Pages

  • Sharebar

Pretty much every guy on that list has a strong track record over multiple years. I would imagine they get offers from HF's all the time to run money and with the current environment at investment banks, I doubt they are able to match what the HF's are willing to offer.

I'm guessing the people that do ER for a very long time have a lower risk tolerance than the guys that switch over to the buy side? Am I missing something here?

Btw, if a top rated research analyst made the switch to the buy side, how much money can they realistically expect to be running?

2012 All-American Research Team

The WSO Advantage - Equity Research

Financial Modeling Training

IB Templates, M&A, LBO, Valuation. Learn More.

Wall St. Interview Secrets Revealed

30,000+ sold & REAL questions. Learn More.

Resume Help from ER Pros

Land More Interviews. Learn More.

Find Your Mentor

Realistic ER Mock Interviews. Learn More.

Comments (94)

  • darety's picture

    subtle point is the skill sets aren't 100% transferable. sell side ER is more of a volume business, churning out reports on a daily basis but buy side is dependent on coming up with investment ideas and their implementation which can involve a different decision making process.

    and the money is highly variable on performance, conditions of coverage market and most importantly the buyside firm. buy side comp is nowhere near as structured as sell side and there is considerable variation.

  • In reply to ixjunitxi
    yeahright's picture

    ixjunitxi:
    No real consequences for being wrong

    Frank Sinatra - "Alcohol may be man's worst enemy, but the bible says love your enemy."

  • WestCoastEastCoast's picture

    ER's real job is really figuring out how to support a 'Buy' rating on every stock, regardless of the quality stock. So really, they aren't trained right on generating investment ideas. And in terms of quality of analysts/associates themselves, let's just say it's pretty common to find mistakes and number inconsistencies in ER reports.

  • In reply to WestCoastEastCoast
    EfferCore's picture

    WestCoastEastCoast:
    ER's real job is really figuring out how to support a 'Buy' rating on every stock, regardless of the quality stock. So really, they aren't trained right on generating investment ideas. And in terms of quality of analysts/associates themselves, let's just say it's pretty common to find mistakes and number inconsistencies in ER reports.

    You are pretty far off base. We pitch short ideas (successfully) all the time.

  • newfirstyear's picture

    I work for a guy on that list. It pretty much comes down to comfort. My analyst clears a few million a year, has tons of respect from clients and works 30 hours a week. There's no incentive for him to leave. He doesn't need the extra money or the extra stress.

  • In reply to EfferCore
    WestCoastEastCoast's picture

    EfferCore:
    WestCoastEastCoast:
    ER's real job is really figuring out how to support a 'Buy' rating on every stock, regardless of the quality stock. So really, they aren't trained right on generating investment ideas. And in terms of quality of analysts/associates themselves, let's just say it's pretty common to find mistakes and number inconsistencies in ER reports.

    You are pretty far off base. We pitch short ideas (successfully) all the time.

    I don't see a need to even debate on this one. Of course ER people will defend themselves. I won't bash you either. I'll let Einhorn and Klarman do the talking. Refer to "Margin of Safety" and "Fooling Some People" to see what these hedge fund managers think about ER.

  • In reply to WestCoastEastCoast
    EfferCore's picture

    WestCoastEastCoast:
    EfferCore:
    WestCoastEastCoast:
    ER's real job is really figuring out how to support a 'Buy' rating on every stock, regardless of the quality stock. So really, they aren't trained right on generating investment ideas. And in terms of quality of analysts/associates themselves, let's just say it's pretty common to find mistakes and number inconsistencies in ER reports.

    You are pretty far off base. We pitch short ideas (successfully) all the time.

    I don't see a need to even debate on this one. Of course ER people will defend themselves. I won't bash you either. I'll let Einhorn and Klarman do the talking. Refer to "Margin of Safety" and "Fooling Some People" to see what these hedge fund managers think about ER.

    Plenty of sell side analysts are shit and little more than spokespeople for their coverage list. But there is a lot of good research on the street and there are a lot of analysts that move stocks w/their ideas. To not acknowledge that is pretty myopic.

  • IamObama's picture

    I work in ER, my boss is not on that list but is still a top analyst and has received offers, and he gave me one reason when I asked him a while back...lifestyle.

  • In reply to EfferCore
    WestCoastEastCoast's picture

    EfferCore:
    WestCoastEastCoast:
    EfferCore:
    WestCoastEastCoast:
    ER's real job is really figuring out how to support a 'Buy' rating on every stock, regardless of the quality stock. So really, they aren't trained right on generating investment ideas. And in terms of quality of analysts/associates themselves, let's just say it's pretty common to find mistakes and number inconsistencies in ER reports.

    You are pretty far off base. We pitch short ideas (successfully) all the time.

    I don't see a need to even debate on this one. Of course ER people will defend themselves. I won't bash you either. I'll let Einhorn and Klarman do the talking. Refer to "Margin of Safety" and "Fooling Some People" to see what these hedge fund managers think about ER.

    Plenty of sell side analysts are shit and little more than spokespeople for their coverage list. But there is a lot of good research on the street and there are a lot of analysts that move stocks w/their ideas. To not acknowledge that is pretty myopic.

    I'd agree. No one said the entire ER space is shit. Sure there are top analysts on the sell-side. But those are pretty rare. It's like saying there are some students at SUNY Stony Brook that are extremely smart, who should be at Harvard.

  • In reply to WestCoastEastCoast
    EfferCore's picture

    WestCoastEastCoast:
    EfferCore:
    WestCoastEastCoast:
    EfferCore:
    WestCoastEastCoast:
    ER's real job is really figuring out how to support a 'Buy' rating on every stock, regardless of the quality stock. So really, they aren't trained right on generating investment ideas. And in terms of quality of analysts/associates themselves, let's just say it's pretty common to find mistakes and number inconsistencies in ER reports.

    You are pretty far off base. We pitch short ideas (successfully) all the time.

    I don't see a need to even debate on this one. Of course ER people will defend themselves. I won't bash you either. I'll let Einhorn and Klarman do the talking. Refer to "Margin of Safety" and "Fooling Some People" to see what these hedge fund managers think about ER.

    Plenty of sell side analysts are shit and little more than spokespeople for their coverage list. But there is a lot of good research on the street and there are a lot of analysts that move stocks w/their ideas. To not acknowledge that is pretty myopic.

    I'd agree. No one said the entire ER space is shit. Sure there are top analysts on the sell-side. But those are pretty rare. It's like saying there are some students at SUNY Stony Brook that are extremely smart, who should be at Harvard.

    lol. How often do you talk to sell siders?

