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.
Thanks a lot!
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:
Sellside Equity Researcher
- Work for an investment bank or a shop. Job consists of analyzing companies and sell your detailed research process and investment recommendations to the buy-side (i.e. AM, HF).
- The process itself however involves a huge amount of time writing those reports and making nice looking charts and stuff... while the commercial aspect is somehow in conflict with the research process itself (i.e. constantly marketing ideas, look for ideas that are also commercial rather than purely fundamental, have the tendency to be unobjectively bullish to make ideas more marketable, etc).
- 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 just about to start.
Buy Side Research Analyst
- Work for HF or a AM fund. Analyze companies from two sources: independently and by talking to the sell-sides. 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).
- Can't really think of negative argument in terms of quality of experience. Ok - may not be as secure as a ER job at a big bank but not really trying to touch on that as of now.
Read More About Equity Research on WSO
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- Sell side equity research->Hedge fund
- Does all Buy Side ER (Long Only) pay less than Sell Side ER?
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