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Real estate investment Banking interview

Banking Investment / July 17, 2016

What were your expectations going into the interview?

There was not a lot of information on the internet with insights into private equity interviews. I found a few sites which described the more common aspects of PE such as M&A, and LBOs, but not a lot of advice for the interview process for real estate private equity. I really didn’t know what to expect. Since I was interviewing with one of the top tier real estate PE firms, I was able to research a lot of information on their existing portfolio and deals they’ve done in the past. I spent a few days studying valuation and current investment trends with the goal of demonstrating my understanding of the real estate business.

How did you prepare for the interview?

First, I reviewed all the transactions I’ve worked on. I did not come from a private equity/investment banking background. My background has been in real estate and consulting. During my interview preparation, I wanted to highlight the valuation work I’ve done for various assets in markets throughout the United States. I studied the company’s portfolio and highlighted my due diligence experience and valuation work to demonstrate my familiarity with the asset types they invest in. Since this particular firm invests in all types of assets, studying was not an easy task.

In addition to knowing my resume and highlighting the work that I’ve done for well known clients in the industry, I also went over basic questions which I expected the interviewer to ask:

  • “Why private equity?”
  • “Why do you want to leave your company?”
  • “Where do you see yourself in five years?”

I wanted to convey to the interviewer that I had the experience they were looking for and that the opportunity was the right career move for me.

The 1st Round Interview

Based on my experience and that of others I spoke with, getting the initial interview is the most difficult part. Since private equity firms run a lean operation, they outsource a lot of their recruiting to headhunters. When I applied for the position, all the description said was “real estate associate with blue chip firm”. After the recruiter contacted me and asked me a few questions about my background, he then informed me that it was with a top tier real estate private equity firm. I’ve spoken to friends who’ve had the same experience. The recruiters will not state who the company is until they speak with you. Don’t be afraid to apply to job postings with confidential names because more times than not, you’ll be surprised by which company it is.

I was told by the recruiter that I would only be meeting with one of the managing directors of the group. Fortunately, the firm’s website had bios of the senior management so I was able to study the MD’s background which I could use to ask questions or as a conversation starter. I spoke to the recruiter who had experience placing people at this particular firm and his words of advice were:

  • Know the transactions that you’ve worked on
  • Be able to explain why you want to leave your current position for the one they’re offering
  • Be able to tie in your experience to their expectations and description of the position, so that it’s in line with what they’re looking for

I show up to the firm on the day of the interview and they sat me down in a conference room. As I waited for the MD, two people enter the room and introduced themselves as two VP’s at the firm. This threw me off a bit, but luckily I studied enough to feel prepared. The initial question was to walk them through my resume. As I was walking them through my experience, they would ask questions on particular transactions and valuations that I’ve done. Questions included:

  • “How do you value a [insert asset class]?’
  • “How do you get market information?”
  • “What is the most complicated asset class to value and why?”
  • “Do you know ARGUS?”
  • “How well do you know excel?”
  • “Do you know waterfalls?” (Be able to explain this, it’s a common question)

After I walked them through my resume, they explained to me the structure of the group and how it operates. For the most part, the questions weren’t as tough as I anticipated. It felt more like a conversation than an interview. Real estate PE firms like the one I interviewed with have a small team. Fit is very important for a group of that size. Since you’ll be working closely with members of the group, even if you know real estate, if the interviewers don’t get the sense that you can fit in well with the group, your chances of moving onto the next round is in jeopardy.

After my interview with the two VP’s, I then met with the MD. The MD was more technical. He described the role and asked questions about my resume. The MD asked about my valuation experience and tied it back to valuation questions of assets they’ve acquired in the past. The MD asked about my excel skills, including debt schedules, macros and waterfalls. He was a bit more straightforward with his questions; What is your experience like and how do you think you’ll fit into this role?

The interview with the MD was shorter than I anticipated, I was done in about 20 minutes. At the conclusion of the interview, the MD said that I should meet the rest of the team and they’d be in touch to schedule the second round.

What were you thoughts on the 1st round and how’d you prepare for the 2nd round interview?

I get a call from the recruiter a few hours after my interview and he asked for my overall thoughts on the company and the role. I told him that the interview went well and his advice was correct; Know your transactions and why you think you are a good fit for the role. I was a bit nervous going into the interview because I didn’t know what to expect, but it’s better to over prepare. He informed me that the company had positive feedback and wanted to invite me back for a second interview. He mentioned they wanted me to meet with a few more members of the team including members of senior management.