  • In reply to EfferCore
    WestCoastEastCoast's picture

    EfferCore:
    WestCoastEastCoast:
    EfferCore:
    WestCoastEastCoast:
    EfferCore:
    WestCoastEastCoast:
    ER's real job is really figuring out how to support a 'Buy' rating on every stock, regardless of the quality stock. So really, they aren't trained right on generating investment ideas. And in terms of quality of analysts/associates themselves, let's just say it's pretty common to find mistakes and number inconsistencies in ER reports.

    You are pretty far off base. We pitch short ideas (successfully) all the time.

    I don't see a need to even debate on this one. Of course ER people will defend themselves. I won't bash you either. I'll let Einhorn and Klarman do the talking. Refer to "Margin of Safety" and "Fooling Some People" to see what these hedge fund managers think about ER.

    Plenty of sell side analysts are shit and little more than spokespeople for their coverage list. But there is a lot of good research on the street and there are a lot of analysts that move stocks w/their ideas. To not acknowledge that is pretty myopic.

    I'd agree. No one said the entire ER space is shit. Sure there are top analysts on the sell-side. But those are pretty rare. It's like saying there are some students at SUNY Stony Brook that are extremely smart, who should be at Harvard.

    lol. How often do you talk to sell siders?

    How often do you talk to the buysiders?

    Look, you're obviously not happy with me perceiving the overall ER industry as shitty investors and won't be satisfied until I admit defeat and say to you that ER people are great investors. No need to apply the spinning art you learn in ER on me. Get HFs to hire more ER guys if they're so stellar. I'm not interested in continuing this meanless exchange with you. Readers on this post can make their own judgment about ER from objective sources.

  • In reply to WestCoastEastCoast
    EfferCore's picture

    WestCoastEastCoast:
    EfferCore:
    WestCoastEastCoast:
    EfferCore:
    WestCoastEastCoast:
    EfferCore:
    WestCoastEastCoast:
    ER's real job is really figuring out how to support a 'Buy' rating on every stock, regardless of the quality stock. So really, they aren't trained right on generating investment ideas. And in terms of quality of analysts/associates themselves, let's just say it's pretty common to find mistakes and number inconsistencies in ER reports.

    You are pretty far off base. We pitch short ideas (successfully) all the time.

    I don't see a need to even debate on this one. Of course ER people will defend themselves. I won't bash you either. I'll let Einhorn and Klarman do the talking. Refer to "Margin of Safety" and "Fooling Some People" to see what these hedge fund managers think about ER.

    Plenty of sell side analysts are shit and little more than spokespeople for their coverage list. But there is a lot of good research on the street and there are a lot of analysts that move stocks w/their ideas. To not acknowledge that is pretty myopic.

    I'd agree. No one said the entire ER space is shit. Sure there are top analysts on the sell-side. But those are pretty rare. It's like saying there are some students at SUNY Stony Brook that are extremely smart, who should be at Harvard.

    lol. How often do you talk to sell siders?

    How often do you talk to the buysiders?

    Look, you're obviously not happy with me perceiving the overall ER industry as shitty investors and won't be satisfied until I admit defeat and say to you that ER people are great investors. No need to apply the spinning art you learn in ER on me. Get HFs to hire more ER guys if they're so stellar. I'm not interested in continuing this meanless exchange with you. Readers on this post can make their own judgment about ER from objective sources.

    You didn't answer the question. Do you talk to the sell side regularly?

    I talk to buy side every day. So if you were implying that you talk to the sell side pretty often, then fair enough.

    Just trying to gauge whether your opinion is based on actual experience or surface level analysis of research reports.

  • leveredarb's picture

    OP I think you overestimate how easy it is to move from ER to HF, most ER guys are viewed quite poorly by the HF world.

    for the guys that can switch its a matter of stress, convenience etc.

  • In reply to EfferCore
    roar19's picture

    Dude just give up. Everybody on this board shits on ER and all have hard-ons for what they foresee to be the "models and bottles" life of IB or S&T.

    Very few people actually understand the value that analysts add. And let me give all of you fuckers a hint - its not company estimates, ratings, or price targets.

    Smokey, this is not 'Nam, this is bowling. There are rules.

The WSO Advantage - Equity Research

Financial Modeling Training

IB Templates, M&A, LBO, Valuation. Learn More.

Wall St. Interview Secrets Revealed

30,000+ sold & REAL questions. Learn More.

Resume Help from ER Pros

Land More Interviews. Learn More.

Find Your Mentor

Realistic ER Mock Interviews. Learn More.

  • Viktri's picture

    Sell-side ER and buy-side HF are completely different.

    Sell-side ER can give buy-side access to information (ie: management of companies) that normally wouldn't be possible in some cases.

    sell-side = pitching to clients and generating ideas, they could be wrong but that isn't really the point
    buy-side = real investment thesis where you're rewarded on your picks

    - V

  • In reply to leveredarb
    newfirstyear's picture

    This is just factually incorrect. I know probably 40 guys and top hedge funds who all started off in sell side ER. ER, just like Banking, depends on the MD/Analyst you work for. If you have a well respected analyst, you're fine. Just like if you have a dealmaker, you'll do more then waste your life making powerpoints and worthless charts.

  • In reply to roar19
    leveredarb's picture

    roar19:
    Dude just give up. Everybody on this board shits on ER and all have hard-ons for what they foresee to be the "models and bottles" life of IB or S&T.

    Very few people actually understand the value that analysts add. And let me give all of you fuckers a hint - its not company estimates, ratings, or price targets.


    your value add is giving the buyside corporate access and knowing the companies in your coverage universe very well (and thus being able to tell the buyside stuff they cant find out themselves).

    ppl shit on ER cuz most of BB ER guys are bad and just repeat whatever mgmt tells them. The independent houses do some pretty damn good analysis but a lot of them still make the mistake of falling in love with a story and then fudging numbers to work with their story lol

  • joblo1's picture

    I never post but too much bad information to let this one slide. I've got almost ten years of BB sell side ER, long/short HF and mutual fund experience. I work at a sector dedicated fund. In my small part of the universe virtually every guy on an investment team has sell side experience, this is not an exaggeration, I would bet in excess of 70% have sell side ER experience. This is the training ground for the buy side. These are for Senior Analyst positions where idea generation is the only thing that matters. IB experience is good for large concentrated funds where two guys are making all of the final decisions and they need people to crank out models, positions that require actual investment recommendations are filled with ex sell side guys because no one needs to train them on the sector. In my sector this holds true for funds with $50 million of AUM and $5 billion + of AUM.

