I'm currently a SA at a EB, and I'm becoming more interested in REPE. However, not many people from my target school even know about this field, while many want to break into corporate IB/PE.
REPE seems to have the perfect work/life and pay balance. Is it soley because the banking jerks aren't interested in anything beside IB?
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They aren't exactly the same, there are far fewer REPE positions, and REPE has a tendency to corner you in the real estate industry whereas people can exit to multiple career paths from IB.
For sure. If you know for sure that real estate is your calling, REPE is the way to go (if you can break in), but definitely limits the exit opps from a pure numbers standpoint. Then again, most of the folks I've met in real estate absolutely love real estate, and really wouldn't consider IB/corporate finance much. Doesn't get the juices flowing the way that literally building/investing in cities and communities does
Yep, the main factors are:
(i) Fewer spots (ii) Less prestige (dumb reason IMO) (iii) More limited exit opps (iv) Less standardized recruiting process (v) Less standardized career trajectory (vi) Lower initial comp (vii) Few schools w/ RE programs, many w/ finance programs
In REPE the hours range from good to really bad depending on the firm, and the pay doesn’t always scale accordingly. You can work terrible hours for mediocre pay if you land at the wrong firm.
My point is it’s not always the perfect work/life/pay balance, although I’m sure you could find firms that have the perfect balance for you if you ask around.
It is much more difficult to break into REPE
It's very very difficult to break into legit REPE if you are outside of New York. Limited opportunities, enormous competition, and hiring through connections and word of mouth.
Yes and no. A lot of those companies have offices in major cities throughout the country, or are based there to begin with. There's equity outside of Manhattan
If they do have satellite offices, those offices carry far less analysts (typically). Also, much of the equity outside of NY is family office money and these firms do not openly market positions. They may headhunt (how I got my job) but these opportunities are scarce (see LinkedIn postings for example - compare NY to everywhere else). A large amount of family office analyst gigs go to the sons of HNW investors in the funds or other political hires.
I should add the caveat that I went to a public university with no MBA. Someone with a Wharton MBA (or similar) may have a different experience breaking in.
Usually, there's three types of people interested in real estate:
my father is in real estate on the global level (e.g head of a large asia real estate conglomerate, major developer in NYC). typically hired at blackstone, starwood, etc.
my father is in real estate on the national level (e.g smaller, but still well known, industrial real estate developer in st. louis). typically hired at crow holdings, etc.
my father has a good chunk of his retirement assets in real estate (owns a couple of shopping centers, residential real estate, etc.) typically hired at no name "psuedo" REPE shops. slim chance of advancement as your father provides no value to the firm. even at smaller shops, what value can you add to the firm? Do you have the ability to find additional capital? or are we gonna use to do our bitchwork.
Generally speaking, real estate is a very nepotistic industry. Yes, there are always exceptions to the norm, but real estate firms generally look for students who themselves can be prospective clients in the future (or not to piss off their fathers who may already be existing clients...).
Because there are very few firms that pay similarly to traditional corporate PE, its very tough to find a high paying REPE gig. There are few very open analyst/associate positions at the top REPEs (typically 2-3 a year). Even at top targets, its usually heirs to major real estate fortunes who are nabbing these jobs rather than the 'more qualified' applicant. For the average unhooked finance aspirant, the 'expected value' is probably higher going down the traditional PE path.
Interesting take.
Just curious, you don't think this is changing at all due to Real Estate, especially CRE becoming a more institutionalized asset?
Maybe?
~50% of the people I meet in the industry also have family in the industry though
This guy was mostly joking. Nepotism is more common at owner/operators and developers because a lot of them are family businesses.
At PE funds and public REITs it’s less common. I’d say there’s no more nepotism at PE Funds / REITs than any other branch of finance or business.
Banking Jerks.... Lol
In addition to what was said above...I don't think it's nearly as sexy for most people, and to be really frank it's not on the same level.
REPE does not get as complex as something like biotech/healthcare focused PE plays.
Industry pay reflects that.
Is anything in finance considered sexy other than the paycheck?
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