Difference between sell-side and buy-side equity research (culture/ atmosphere, salary, career paths, etc.)?
Hi, I'm very curious about the difference between being a sell-side or a buy-side equity analyst. Of course, one main difference is that you don't talk to clients when you are a buy.side analyst and that your reports aren't published, as they are for internal use only. but what else? do pay (of course comparing apples with apples, so top bb with top asset manager e.g.) and hours differ significantly? hierarchy different? culture?
thanks a lot for any insights!
In buyside it actually matters when you're wrong.
Buy-side pays more. Buy-side can be more or less hours, it depends (much more results driven; hence less emphasis on hours; more on whether your recommendations pan out or not).
A buy-side research analyst has more places to go within the firm than a sell-side one. Culture varies a lot from firm to firm, regardless of buy-side or sell-side.
Not necessarily.
thank you. do buy side analysts actually cover more companies than sell-siders? as they do not have to meet up with clients and stuff, it seems that they have more time for analysing/modelling, right?
Buy-siders don't really 'cover' companies in the sense that sell-siders do. A buy-sider can look at a company, decide they have no interest in it, and move on and never look at that company again. Because of this need to be able to evaluate a large number of companies, they tend to cover an entire industry (e.g. energy), or often times even multiple industries, where a sell-sider will cover a sector (e.g. oilfield services) within a single industry.
The main purpose of sell-side research (driving commissions and supporting IB deals asides) is to conduct on-going research on a given set of companies. The main purpose of buy-side research is to find an idea you have enough conviction in that you can actually act on.
More or less yes. If I find that a company wont fit our strategy I don't need to look at it again until it hits our watchlist price target or never again if we don't like management.
How's a day in buy side? Do you have to travel a lot?
Sell Side ER or Buy Side ER (Originally Posted: 05/14/2014)
I have entry-level ER offers from a relatively large mf (e.g. Principal, Pioneer, Thornburg) and a MM bank (e.g. Jefferies, BMO, Stifel). Between these two, which one would you take?
I appreciate any advice or suggestions.
If pay is comparable then definitely buy side
Unless you love the sales and relationship aspect, the whole idea of doing SS research first is to spend 2-3 years as preparation for moving to a fund - you have a chance to go straight there so I would take it.
Definitely buy side
Definitely the MF gig, assuming the buy side is a part of your five year plan.
Pay always sucks on the junior level no matter where you are. The difference between 70K and 80K base is nothing in the long run. On the buy side you'll likely get the same technical experience and (most importantly) you'll be trained to think like an investor. The focus is different in sell-side ER, and getting in on the buy side is way harder than getting in on the sell side IMO.
Whatever you do, don't take Stifel.
Thanks for the insight everyone. I really appreciate it.
Which one are you planning on going with?
Buy side or Sell side ER? (Originally Posted: 11/01/2011)
Hey, I know this question has been brought up many times but still can't reach a clear answer myself.
My background is engineering bachelor + maths master + 2 years Equity OPS in a BB. In order to get out of back office, I have been desperately sending my CV everywhere in the world over the past half year and eventually lucky enough to get 2 offers on ER.
My objective is to eventually become a PM, does it mean I should go to buy-side directly if given the chance? Just not quite sure how ER looks like in an insurance company, from there will I be able to move to mutual/hedge fund?
Really imporatant decision to me, appreciate a lot if any advice.
I'd definintely go with the BB, every single time. BBs give you fantastic training, networking and sector experience as well as the brand name. Insurance may be buyside (kinda) but gives you....nothing.
BB.
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