    Who shits on the sell side? Typically concentrated funds with big investment teams claim that the sell side is useless. If you only have 20 positions with very low turnover and an investment team of 10 guys you don't need the sell side but that isn't the typical fund structure. The typical fund has an investment team of less than 10 (often times less than 5) and have large coverage lists. We have a universe of 400 equities and three people dedicated to that universe. Without the sell side we would miss countless details, rumors, management thoughts, trade ideas, etc. etc. For small investment teams with position turnover near or above 100% the sell side is an important part of the investment process.

    Most of the sell side hating clearly comes from people with no experience or very limited interaction with the sell side. I've been on both sides and i can tell you while lots of sell side "research" is not valuable on a stand alone basis if it was so worthless it is odd that funds of every size would consistently take my phone calls and spend their valuable time speaking with me. Hedge funds being the biggest users.

    On the buy side now i start every morning reading sell side research and speak with at least a few SS guys per day.

    In summary, sell side research use on the buyside typically has a direct correlation between the size of the investment team. The larger the team, the less sell side is relied upon but with small teams the sell side is truly just outsourced investment team members. This is why sell side ER is the go to place for finding buy side Analysts when the buy side needs someone other than a number cruncher. When recently looking for a junior guy i interviewed IB and ER guys equally and for a dedicated sector position I can tell you it made no sense to even bring an IB guy in for final rounds, while modeling skills were better I needed someone to truly hit the ground running and that was clearly not going to happen, these were sector dedicated IB candidates, they just couldn't compete with the knowledge the sell side guys have. People who don't interact with the sell side can hate all they want but once you guys have 5-10 years of experience and are actually making investment decisions on small teams (where most of you who are successful will end up) I think your opinions will change quickly.

    Feel free to ask me questions if I wasn't clear.

  • In reply to joblo1
    WestCoastEastCoast's picture

    joblo1:
    I never post but too much bad information to let this one slide. I've got almost ten years of BB sell side ER, long/short HF and mutual fund experience. I work at a sector dedicated fund. In my small part of the universe virtually every guy on an investment team has sell side experience, this is not an exaggeration, I would bet in excess of 70% have sell side ER experience. This is the training ground for the buy side. These are for Senior Analyst positions where idea generation is the only thing that matters. IB experience is good for large concentrated funds where two guys are making all of the final decisions and they need people to crank out models, positions that require actual investment recommendations are filled with ex sell side guys because no one needs to train them on the sector. In my sector this holds true for funds with $50 million of AUM and $5 billion + of AUM.

    Who shits on the sell side? Typically concentrated funds with big investment teams claim that the sell side is useless. If you only have 20 positions with very low turnover and an investment team of 10 guys you don't need the sell side but that isn't the typical fund structure. The typical fund has an investment team of less than 10 (often times less than 5) and have large coverage lists. We have a universe of 400 equities and three people dedicated to that universe. Without the sell side we would miss countless details, rumors, management thoughts, trade ideas, etc. etc. For small investment teams with position turnover near or above 100% the sell side is an important part of the investment process.

    Most of the sell side hating clearly comes from people with no experience or very limited interaction with the sell side. I've been on both sides and i can tell you while lots of sell side "research" is not valuable on a stand alone basis if it was so worthless it is odd that funds of every size would consistently take my phone calls and spend their valuable time speaking with me. Hedge funds being the biggest users.

    On the buy side now i start every morning reading sell side research and speak with at least a few SS guys per day.

    In summary, sell side research use on the buyside typically has a direct correlation between the size of the investment team. The larger the team, the less sell side is relied upon but with small teams the sell side is truly just outsourced investment team members. This is why sell side ER is the go to place for finding buy side Analysts when the buy side needs someone other than a number cruncher. When recently looking for a junior guy i interviewed IB and ER guys equally and for a dedicated sector position I can tell you it made no sense to even bring an IB guy in for final rounds, while modeling skills were better I needed someone to truly hit the ground running and that was clearly not going to happen, these were sector dedicated IB candidates, they just couldn't compete with the knowledge the sell side guys have. People who don't interact with the sell side can hate all they want but once you guys have 5-10 years of experience and are actually making investment decisions on small teams (where most of you who are successful will end up) I think your opinions will change quickly.

    Feel free to ask me questions if I wasn't clear.

    I don't think anyone said that ER doesn't add value. Sure HF analysts will talk to the sellside and ask them about the details of certain companies. That's because they have better access to management teams. Of course, as soon as they give the company a "Sell" rating, management will refuse to talk to them. That's why most BB's ER divisions have like 99% of their covered companies as a "Buy". Even when a stock is set to be a disaster, ER recommends "Hold". So most of the HF guys call ER to get a better sense of facts like you said, but they lose interest when the ER analyst starts talking about his thesis. No one here's saying that you can't go from ER to HF. You can. Just a lot harder because a lot of HFs will want to make you unlearn what you learned in ER and then learn what they teach you. HFs wants to hire junior people on a clean slate that they can mold. Bankers, on the hand, come in with superior technicals and attention to detail. HF PMs then can take them to the next step by molding the way they think about investments. So that's why most of those prestigious funds would much rather hire IB guys than ER guys.

    And don't mean to bash you or anything (I personally respect small funds since they can focus on small- and mid-cap stocks which tend to have more market inefficiencies) but most people on here really look after places like Eton Park, Och Ziff, Farallon, SAC, Tiger Global, Goldman Sachs Investment Partners. To be quite frank with you, while you and your fund may prefer the ER guy, the above places hires mostly bankers/PE associates for analyst roles and avoid ER like poison. Anyone unconvinced can do a search on their investment teams on their own and make their own conclusions. If you still think ER is the way to go for HF, then the rest of us wish you the best of luck.

  • joblo1's picture

    Reality is virtually no one will work at any of the funds you mentioned so while they are fun to talk about aiming to be a big hitter at a top 20 fund is pretty unrealistic whether you do IB or ER. Also if you are hired with only two years of investment banking experience at a large fund you will sit there and crank out models and do shit work for other people praying that someone above you quits so you can move up to a decision making roll, no one will give a shit what your investment opinion is and few will have the opportunity to be "molded". The funny thing is the only time I've ever heard this thesis about "molding" bankers vs having ER guys "unlearn" things is WSO. And by the way I've worked at a multibillion shop shop and did extremely well, I prefer small shops because at this point in my career I want to be the guy running the marketing meetings as well as picking stocks and I can do this at a small shop in preparation for launching my own fund. Maybe you are the one lucky guy who a large hedge fund views as a charity case and wants to mold your young mind into an investing superstar so I congratulate you.

