Wanting to move into REPE but dont want to take the pay cut
Throwaway account but I'm a 1st year IBD associate in London, base £90k and bonus around 100%.
I'm currently recruiting for REPE associate roles and have received a couple offers from some respectable names i.e. all in the preqin top 100 list (although none in the top 10 of the list) and also interviewing with a few others in the list as well.
All these firms I'm in the process with are offering base salaries between £80-90k for investment associate positions with target bonuses of up to 50%. Therefore, I would be going from a total comp of £180k to approx. £120k+, which is around a 40% pay cut?!!
Although I'm extremely interested in REPE and would choose it over IBD, I just can't seem to justify taking such a huge pay cut which I assume would widen even further later down the line at the senior levels i.e. 3rd yr associates at my bank make above £250k total comp whereas I doubt 3rd yr associates in these REPE funds will pay anywhere near that if they're only offering just over £120k total as 1st yr associate.
Is this normal, do all REPE firms (excluding the megafunds) pay well below IBD? I know it depends on the fund, but I just wasn't expecting such a pay cut. I don't want to sound like a douche suggesting all I care about is money, but is this normal or have I just been very unlucky and been interviewing with the REPE firms that pay low? Or maybe it is different for London to the US?
FYI for all you US folks, the figures mentioned are all in GBP.
If this is normal, did any of you folks that took the big pay cut ever live to regret it? Are you happy you took the large pay cut to move into REPE? I only have a couple of weeks to decide on the ones I have an offer with.
Thank you.
Lol I just went through this 2 years ago. Left REIB and went into REPE. My all-in at my new REPE job was my salary at the REIB job and I essentially took a 25-50% paycut depending on the bonus. I don't regret it, but I completely understand why someone wouldn't want to do the same thing I did.
My hours are better, I enjoy the perspective from which I look at deals much more. My work is much more diversified, and I've learned a ton. Now, 2 years after leaving my last job, after a pay raise and a promotion, I'm back to what I was earning 4 years ago as a 2nd year analyst... ha... Whatever, I'm much happier now and that's hard to put a value on. If I wanted to go back into that world I could do it tomorrow.
As you said, the megafunds aren't like that. I can think of 3-5 shops here in the US where I would have kept my pay or even earned more but I swam way upstream when I moved jobs and wouldn't have been able to land those megafunds. Now I probably could but I'm asking myself if I want to be unhappy working those insane hours again. It's really preference.
But, but, WSO said I need to work 80 hours a week and love it to be happy....
Interesting, but is it "the" Goldman Sachs? Otherwise, I don't care.
Then don't? Rarely do "what you want to do with your life" and "what pays the most" overlap perfectly. Just ask journalists, teachers, artists, etc. etc.
My opinion is that you should be thinking of earning potential down the road. Obviously, do what you love, because half the pay is worth it if you enjoy coming into the office vs hating it.
My personal take is that there is room to make a lot more money in real estate than in finance. What's you plan in IBD? Spend the next 40 years there, end up making a few million a year as an MD, and sit in the same office every day watching the juniors come and go every couple years? If you move to REPE there is a very good chance that in ten years you're in a position to be a decision maker, with real equity in deals. Taking a few points in every deal your firm does is far, far more valuable than the 40k pay cut or even the salary differential down the road.
Yes, this is the way I looked at it. Plus it's much easier to do deals on the side in real estate. I mean, anyone can do them no matter what industry they work in, but when you do real estate all day long and have a large network in real estate, you can find better deals and have an easier time raising capital than if you don't...
My old boss probably made more off the deals he ran on the side while in the office than he did from his job.
How was that viewed in the office that he was running deals on the side?
This. It's so easy to fall into the trap of being short sighted and I know we all fall victim to it at one point. At the end of the day, the ability to either start your own shop or reap rewards from years of connections is a much easier model to replicate than one in IB or other insert high finance role here.
Dolorem a est voluptatem illum. Sit earum vel magni cumque sint illum laudantium. Qui quo laudantium et aut voluptas atque.
Ab eveniet illo rerum cupiditate et. Harum provident explicabo eligendi voluptatum nemo. Explicabo sit quasi voluptatem esse quo ut officia. Vitae quo quos et facere. Autem qui quas ut ut aut dolor recusandae.
Maiores in exercitationem est id. Aperiam debitis sit incidunt facilis sunt deleniti atque. Ipsam odio aspernatur sunt.
Laudantium maiores quasi rem atque temporibus. Quaerat facere dolor esse ut qui inventore totam accusamus. Qui sequi qui magni quod aliquid.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...