HY Sell-Side or IG Buy-Side
Which would you say is the more important variable, assuming a top research house on sell side and top AM on buy side?
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Well it depends on what your goals/interests are. IG and HY are pretty different. HY is going to be much more fundamental driven analyses. IG, I believe its much more rate driven and more trading in part due to more volume. I'm in HY and if I was hiring for a new seat, I think I'd prefer the person from HY research over IG buyside because they are that different, especially once you get into the low B and CCC space, which depending on your personal interests, can be the most fun. So if you want a more fundamental driven career, I'd be inclined to go with HY sell side. If you like more sleep at night stuff with more flow and rate risks analyses then go with IG. Or phrased differently, set aside sell side and buyside for the moment, do you have a preference for HY or IG, because if so focus on that.
thanks so much for the response, that makes a lot of sense. i guess in a follow up, do you think future careers in both are comparable in terms of growth, especially with changes in industry dynamics, or is HY the place to be for a career, due to the greater alpha generation opportunity?
Good question. I can't speak to the career path differences. I'd speculate that HY has more opportunities in terms of career path just because of the more fundamental analysis aspect, again more so to the extent you're doing more B/CCC. If you think of the spectrum within credit of IG/HY/stressed/special sit/distressed....its always easier to go up stream than it is to go down stream. I just don't know enough about IG career paths through to have specific answers. If it was me I'd favor HY...but I'm biased and also I don't have a firm understanding of the dynamics within IG.
edit: by more fundamental analysis benefits...I just mean that is a more transferable skill set.
Yes, this is spot on about going upstream vs. downstream. Can't imagine an IG analyst ever getting hired by a distressed shop but have seen HY analysts get hired for hybrid IG/HY coverage. In addition to above- analysts won't really be involved too much in rate/flow part so IG analyst part is really about industry direction and ratings upgrades/downgrades vs. docs/asset coverage/cash flow prospects etc on HY side.
My other point is more anecdotal so others refute me if i'm wrong but my impression is easier for a HY analyst to become a PM given the fundamental nature as noted whereas on the IG side PMs usually come from trading or associate PM type programs.
Last point is pure speculation but imagine easier to move to equities from HY vs. IG bc in HY you're more in the weeds on company valuation vs. "this feels 10 bps cheap bc industry has a good outlook" but dunno really.
different direction but any thoughts about IG trading sell side vs buy side? long term career prospects?
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