  • In reply to WestCoastEastCoast
    EfferCore's picture

    WestCoastEastCoast:
    joblo1:
    I never post but too much bad information to let this one slide. I've got almost ten years of BB sell side ER, long/short HF and mutual fund experience. I work at a sector dedicated fund. In my small part of the universe virtually every guy on an investment team has sell side experience, this is not an exaggeration, I would bet in excess of 70% have sell side ER experience. This is the training ground for the buy side. These are for Senior Analyst positions where idea generation is the only thing that matters. IB experience is good for large concentrated funds where two guys are making all of the final decisions and they need people to crank out models, positions that require actual investment recommendations are filled with ex sell side guys because no one needs to train them on the sector. In my sector this holds true for funds with $50 million of AUM and $5 billion + of AUM.

    Who shits on the sell side? Typically concentrated funds with big investment teams claim that the sell side is useless. If you only have 20 positions with very low turnover and an investment team of 10 guys you don't need the sell side but that isn't the typical fund structure. The typical fund has an investment team of less than 10 (often times less than 5) and have large coverage lists. We have a universe of 400 equities and three people dedicated to that universe. Without the sell side we would miss countless details, rumors, management thoughts, trade ideas, etc. etc. For small investment teams with position turnover near or above 100% the sell side is an important part of the investment process.

    Most of the sell side hating clearly comes from people with no experience or very limited interaction with the sell side. I've been on both sides and i can tell you while lots of sell side "research" is not valuable on a stand alone basis if it was so worthless it is odd that funds of every size would consistently take my phone calls and spend their valuable time speaking with me. Hedge funds being the biggest users.

    On the buy side now i start every morning reading sell side research and speak with at least a few SS guys per day.

    In summary, sell side research use on the buyside typically has a direct correlation between the size of the investment team. The larger the team, the less sell side is relied upon but with small teams the sell side is truly just outsourced investment team members. This is why sell side ER is the go to place for finding buy side Analysts when the buy side needs someone other than a number cruncher. When recently looking for a junior guy i interviewed IB and ER guys equally and for a dedicated sector position I can tell you it made no sense to even bring an IB guy in for final rounds, while modeling skills were better I needed someone to truly hit the ground running and that was clearly not going to happen, these were sector dedicated IB candidates, they just couldn't compete with the knowledge the sell side guys have. People who don't interact with the sell side can hate all they want but once you guys have 5-10 years of experience and are actually making investment decisions on small teams (where most of you who are successful will end up) I think your opinions will change quickly.

    Feel free to ask me questions if I wasn't clear.

    I don't think anyone said that ER doesn't add value. Sure HF analysts will talk to the sellside and ask them about the details of certain companies. That's because they have better access to management teams. Of course, as soon as they give the company a "Sell" rating, management will refuse to talk to them. That's why most BB's ER divisions have like 99% of their covered companies as a "Buy". Even when a stock is set to be a disaster, ER recommends "Hold". So most of the HF guys call ER to get a better sense of facts like you said, but they lose interest when the ER analyst starts talking about his thesis. No one here's saying that you can't go from ER to HF. You can. Just a lot harder because a lot of HFs will want to make you unlearn what you learned in ER and then learn what they teach you. HFs wants to hire junior people on a clean slate that they can mold. Bankers, on the hand, come in with superior technicals and attention to detail. HF PMs then can take them to the next step by molding the way they think about investments. So that's why most of those prestigious funds would much rather hire IB guys than ER guys.

    And don't mean to bash you or anything (I personally respect small funds since they can focus on small- and mid-cap stocks which tend to have more market inefficiencies) but most people on here really look after places like Eton Park, Och Ziff, Farallon, SAC, Tiger Global, Goldman Sachs Investment Partners. To be quite frank with you, while you and your fund may prefer the ER guy, the above places hires mostly bankers/PE associates for analyst roles and avoid ER like poison. Anyone unconvinced can do a search on their investment teams on their own and make their own conclusions. If you still think ER is the way to go for HF, then the rest of us wish you the best of luck.

    There is so much untruth and/or hyperbole to your first paragraph that you lose all credibility.

    "99% a buy" - no

    "disaster..hold" - you don't get it. A hold on paper can mean something different on the phone. A thesis and a view on a stock aren't always driven by what is on paper.

    "sure HF analysts will talk...better access" - again, no. That's about 1/34of why hedge fund or MF analysts/PMs talk to ER. Details of an industry. What contacts are saying. Views on where the stock can go. When is a good time to get in...etc, etc.

  • In reply to joblo1
    WestCoastEastCoast's picture

    joblo1:
    Reality is virtually no one will work at any of the funds you mentioned so while they are fun to talk about aiming to be a big hitter at a top 20 fund is pretty unrealistic whether you do IB or ER. Also if you are hired with only two years of investment banking experience at a large fund you will sit there and crank out models and do shit work for other people praying that someone above you quits so you can move up to a decision making roll, no one will give a shit what your investment opinion is and few will have the opportunity to be "molded". The funny thing is the only time I've ever heard this thesis about "molding" bankers vs having ER guys "unlearn" things is WSO. And by the way I've worked at a multibillion shop shop and did extremely well, I prefer small shops because at this point in my career I want to be the guy running the marketing meetings as well as picking stocks and I can do this at a small shop in preparation for launching my own fund. Maybe you are the one lucky guy who a large hedge fund views as a charity case and wants to mold your young mind into an investing superstar so I congratulate you.

    I named the firms above as examples. Most of the HF junior analysts I've came across, even at HF's websites (though most are secretive) can see that most don't come from ER. Seems like you're the lucky exception that broke in. But there's a trend. People who can't cut it in the large funds stay in the industry by moving lower to smaller funds. Of course, there are also the brilliant ones that leave and start their own funds.

  • In reply to EfferCore
    WestCoastEastCoast's picture

    EfferCore:
    WestCoastEastCoast:
    joblo1:
    I never post but too much bad information to let this one slide. I've got almost ten years of BB sell side ER, long/short HF and mutual fund experience. I work at a sector dedicated fund. In my small part of the universe virtually every guy on an investment team has sell side experience, this is not an exaggeration, I would bet in excess of 70% have sell side ER experience. This is the training ground for the buy side. These are for Senior Analyst positions where idea generation is the only thing that matters. IB experience is good for large concentrated funds where two guys are making all of the final decisions and they need people to crank out models, positions that require actual investment recommendations are filled with ex sell side guys because no one needs to train them on the sector. In my sector this holds true for funds with $50 million of AUM and $5 billion + of AUM.

