How are you staffed on deals?
Every real estate private equity fund has a staffer. Sometimes it’s a formal role and sometimes it’s informal. If you’re on a larger team, the staffer knows who is working on what and how much effort each project requires. Being a staffer is not an enviable job since they have to give everyone their work, and most people are already pretty busy. However, working as the staffer is a rite of passage that most acquisitions professionals are tasked with as a side role when they reach vice president. So go easy on your staffer, because one day you’ll be in their shoes!
What are the hours like?
Different teams at the same fund can have drastically different hours. In my experience, it’s pretty easy to tell which teams are more relaxed and which teams are more hardcore even when netowrking. The people who work crazy hours nonstop are self-evident in their mannerisms. I’d say just go with your gut. For instance, people emphasize work-life balance and weekend activities during networking calls and interview chats are probably grinding a bit less. I would avoid asking this question head-on in networking, unless your interviewer brings it up themselves. Then it’s fair game to discuss.
But even on the same team, hours will fluctuate. The most important variable is how active your deals are. I will say that the standard expectation across all real estate private equity funds is that a live deal requires all hands on deck. Senior and junior people alike work nonstop if something is in an execution phase. First round bids usually don’t kill weekends, but if you’re coming up against a hard deadline then you probably shouldn’t make any important plans.
I will say this – don’t work in real estate private equity if you aren’t ready to give up years of your life to primarily living in an office. Even the teams with more modest hours work considerably more than 40 hours per week.
What do you work on?
This really depends on the firm. At a megafund, you can be sector-focused or sector-agnostic. If you’re sector-focused, expect to become really talented at underwriting one asset class. If you start as an analyst on a hotel acquisitions team, you’ll probably know a lot about hotel underwriting yet less about corporate modeling. On the flip-side, if you’re underwriting public acquisitions, expect to learn a lot of accounting. When interviewing, you should prepare for the proper real estate private equity case study depending on the team. Fortunately, Leveraged Breakdowns has you covered either way with our suite of educational resources and real estate private equity guides.
So which is better, asset-level or corporate-level work?
I’m not going to disparage either side of the REPE universe. However, my opinion is that asset-level work is really beneficial to junior analysts. Nothing wrong with starting out with corporate underwriting. Yet if you have the option to learn about asset-level underwriting, I suggest you start with that.
The reason is pretty straightforward. In real estate private equity, it all boils down to the underlying real estate. So no matter how fancy you get with a corporate model, it’s really all just a roll-up of various assets. That said, corporate modeling knowledge is essential to execute big, flashy M&A deals. It’s just that learning the asset-level underwriting skills early will translate into benefits even when modeling corporate deals, but not so much the other way around.
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