I work at a bank that has both sell-side research division as well as an investment management/asset management branch. I know there are quite a few with similar structures in the street. How frequent and difficult is it to transition from the sell-side division to the buy-side division of the same bank?
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Is this Bernstein? I have definitely seen this done there. Similarly at JP as well. In my bank I see that our AM division often talks with us at SS ER so networking is theoretically pretty easy.
It is not Bernstein, but similar structure. Wouldn’t the AM division have to subscribe to research of its own firm for access and communication to the SS team?
yes, they dont get free access and sure technically the firm will say its not preferential access either, but when the head of a research of the bank's am talks with the head of research for SS about the upcoming contract you can be fairly certain its going to be a lot better than contracts that third parties get.
It happens, but IMO it's not easier compared to outsiders trying to break into, say, JP Asset Management.
To confirm what you are saying, I should recruit for buyside shops with the expectation that the current sell side job will not easily transition to the buyside division of the same firm.
Let’s change the scenario here a bit for additional clarity. Let’s say I am graduating senior interested in pursuing a buyside research role. How would you prioritize your recruiting efforts between the following: buyside research roles, sell side at company with AM branch, sell side roles?
Would you make the argument there is no advantage between a sell-side role at a company with both divisions (JPM, Bernstein, MS, etc) vs one without a buyside division (Evercore, BAML, Jefferies, etc)?
No, there is no major advantage. Say, for Alliance Bernstein (AB), the buy side arm, they will hire a JPM SS research person who is more ready for buy-side over a Sanford Bernstein SS research person who is not ready for buy-side. The point being, buy-side is evaluating candidates based on intrinsic ability to perform on the job, not on affiliation with firms or with analysts (most star SS analysts can't pick stock for sht, not their fault really, it's the system that made their priority misaligned with generating alpha)
On your recruiting effort question, it's super simple: if someone get into buy-side research outright (assuming decent alignment of investment style and good firm culture), not a single one of them would be considering gunning for sell-side role. So it's literally about whether you can get into buy-side, or you have to SETTLE FOR sell-side.
I agree with your comments and I think this will be helpful for future readers. However, I want to play devils advocate for one point.
Let’s say you were late to learn about the ER/AM space and you weren’t able to land some internships in the space. Therefore, your resume isn’t full of direct, relevant experience, but you are self-taught and skilled enough to be considered for buyside roles on a pure stock-picking ability basis. As you are well aware, it is difficult to break into the buyside, especially when you don’t have that “credibility” on your resume.
Obviously, networking and sharing pitches is by far the best approach in this situation. However, even with strong pitches, many candidates are passed over because of lack of direct experience, especially when you have as much competition as exists in this industry. Would you still recommend aiming for buyside opportunities when a few years in a sell-side role could provide that stamp of credibility and then you would have no obstacles?
Apologies for the long-winded scenario. I want to try to find the exception to the rule and the exact line where your comments should no longer apply.
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