    Who shits on the sell side? Typically concentrated funds with big investment teams claim that the sell side is useless. If you only have 20 positions with very low turnover and an investment team of 10 guys you don't need the sell side but that isn't the typical fund structure. The typical fund has an investment team of less than 10 (often times less than 5) and have large coverage lists. We have a universe of 400 equities and three people dedicated to that universe. Without the sell side we would miss countless details, rumors, management thoughts, trade ideas, etc. etc. For small investment teams with position turnover near or above 100% the sell side is an important part of the investment process.

    Most of the sell side hating clearly comes from people with no experience or very limited interaction with the sell side. I've been on both sides and i can tell you while lots of sell side "research" is not valuable on a stand alone basis if it was so worthless it is odd that funds of every size would consistently take my phone calls and spend their valuable time speaking with me. Hedge funds being the biggest users.

    On the buy side now i start every morning reading sell side research and speak with at least a few SS guys per day.

    In summary, sell side research use on the buyside typically has a direct correlation between the size of the investment team. The larger the team, the less sell side is relied upon but with small teams the sell side is truly just outsourced investment team members. This is why sell side ER is the go to place for finding buy side Analysts when the buy side needs someone other than a number cruncher. When recently looking for a junior guy i interviewed IB and ER guys equally and for a dedicated sector position I can tell you it made no sense to even bring an IB guy in for final rounds, while modeling skills were better I needed someone to truly hit the ground running and that was clearly not going to happen, these were sector dedicated IB candidates, they just couldn't compete with the knowledge the sell side guys have. People who don't interact with the sell side can hate all they want but once you guys have 5-10 years of experience and are actually making investment decisions on small teams (where most of you who are successful will end up) I think your opinions will change quickly.

    Feel free to ask me questions if I wasn't clear.

    I don't think anyone said that ER doesn't add value. Sure HF analysts will talk to the sellside and ask them about the details of certain companies. That's because they have better access to management teams. Of course, as soon as they give the company a "Sell" rating, management will refuse to talk to them. That's why most BB's ER divisions have like 99% of their covered companies as a "Buy". Even when a stock is set to be a disaster, ER recommends "Hold". So most of the HF guys call ER to get a better sense of facts like you said, but they lose interest when the ER analyst starts talking about his thesis. No one here's saying that you can't go from ER to HF. You can. Just a lot harder because a lot of HFs will want to make you unlearn what you learned in ER and then learn what they teach you. HFs wants to hire junior people on a clean slate that they can mold. Bankers, on the hand, come in with superior technicals and attention to detail. HF PMs then can take them to the next step by molding the way they think about investments. So that's why most of those prestigious funds would much rather hire IB guys than ER guys.

    And don't mean to bash you or anything (I personally respect small funds since they can focus on small- and mid-cap stocks which tend to have more market inefficiencies) but most people on here really look after places like Eton Park, Och Ziff, Farallon, SAC, Tiger Global, Goldman Sachs Investment Partners. To be quite frank with you, while you and your fund may prefer the ER guy, the above places hires mostly bankers/PE associates for analyst roles and avoid ER like poison. Anyone unconvinced can do a search on their investment teams on their own and make their own conclusions. If you still think ER is the way to go for HF, then the rest of us wish you the best of luck.

    There is so much untruth and/or hyperbole to your first paragraph that you lose all credibility.

    "99% a buy" - no

    "disaster..hold" - you don't get it. A hold on paper can mean something different on the phone. A thesis and a view on a stock aren't always driven by what is on paper.

    "sure HF analysts will talk...better access" - again, no. That's about 1/34of why hedge fund or MF analysts/PMs talk to ER. Details of an industry. What contacts are saying. Views on where the stock can go. When is a good time to get in...etc, etc.

    Lol you sound like the management teams that cry false statements when short-sellers go public with their thesis.

    Listen, no need to convince me or WSO. Go convince the HFs out there and get them to hire more from ER. Placement results speak for themselves. When junior HF professionals all have ER on their linkedin instead if IB, then WSO will automatically praise you and dismiss my posts.

  • joblo1's picture

    This is funny, you keep referring to searching linked in, the vast majority of buy side guys (hedge fund and Mutual fund) i deal with have worked in ER not banking, there must be a separate secret world of hedge funds that only hire bankers. Why do you have to constantly refer to LinkedIn, is it because you don't have any real experience to speak from? At the senior decision making level there are more ER guys than former bankers in my sector, maybe my sector is unique but i can assure you if you went to an industry conference there would be more former ER guys than bankers. Maybe the former bankers are back at the office building models while the former ER guys are meeting with management teams and working on generating investment ideas, no idea, I've just never come across this massive wave of bankers dominating the business that you speak of. Now on the credit side I will agree that there are far more bankers than research people but that is simply due to the fact that there are so few junior credit sell side research guys so even if every junior guy gets a buy side job after two years you would still barely notice them.

  • joblo1's picture

    I would also add, just statistically given the massive amount of junior bankers vs equity research employees there should be significantly more bankers at every level in every aspect of finance. Some BB's may only hire a few people out of undergrad each year for equity research vs 100 or so for banking.

  • SirTradesaLot's picture

    I definitely haven't worked at every firm, but I have met many multiples of people who started in equity research compared to banking who work as a PM in fundamental equities. My guess is about 10 to 1 research vs. banking of the people I've met.

    adapt or die:
    What would P.T. Barnum say about you?

    MY BLOG

  • WestCoastEastCoast's picture

    Oh pleasse, don't even get people started on how much mutual fund analysts & PMs suck. Retail investors might as well just invest on their own, saves them the fees.

  • In reply to WestCoastEastCoast
    Aston Gekko's picture

    WestCoastEastCoast:
    ER's real job is really figuring out how to support a 'Buy' rating on every stock, regardless of the quality stock. So really, they aren't trained right on generating investment ideas. And in terms of quality of analysts/associates themselves, let's just say it's pretty common to find mistakes and number inconsistencies in ER reports.

    Ahhh come on now. It's true that clients are not concerned with the ratings, but they do want L/S pairs almost every time you handle a call or are marketing. For the OP, most Senior ER guys are happy with the 300-600k earnings and lower job risk. Once you are established, ER can be pretty rewarding especially if you have industry experience and actually care about what you are analyzing. HFs do come knocking if you are good and make them money. HF will pay more usually, but if you end up under an asshole PM or the overall strategy for the fund is not conducive to what you want to do, it can be a painful experience. Most HF guys have patchwork quilt resumes because of those reasons...

  • In reply to joblo1
    Aston Gekko's picture

    joblo1:
    I never post but too much bad information to let this one slide. I've got almost ten years of BB sell side ER, long/short HF and mutual fund experience. I work at a sector dedicated fund. In my small part of the universe virtually every guy on an investment team has sell side experience, this is not an exaggeration, I would bet in excess of 70% have sell side ER experience. This is the training ground for the buy side. These are for Senior Analyst positions where idea generation is the only thing that matters. IB experience is good for large concentrated funds where two guys are making all of the final decisions and they need people to crank out models, positions that require actual investment recommendations are filled with ex sell side guys because no one needs to train them on the sector. In my sector this holds true for funds with $50 million of AUM and $5 billion + of AUM.

