So I want to do equity research. I know that there is sell-side and buy-side and, so far, I have a few distinctive arguments for both (see below). What I would really appreciate to find out is your views in terms of the experience quality that both offer.
P.S.: Not trying to touch on things such as pay, promotion chances, job security, etc. Just arguments pro- and con- for someone that just wants to do genuine equity research. Obviously those count, but trying to leave them aside for now.
sell side vs buy side ER
There are numerous differences between working on the sell side and buyside of equity research. Sell side equity researchers must always consider their relationships with company management and buyside researchers must put an intense level of thought into their models in order to continue to receive business or to make money for their funds. Our users shared their experiences below:
What is the Job of Sellside Equity Researchers?
- Work for an investment bank or a shop. Job consists of analyzing companies and selling detailed research and investment recommendations to the buy-side (i.e. AM, HF).
- Job involves spending huge amounts of time writing reports and making nice looking charts. The commercial aspect is often in conflict with the research process itself. Sell side researchers are often tasked with constantly marketing ideas and looking for ideas that are commercial rather than purely fundamental.
- Sell-side researchers tend to focus on a more limited number of companies so this could lead to a more in-depth analysis which is a good educational field for someone who is starting out.
What Do Buy Side Research Analysts Do?
- Work for HF or a AM fund. Analyze companies from two sources: independently and by talking to the sell-side researchers. Generate actionable ideas and communicate them to the Portfolio Managers who actually invest.
- The research process is more genuine - there is no commercial aspect involved and all the effort is on finding investment opportunities. Intellectually more rewarding as the idea generation process involves independent research but also access to many views from the sell-sides (trick being to disseminate them from value-add vs noise).
- Job security is lower than it is at a sell side bank research position due to the fact that you will be judged by the performance of your research.
Read More About Equity Research on WSO
- Sell Side ER vs. Buy Side Ops (special circumstances)
- Equity Research sell side: how do you think the buyside should do better to interact with you?
- Sell side equity research->Hedge fund
- Does all Buy Side ER (Long Only) pay less than Sell Side ER?
Looking to Break into the Hedge Fund World?
Want to land at an elite hedge fund use our HF Interview Prep Course which includes 814 questions across 165 hedge funds. The WSO Hedge Fund Interview Prep Course has everything you'll ever need to land the most coveted jobs on the buyside.
Investment Banking Interview Course
- 7,548 questions across 469 investment banks. Crowdsourced from over 500,000 members.
- Technical, behavioral, networking, case videos, templates. All included.
- Most comprehensive IB interview course in the world.