My experience on the sell side
Having benefitted from this forum for nearly a decade, I'm keen to pay forward insights from my experience in the financial markets, spanning almost seven years.I've dedicated five years to the sell side at a highly regarded boutique firm in Europe, specializing in the travel and leisure sector, with a focus on leisure and intersecting interests in the consumer sector. This follows a three-year tenure with full coverage. Before moving into the sell side, I had experience on the buy side with a two-year stint at a hedge fund and left to pursue my MBA.
I'm open to answering your questions and providing assistance based on my background and experiences. Feel free to reach out.
Can someone who isn’t passionate about the markets succeed?
I suppose one could succeed without passion, but I think that would only be for a very short timeframe. You need passion to succeed long term. There is no shortage of intelligence in the public markets, but there is a a shortage of intelligence and passion. Only those with both tend to succeed over a long period of time
Is passion something that you knew you had before starting, or is it something you develop once you get into the job?
Do you need to be passionate about stocks, or can you be passionate about the research process?
You had prior buyside experience incl. 2 years at a hedge fund + a MBA? So it's fair to say SS ER was not where you wanted to end up or where you currently feel happy about being there in the long term?
If you had the chance to do it all again, would you still go the public markets investing? And do you see SS ER as a long term career or are you open to exits?
Actually I left the buy side because I felt misaligned with my old fund’s investment style. They focused on a high velocity of ideas (80-100) per analyst each calendar year. I felt it was too difficult and unsustainable to generate alpha in that style. My goal at the moment is to go through one more earnings cycle as a covering analyst and move to a pod shop with a consumer focus.
I always saw the sell side as a “waiting room” for the buy side. Really I have no idea why someone would want to be a sell side “lifer”.
Agree did my time in SS ER and thought it was a bad industry to be in. Didn't like deep financial analysis hence I ditched "finance" heavy investing and moved on to a SFO.
I don't think it is necessarily a bad industry to be in and actually at the moment there is quite a lot of consolidation happening which in my opinion is long overdue. If you land up at a decent research outfit like the top tier bulges: MS, BoFA, JPM (GS not really know for their ER) or at a top mid-market (Bernstein, Redburn Atlantic, Berenberg, Wolfe etc) there is a ton you can learn from senior individuals that you can take and apply to another profession (consulting, PE, HF, long-only etc). I think sell side equity research is unfairly painted with a broad (bad) brush.
You weren't a fan of high idea velocity at your old shop and now want to go to a podshop?
Am I reading this correctly? If you're wanting to move to a consumer pod, you will be trading weekly/biweekly views.
Thanks, I interned at an MM and will be interning in ER. Would you say your HF xp has helped you understand what's especially valuable for your buy-side clients? Any details you can share on this? Thanks
I don’t think my time at the hedge fund gave me an advantage in that area specifically. You’re more likely to learn how best to service clients by speaking to a wide variety of clients. Some clients prefer only to receive access to industry data while others might prefer a monthly/quarterly catch up depending on how busy your sector can get. But ultimately getting face time with your clients will determine how best to serve them. Given you will be interning, you will likely have limited client interaction. However, you can shadow your covering analyst and observe how they serve their client base
currently heading into my final year at a good UK semi target. multiple IB and PE internships and currently doing ER this summer at a no name shop in my home country, but really want to break into a small HF/family office in London as soon as possible post grad. any tips on where I can find firms to reach out to?
Well one way to find firms to reach out is to leverage your current shops CRM, I'd make a list of the firms and research their investment styles and performance (if available). From there I'd prepare 2 long and 2 short pitches (DO NOT PITCH SOMETHING THAT HINGES ON THE MACRO - THANK ME LATER), I'd focus on small-mid caps that are not that well covered. Look for a valuation that leaves plenty of room for upside. Then once you have refined these pitches I would send an email to the list of individuals you have compiled along with a sample pitch (choose your best ideas from the four) and ask for a coffee chat
This is a great idea, and not many actually end up leveraging this
Do you think there is limit on how many years you can spend on the sell-side before a move to the buyside becomes difficult? I've heard some funds don't look at people who have been in sell-side ER more than 3-4 years. Coming up on 4 years myself so curious to hear what you are seeing
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