    Who shits on the sell side? Typically concentrated funds with big investment teams claim that the sell side is useless. If you only have 20 positions with very low turnover and an investment team of 10 guys you don't need the sell side but that isn't the typical fund structure. The typical fund has an investment team of less than 10 (often times less than 5) and have large coverage lists. We have a universe of 400 equities and three people dedicated to that universe. Without the sell side we would miss countless details, rumors, management thoughts, trade ideas, etc. etc. For small investment teams with position turnover near or above 100% the sell side is an important part of the investment process.

    Most of the sell side hating clearly comes from people with no experience or very limited interaction with the sell side. I've been on both sides and i can tell you while lots of sell side "research" is not valuable on a stand alone basis if it was so worthless it is odd that funds of every size would consistently take my phone calls and spend their valuable time speaking with me. Hedge funds being the biggest users.

    On the buy side now i start every morning reading sell side research and speak with at least a few SS guys per day.

    In summary, sell side research use on the buyside typically has a direct correlation between the size of the investment team. The larger the team, the less sell side is relied upon but with small teams the sell side is truly just outsourced investment team members. This is why sell side ER is the go to place for finding buy side Analysts when the buy side needs someone other than a number cruncher. When recently looking for a junior guy i interviewed IB and ER guys equally and for a dedicated sector position I can tell you it made no sense to even bring an IB guy in for final rounds, while modeling skills were better I needed someone to truly hit the ground running and that was clearly not going to happen, these were sector dedicated IB candidates, they just couldn't compete with the knowledge the sell side guys have. People who don't interact with the sell side can hate all they want but once you guys have 5-10 years of experience and are actually making investment decisions on small teams (where most of you who are successful will end up) I think your opinions will change quickly.

    Feel free to ask me questions if I wasn't clear.

    Similar experience on my end. Well put. Sell Side ER is still very relevant and in many ways can be much better work than banking, especially if you know what you are talking about and have relevant experience. Corporate access and marketing to clients is a great feedback loop to be involved in with excellent networking rewards.

  • In reply to WestCoastEastCoast
    leveredarb's picture

    WestCoastEastCoast:
    Oh pleasse, don't even get people started on how much mutual fund analysts & PMs suck. Retail investors might as well just invest on their own, saves them the fees.

    correct. Mutual fund management is probably the biggest scam in all of finance lol. If you invest in some traditional AM fund through the PWM arm of a BB you are underperforming the index by 3% already lol
  • In reply to leveredarb
    West Coast rainmaker's picture

    I would say the above stated reasons of "lifestyle" and "lower risk" are very true.

    But ER is a very stable job, considerably more so than IBD and S&T. As an II ranked analyst, you can break 7-figures. And you do that while working ~60 hours a week, with low risk of spontaneous termination.

    Working for a HF sounds great in your 20s and 30s. But would you want to if you had a mortgage, a wife, and kids? Even if you have substantial savings, a market downturn could put you under considerable financial pressure. The marginal increase in salary probably doesn't seem worth the risk.

    And, as I progress in my own career, I am realizing the HF industry is getting more competitive. HFs have more institutional clients, all desperate for yield and constantly comparing you to other managers. And, as Julian Robertson said in a recent interview, hedge funds' competition is now other hedge funds. It is much harder to consistently hit home runs now than 20-30 years ago.

    leveredarb:
    WestCoastEastCoast:
    Oh pleasse, don't even get people started on how much mutual fund analysts & PMs suck. Retail investors might as well just invest on their own, saves them the fees.

    correct. Mutual fund management is probably the biggest scam in all of finance lol. If you invest in some traditional AM fund through the PWM arm of a BB you are underperforming the index by 3% already lol

    Very true. Sucks for the investors, but not a bad job if you are PM.

  • SirTradesaLot's picture

    I find it funny that people shit on mutual fund management, but want to go into a 'stock picking' role at a hedge fund. It's basically the same job in a different wrapper.

    adapt or die:
    What would P.T. Barnum say about you?

    MY BLOG

  • In reply to SirTradesaLot
    Hooked on LEAPS's picture

    SirTradesaLot:
    I find it funny that people shit on mutual fund management, but want to go into a 'stock picking' role at a hedge fund. It's basically the same job in a different wrapper.

    I'm trying to figure out if mutual fund guys make considerably less than HF guys because the fees are exponentially lower, or does this get balanced out by making it exponentially easier to manage a lot of money? Plus the target market for mutual funds is a lot bigger than the target market for HF's.

    Competition is a sin.

    -John D. Rockefeller

  • In reply to Hooked on LEAPS
    SirTradesaLot's picture

    Hooked on LEAPS:
    SirTradesaLot:
    I find it funny that people shit on mutual fund management, but want to go into a 'stock picking' role at a hedge fund. It's basically the same job in a different wrapper.

    I'm trying to figure out if mutual fund guys make considerably less than HF guys because the fees are exponentially lower, or does this get balanced out by making it exponentially easier to manage a lot of money? Plus the target market for mutual funds is a lot bigger than the target market for HF's.


    I think the bigger reason you see the discrepancy in pay between your average hedge fund manager and a mutual fund manager is that the hedge fund manager is usually the owner of the business and the mutual fund manager is not. Yes, hedge funds charge higher fees, but the mutual fund industry probably has 10X the amount of assets. I had a longer description here:
    http://www.wallstreetoasis.com/forums/how-much-do-...

    adapt or die:
    What would P.T. Barnum say about you?

    MY BLOG

  • leveredarb's picture

    mf comp is lot lower than hf comp because mfs employ 1000000x more people to cover every single stock in a given industry

  • In reply to leveredarb
    SirTradesaLot's picture

    leveredarb:
    mf comp is lot lower than hf comp because mfs employ 1000000x more people to cover every single stock in a given industry

    That is inaccurate. For a given fund, there are usually 4-8 investment professionals on a team and that number usually doesn't increase much (if at all) with AUM. I'm not even one to defend mutual fund management, but this is simply not true. Sometimes, this team manages more than one fund (maybe a small cap and a mid cap). I personally know a fund mgt team that manages over $10 billion in one fund with 6 investment professionals (4 senior and 2 junior). I know of another with 6 senior investment professionals managing more than $20 billion. They make a lot of money, but much less than a HF manager with the same amount of assets, because the fees are less and they aren't the primary owners of the firm. I don't think you will find many hedge funds with 10-20 billion in AUM with 6 investment professionals.

