What are the Roles within Real Estate Private Equity?

Anon163862's picture
Rank: Orangutan | 337

Hi I've seen a lot of discussions on REPE I.e people working in REPE Asset Management wanting to move into REPE Acquisitions etc.. but I don't fully understand the differences and what the key roles are within Real estate private equity?

Please could someone explain what the key functions/sub divisions are within REPE and explain the differences e.g. asset management vs portfolio management vs acquisitions vs investing etc.. and also what the differences in comp (both in terms of base/bonus and also carried interest) would be, and also what area would be best for exit opportunities.

I've seen a similar thread below however it doesn't go into the specifics I was after and differences in comps and exit opportunities I.e if you wanted to move into corporate PE i.e an LBO or growth equity fund later down the line which division would align best https://www.wallstreetoasis.com/forums/roles-withi...
Thank you

Comments (9)

May 3, 2019

This has been talked about at length in these forums but I will give you a brief overview.

Figuring out what REPE means is a crux within itself. A lot of people will tell you that REPE only refers to capital allocators partnering with GPs as their LP equity. Others will tell you GPs are REPE too. I don't really have an opinion, because who actually cares.

Asset Management: refers to the strategic execution of the business plan put in place by the acquisitions team. IE: executing capital projects, refinancing the project, disposition analysis, anything tied to keeping your building occupied, imo its an operations position at a much higher level

Acquisitions: refers to exactly what it sounds like. Pursuing marketed and off market deals that fit your fund's investment criteria, return thresholds, and equity limitations. An analyst role in this position is typically responsible for underwriting the deal, composing investment memos, (if you're lucky) sourcing deals, presenting your valuation to SR leadership on your team, sifting through financials and figuring out where your firm can extract value from the property and position it for a sale down the road.

Granted take all of that with a grain of salt because every real estate company is set up different and positions responsibilities differently based on numerous factors.

Comp is the unknown for everyone. I suggest you find the Google Doc @CRE12345 set up for people to plug in their comp info to give you a good idea. Though as you will find, a first year analyst can literally make anywhere from $45k to $145k.

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May 4, 2019

What are the main differences between REPE and real estate investment management?

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May 4, 2019

RE Investment Management isn't a standardized term or phrase. REPE is RE Investment Management in the literal sense. Not to be a dick but all the young gunners on this site need to start doing at least a base amount of google leg-work before asking shit like this. I mean come on dude, that's a retarded question. Run a few google searches on different types of real estate investment vehicles and come back with a well-informed question and someone will piece it together for you.

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May 4, 2019

Hey man chill out. Im an undergrad civil engineering major with limited financial knowledge. I've done all the google searches as such. The reason I asked that question is because of this thread where a poster said there was a distinction between pure REPE and RE investment management. Don't really understand why you're so angry. Not everyone comes from a finance background and I did google but I wanted more clarification.

https://www.wallstreetoasis.com/forums/difference-...

May 4, 2019

Lol, I said 'not to be a dick' at the beginning. I'm just saying you gotta get better at educating yourself, for your own sake, or else it's just not going to work out for you.

RE Investment Management is a really broad term. You can be managing RE investments from a third party property management firm or from Blackstone's Asset Management department.

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May 4, 2019

Thanks. I know it was a dumb question but thanks for the clarification. Just was a little confused.

May 4, 2019

usually not referred to as "REPE" but technically there are also portfolio management analysts/associates that are farther away from the assets and deal more on a portfolio level

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Most Helpful
May 5, 2019

Roles/Departments in a Large REPE

  • Acquisitions ("feeds the funds" with deals; some dedicated to asset specific arms like multifamily development or programmatic JV relationships with national developers, if there is a lot of deal flow)
  • Asset Management (sometimes you have asset specific arms)
  • Portfolio Management (works closely with AM and capital raising)
  • Capital Raising (they have great insights on capital flows as they talk to the sources of funds)
  • Research (writes "we are smart" papers; usually lead researcher has seat at investment committee)
  • Dispositions (some larger REPE have a dispos team; they harvest the investments; "need to feed" the brokers)
  • Specialized roles: lead underwriter (checks all the investment committee memos/preps key questions), mezzanine debt lending (higher yield debt; yield to maturity, loan to own, spreads), merchant banking (can be ambiguous in what they do, I've noticed), trading (REITs hedge fund), corporate sustainability
  • Support Functions: accounting, treasury, legal, admin, HR, compliance

Titles (Acq/AM)

Analyst
Associate
Director / VP
Managing Director

I believe your best exit opportunity depends highly on your skill and personality. Some people are really good at one thing and their personality matches so being silo'd into a role is their best move. Others are different / unique or have a mix of unique strengths and they may thrive in a different role or organization. Large REPE's tend to have a lot of internal brokering and influence pedaling (as you advance), which may match your personality or not (i.e. politics). There are power plays; golden boys/girls (folks with the stars aligned for rapid promotion), coups and fallen stars, all your Game of Thrones strategies (I'm more John Snow / The Hound; not a sneaky little shit in the words of The Hound - love that guy). These firms can be brutally efficient, meat grinders, and mold you and strengthen you (or break you down or lead you to seek something different - I've seen a big sample size of life paths). It's a fantastic place to test your abilities and resolve with smart, ambitious folks (at the Analyst level; 30%-40% come from "real estate families" in my personal observation), so connected people with fall back jobs (or their ultimate goal to take over family business after they've been forged by fire). It's also a great place to find what and where best you fit in the industry since the roles in a REPE has a lot of transferable skills to Development, smaller firms, and even your own company if you start one. The future success of the brand you work for carries over with you through your career as an alumnus.

A couple attitudes/personality traits really helped me excel at the analyst level:
- having a little fear that someone else wants my chair
- double/triple check everything; attention to detail is so key; having a good memory for numbers and deal points really helps in knowing your shit (perception)
- bring something different, original ideas (I have high artistic/creativity/big picture traits which is sort of unique for finance)

I disliked office politics, non-meritocracies, being silo'd, as they are distractions from getting work done. The great thing about our industry is there is usually something for everyone, as the field is pretty entrepreneurial and there are wide variety of places to work. A lot of your outward/external personality can be learned/coached to fit so you are not entirely captive to fate/destiny (but a lot of your internal interests are hard to change).

I've been thinking about personalities lately as I am hiring employees. Check out iworkzone (Jeff Yates).

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May 4, 2019
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