What A Real Estate Investment Associate At A Wealth Management Company Wishes They Had Known Before Entering The Investment Industry
Geoff, a Real Estate Investment Associate, learned that in institutional investing, "there's not a lot of room at times to deviate too much from what competitors are doing," limiting creative strategies. This herd mentality prioritizes following market trends over contrarian approaches, impacting the career path of investment professionals.
Industry Realities, Workplace Challenges, Hard Truths, Candid Advice, Investment Strategies
Advizer Information
Name
Job Title
Company
Undergrad
Grad Programs
Majors
Industries
Job Functions
Traits
Geoff Esmail
Real Estate Investment Assoicate
Wealth Management Company
University of Arizona
UCLA & MBA
History, Art History
Finance (Banking, Fintech, Investing)
Finance
First Generation College Student
Video Highlights
1. In institutional real estate investment, there is often pressure to conform to market trends and avoid deviating from competitors' strategies.
2. Creativity in deal structuring (e.g., leasing) is possible, but overall investment strategy may be more constrained.
3. Contrarian investment approaches can be risky; failure can damage reputation more than if following the majority's strategy, even if the majority also fails.
Transcript
What have you learned about this role that you wish someone had told you before entering it?
One thing I wish someone had told me, especially in the institutional investment space, if you're going after pension plans and similar investors, is about the herd mentality. There's not a lot of room to deviate too much from what your competitors are doing.
There are certainly more creative and fun strategies out there. But if you don't have a big name behind you, which allows you to easily raise money and implement creative strategies, it's really tough.
Institutional investors essentially want to see that you're not deviating too far from what others are doing. They hear that everyone is investing in a certain type of product and want to know why you aren't.
Being contrarian can be difficult. I wish I had known this beforehand to be better prepared. You might think you can be super creative with your overall strategy, not necessarily the deal itself.
You can be creative with how you lease things, but overall strategy, like pursuing certain product types or using leverage differently, is where creativity is limited. If you're contrarian and fail, you have a big egg on your face and your reputation suffers more.
If you fail while doing what everyone else is doing, at least you're with the pack. I think that's part of the problem; there's a bit of that going on.
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