    What is your source for this information?

    adapt or die:
    What would P.T. Barnum say about you?

    MY BLOG

  • In reply to SirTradesaLot
    Amphipathic's picture

    SirTradesaLot:
    I find it funny that people shit on mutual fund management, but want to go into a 'stock picking' role at a hedge fund. It's basically the same job in a different wrapper.

    Never understood that either.

  • Hooked on LEAPS's picture

    SirTradesaLot:
    Hooked on LEAPS:
    SirTradesaLot:
    I find it funny that people shit on mutual fund management, but want to go into a 'stock picking' role at a hedge fund. It's basically the same job in a different wrapper.

    I'm trying to figure out if mutual fund guys make considerably less than HF guys because the fees are exponentially lower, or does this get balanced out by making it exponentially easier to manage a lot of money? Plus the target market for mutual funds is a lot bigger than the target market for HF's.


    I think the bigger reason you see the discrepancy in pay between your average hedge fund manager and a mutual fund manager is that the hedge fund manager is usually the owner of the business and the mutual fund manager is not. Yes, hedge funds charge higher fees, but the mutual fund industry probably has 10X the amount of assets. I had a longer description here:
    http://www.wallstreetoasis.com/forums/how-much-do-...

    That makes sense. But....

    http://www.glassdoor.com/Salary/Fidelity-Investments-Portfolio-Manager-Salaries-E2786_D_KO21,38.htm

    PM's at Fidelity don't even break the $200,000 mark. Does someone not feel like reporting their bonus? Lol.

    Seriously though, not saying $200,000 per year sucks, but I would think it would be a much higher number, even at a mutual fund.

    Competition is a sin.

    -John D. Rockefeller

  • WestCoastEastCoast's picture

    SirTradesaLot:
    I find it funny that people shit on mutual fund management, but want to go into a 'stock picking' role at a hedge fund. It's basically the same job in a different wrapper.

    Well mutual funds and hedge funds have pretty different investing styles. Mutual funds add stock to their portfolio not because after deep analysis they believe it is undervalued/overvalued but rather because it will better imitate whatever indices they're being compared to. The former focuses on relative returns and the latter on absolute returns. So I guess some can argue that HFs better hone your analytical/investment ability.

  • In reply to Hooked on LEAPS
    SirTradesaLot's picture

    Hooked on LEAPS:
    SirTradesaLot:
    Hooked on LEAPS:
    SirTradesaLot:
    I find it funny that people shit on mutual fund management, but want to go into a 'stock picking' role at a hedge fund. It's basically the same job in a different wrapper.

    I'm trying to figure out if mutual fund guys make considerably less than HF guys because the fees are exponentially lower, or does this get balanced out by making it exponentially easier to manage a lot of money? Plus the target market for mutual funds is a lot bigger than the target market for HF's.


    I think the bigger reason you see the discrepancy in pay between your average hedge fund manager and a mutual fund manager is that the hedge fund manager is usually the owner of the business and the mutual fund manager is not. Yes, hedge funds charge higher fees, but the mutual fund industry probably has 10X the amount of assets. I had a longer description here:
    http://www.wallstreetoasis.com/forums/how-much-do-...

    That makes sense. But....

    http://www.glassdoor.com/Salary/Fidelity-Investments-Portfolio-Manager-Salaries-E2786_D_KO21,38.htm

    PM's at Fidelity don't even break the $200,000 mark. Does someone not feel like reporting their bonus? Lol.

    Seriously though, not saying $200,000 per year sucks, but I would think it would be a much higher number, even at a mutual fund.


    I don't believe that for a second. At my last firm, the lowest paid PM made about $400k (basically a junior PM who took over an old fund) the highest over $25 million (a very senior guy with a lot of assets). The median was in the $1 million range, but the average was higher due to a few groups that had outsized assets and revenues. We had higher than average comp. the more you have a retail mutual fund complex where the average fund investor doesn't know or care who the PM is, the less they get paid. Still, $200k seems really light, to the point where it is literally unbelievable.

    Probably the 50 year old guys don't know about Glassdoor and aren't filling out surveys. Probably not a random sample.

    adapt or die:
    What would P.T. Barnum say about you?

    MY BLOG

  • In reply to WestCoastEastCoast
    SirTradesaLot's picture

    WestCoastEastCoast:
    SirTradesaLot:
    I find it funny that people shit on mutual fund management, but want to go into a 'stock picking' role at a hedge fund. It's basically the same job in a different wrapper.

    Well mutual funds and hedge funds have pretty different investing styles. Mutual funds add stock to their portfolio not because after deep analysis they believe it is undervalued/overvalued but rather because it will better imitate whatever indices they're being compared to. The former focuses on relative returns and the latter on absolute returns. So I guess some can argue that HFs better hone your analytical/investment ability.


    If anybody has interest, I can write a more detailed description of the differences/similarities between hedge funds and mutual funds. I was thinking of the incentives, legal structures, the advantages of starting one firm type or the other, and similar topics. Let me know.

    adapt or die:
    What would P.T. Barnum say about you?

    MY BLOG

  • In reply to Hooked on LEAPS
    EfferCore's picture

    Hooked on LEAPS:
    SirTradesaLot:
    Hooked on LEAPS:
    SirTradesaLot:
    I find it funny that people shit on mutual fund management, but want to go into a 'stock picking' role at a hedge fund. It's basically the same job in a different wrapper.

    I'm trying to figure out if mutual fund guys make considerably less than HF guys because the fees are exponentially lower, or does this get balanced out by making it exponentially easier to manage a lot of money? Plus the target market for mutual funds is a lot bigger than the target market for HF's.


    I think the bigger reason you see the discrepancy in pay between your average hedge fund manager and a mutual fund manager is that the hedge fund manager is usually the owner of the business and the mutual fund manager is not. Yes, hedge funds charge higher fees, but the mutual fund industry probably has 10X the amount of assets. I had a longer description here:
    http://www.wallstreetoasis.com/forums/how-much-do-...

    That makes sense. But....

    http://www.glassdoor.com/Salary/Fidelity-Investments-Portfolio-Manager-Salaries-E2786_D_KO21,38.htm

    PM's at Fidelity don't even break the $200,000 mark. Does someone not feel like reporting their bonus? Lol.

    Seriously though, not saying $200,000 per year sucks, but I would think it would be a much higher number, even at a mutual fund.

    Double that for Senior Analysts at Fidelity and elsewhere. PMs (w/more than $1b - $2b) probably 3x-4x that to start.

