession.
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