  • In reply to WestCoastEastCoast
    EfferCore's picture

    WestCoastEastCoast:
    SirTradesaLot:
    I find it funny that people shit on mutual fund management, but want to go into a 'stock picking' role at a hedge fund. It's basically the same job in a different wrapper.

    Well mutual funds and hedge funds have pretty different investing styles. Mutual funds add stock to their portfolio not because after deep analysis they believe it is undervalued/overvalued but rather because it will better imitate whatever indices they're being compared to. The former focuses on relative returns and the latter on absolute returns. So I guess some can argue that HFs better hone your analytical/investment ability.

    You are over your head dude. What you have heard and read on WSO (because you clearly aren't in industry) is not based in fact. Most mutual funds and analysts are as focused on fundamentals and stock picking as anyone on the HF side. Guys at Capital Group, MFS, T Rowe, and Wellington are some of the smartest investors I've met and they take overweight positions based on pretty deep fundamental analysis (think multiple meetings with mgmt, expert networks, deep dives with sell-side, industry conferences, etc.).

  • In reply to EfferCore
    WestCoastEastCoast's picture

    EfferCore:
    WestCoastEastCoast:
    SirTradesaLot:
    I find it funny that people shit on mutual fund management, but want to go into a 'stock picking' role at a hedge fund. It's basically the same job in a different wrapper.

    Well mutual funds and hedge funds have pretty different investing styles. Mutual funds add stock to their portfolio not because after deep analysis they believe it is undervalued/overvalued but rather because it will better imitate whatever indices they're being compared to. The former focuses on relative returns and the latter on absolute returns. So I guess some can argue that HFs better hone your analytical/investment ability.

    You are over your head dude. What you have heard and read on WSO (because you clearly aren't in industry) is not based in fact. Most mutual funds and analysts are as focused on fundamentals and stock picking as anyone on the HF side. Guys at Capital Group, MFS, T Rowe, and Wellington are some of the smartest investors I've met and they take overweight positions based on pretty deep fundamental analysis (think multiple meetings with mgmt, expert networks, deep dives with sell-side, industry conferences, etc.).

    lol actually, if your username is any indicator of your firm, I'm not only in the industry but also at a firm that receives resumes from Evercore guys trying to lateral pretty often. You seem to think mutual fund guys are great investors. Then go invest with them. I recommend you put in all your savings (you'll get more money!!).

  • slowdive's picture

    A lot of strong views and misinformation here. I come in somewhere in the middle. I am at a fund that hires only ex-IB or ex-PE guys. We have interviewed guys that had ER experience, but they had also worked at HFs as well. The ex-IB HF guys I have met are more numerous, but that is to be expected given the relative class sizes. I think that either can be good, but there are pros and cons. IB guys are more raw but have less bad habits to unlearn. ER guys have a lot of sector knowledge but are used to a somewhat different game. The unlearning aspect is very real, that is also why some HFs don't like to hire from other HFs. Yes, it is frustrating to interview bankers, because most of them don't know shit about investing. Frankly I would personally be more open to hiring ER guys, but for whatever reason, it is part of the culture of my firm that we hire bankers. I'm sure there are places that hold the opposite view. Remember, HFs are all very different, they do not just fall into a certain mold, they take on the character and personality of their founders.

    We definitely believe that ER guys add value, but have mixed feelings. We are quick to laugh when we discover a mistake in a model (see this all the time) and sometimes use upgrades/downgrades as a contrarian indicator, but when someone is good, we will respect that as well. They are obviously helpful for getting ramped up on a new company/sector quickly. They are also very useful for gauging sentiment and trying to get a sense of how other funds are positioned. The management access part is actually not as valuable for me, I generally just ask the company myself, although in the cases where the company is in a quiet period or something than I will ask the analyst.

    The main gripe we have with ER is not necessarily that they aren't smart, but the conflicts of interest. Sometimes IBD really wants to get a certain deal. Sometimes a certain big HF client has undue influence on them. Sometimes they get too close to management. I'm not saying this is always (or even often) the case, but it is inherently a seat where it can be difficult to be objective at times. I've seen what ER guys go through when they put out an unpopular call, they get shit on all day by pissed off buysiders, and it is tough to go against the tide. There is a big herd mentality amongst the sell-side, I am often amazed by how tight street consensus numbers can be, or how many people can have overweights on a company that sucks. But I will admit that this can happen on the buyside as well, this is human nature after all, it's just that in the HF world you have less knowledge about what others are doing.

    As for why they don't move over, I'm sure there are a multitude of reasons. Being at a HF is very stressful. ER has more stability, although I've seen a ton of guys get blown out this year. Some guys might like talking more than trading, there is nothing wrong with that, and for them being in ER makes more sense. Some guys are more professorial types that like doing deep research. I'm sure some guys take pride in being known for owning their sector, like Craig Moffet.

    As far as the mutual fund debate, it is hilarious that someone is citing GlassDoor as a source for Fidelity PM comp. Does it make any sense that a guy running billions at Fidelity would not be making 7 figures? Think about the math. Yes, HF guys like to shit on the long onlys because they are unsophisticated, but there are some smart mutual fund guys too. Also there are actually more HF analysts out there than MF analysts, so whoever said that MFs have more coverage guys is totally wrong. The AUM/head ratio of a MF is exponentially larger than a HF, does it make any sense that this would not be the case, given the disparity in fee structures?

    I think working at a MF could be an interesting job, it just depends, although to be honest I know much less about that world. I would love to be educated if someone has close knowledge of how compensation/hierarchy/promotions/etc work. SirTradesaLot, I would definitely be interested in hearing your take on the legal differences.

  • vitaminc's picture

    Sellside ER and MF background here.

    1. To say buyside ER is not needed is 100% ludicrous. That's why expert networks are routinely used by different HF and MFs. And yes, they are still around. Impossible to have depth with 100+ equities universe at sellside vs. 20- at buyside; just imagine in the coming earning season listening to multiple dozens of con calls, updating model, and actually *understand* what's going on.

    2. Not every MF is closet indexing but many top HF are basically behaving like MF, very long biased and shuffle money into HF hotels like AAPL, QCOM, BAC, etc.

    3. ER skill set remains the same across MF and HF space. Modeling is only a small part of the equation.

    4. Sellside ER is more of a relationship business; maintaining relationship with company executives, paying clients, voting clients, distribution lists, industry contacts, house bankers, etc. Not every sellside ER make good buyside analyst/investor, but it sure is much easier to get someone who understand the industry than some art history banking monkey that would need years in grooming.

    5. HF sounds awesome but there are a lot of them around with high turnover/bellyup rates.

Pages