from the buy-side back to the sell-side

UK2013plus's picture
Rank: Orangutan | 302

Hi, I recently talked to an equity analyst at a BB. After graduating from college, he first worked for another BB at the sell.side, then moved to a long/ short equity hedge fund (so buy-side), but then came back to the sell-side (his current position at the BB).

Does that happen often? I always thought it's sell-side > buy-side and not vice-versa.

Comments (55)

Feb 23, 2013

if you talked to him, you wouldn't think about asking him that? I mean come on, he can do what ever makes him happy, right?

Feb 23, 2013

of course. I was just surprised, since I have never met anyone before who moved from the buy-side back to the sell-side.

As for asking him, it might have been awkward. maybe the hedge fund went bust or he was fired or anything and therefore forced to go back. would have been an uncomfortable situation if I had ask him why he left the fund and then something like that turned out

Feb 23, 2013

whether he is on the buy or sell side of any bulge bracket his job sound the same analyst. As an analyst on either side the tools are the same with opposite desired end results.

Feb 23, 2013

Yeah, why the fuck not? It happens, it depends on the circumstance. There are shitty buy side jobs.

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Feb 23, 2013

Yes it happens often...when the fund blows up.

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Feb 23, 2013

please explain how can a buy side job be shitty in the short term. The reason I say short term is because if your working for an out fit that has differing motives that you feel may not be the wisest financial decision the ship goes down along with the section of your resume that says work experience but besides that how are some buy side jobs shitty.

Feb 23, 2013
smallmoneygrower:

please explain how can a buy side job be shitty in the short term. The reason I say short term is because if your working for an out fit that has differing motives that you feel may not be the wisest financial decision the ship goes down along with the section of your resume that says work experience but besides that how are some buy side jobs shitty.

Go out there and see. I'm not wasting my time with dumbass questions.

Feb 23, 2013

many consider the sell-side more dynamic, as you have more client-exposure. I personally cannot judge on that. I did two summer internships in ER (and hopefully a third soon), one at a boutique investment bank and the other at a large asset manager. two internships, however, are not enough experience to judge on that I guess. I personally enjoyed both.

maybe he left because he missed the thrill of the sell-side, idk

Feb 23, 2013
UK2013plus:

many consider the sell-side more dynamic, as you have more client-exposure. I personally cannot judge on that. I did two summer internships in ER (and hopefully a third soon), one at a boutique investment bank and the other at a large asset manager. two internships, however, are not enough experience to judge on that I guess. I personally enjoyed both.

maybe he left because he missed the thrill of the sell-side, idk

Thank you that was very informative how do you feel about subchapter s corporations as tax shelters and trading options between two of these entites to legally skim more monies from money management clients

Feb 23, 2013

This site is for questions about finance and there are no dumb questions. Your response is similar to that of the comic book guy from the simpsons and my guess is that your personality is just as much a social repellent as his. Now anyone who intends to use this site to do what it is designed for "networking and socializing" about the financial industry please acknowledge my question as unanswered or answered by a person who is possibly well learned concerning the financial industry but has no intelligence when it comes to some of the more simple words in the english language like "NETWORKING" not join a discussion to wag a finger and stroke your own ego thats probably not the only thing you stroke manually how do you spend your evening listening to o yeah or applying more oil

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Mar 3, 2013
smallmoneygrower:

This site is for questions about finance and there are no dumb questions.

There are both dumb questions and dumb statements, yours is one of them.

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Mar 3, 2013
smallmoneygrower:

This site is for questions about finance and there are no dumb questions. Your response is similar to that of the comic book guy from the simpsons and my guess is that your personality is just as much a social repellent as his. Now anyone who intends to use this site to do what it is designed for "networking and socializing" about the financial industry please acknowledge my question as unanswered or answered by a person who is possibly well learned concerning the financial industry but has no intelligence when it comes to some of the more simple words in the english language like "NETWORKING" not join a discussion to wag a finger and stroke your own ego thats probably not the only thing you stroke manually how do you spend your evening listening to o yeah or applying more oil

Your original question came across as abrasive and a bit condescending, which is likely why you received the reply that you did. Moving on from that though, let's focus directly on your little rant here regarding how people on this site are supposed to do this or do that. No one on this site owes you ANYTHING. Users like Flake and me come on this site because we like to and give advice or chime in on topics that interest us or provide answers to questions because WE LIKE TO. We don't OWE YOU ANYTHING. You went on to lecture someone who obviously knows more than you in a diminutive tone calling into question his mastery of the English language, when yours is clearly nowhere to be found, but the thing I found most hilarious about your entire post was the fact that you were wrong. There ARE dumb questions. There are also smart ass questions, condescending questions, and even good questions... but please don't make the mistake of thinking that there are no dumb questions. That's something your grade school teachers spoon fed to you so that you didn't feel bad about asking something stupid, while they in the mean time tried to reconcile every decision they made up to that point. In the real world there are winners and losers, good questions and bad questions. Get the hell out of here with that politically correct bs... If you work in finance and you ask someone what they mean by "the time value of money" BOOM, that's a bad question.

Oh and get rid of the attitude...Think about how you ask questions and phrase them in a more humble manner that demonstrates a genuine curiosity rather than smugly trying to prove your own point while thinly masquerading under the guise of caring what the answer is. You sound pretentious and it obviously rubs people the wrong way. If I were Flake, I wouldn't have responded to you any differently.

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Mar 3, 2013

i dont know how much more money would be worth it but it has to be quite a bit

Mar 5, 2013

People that have done neither tend to lean towards buy-side being better, but that is mostly because buy-side is really trendy now. The couple of people I have spoken to that have done both seem to have more balanced answers about the plus and minuses of both.

Mar 7, 2013

This is actually something I have thought about recently.

Longer term I would love to work on the buyside but I realise there is a good chance that it will not be for me. I always wonder how difficult it would be to make a transition back to the sell side if things did'nt pan out.

I realise buy side -> sell side prob happens a fair bit but crazy shit also happens a fair bit. How hard a sell is it to land lets say a sell side research gig coming from a hedge fund/asset management?

Mar 7, 2013

In many cases sell side pays more, particularly as many hedge funds have been below their watermark and long onlys have been in a world of pain with fund outflows - basically feeding your family, paying off a mortgage, silly stuff like that

Mar 9, 2013

I went from the buyside to sellside, negotiated completely flexible working hours, ability to work from home when I wanted and dictate when/where I did roadshows.

Far more strategists are ex-buyside (at a high level) than analysts (tend to be older too). Some have blown up funds/private school bills to pay, others move for personal reasons (such as myself, there are more important things than $$s).

Salaries are about double for an equivalent level, bonuses obviously far less, particularly as the sell-side is being gutted now as primary issuance remains moribund on equities (bonds ok for now..)

Mar 9, 2013

Why in fucks name...

Mar 9, 2013

There are very few people that revert back to the sell-side after going to the buyside. Just take a look at the profiles of folks at the VP/D/MD level at banks. You almost never see someone that was an investor going back to do investment banking.

Personally, I could never imagine myself going back. I don't do well in "client services" environments -- I simply hate feigning knowledge or relationships in order to appear smart. Once you're in a position where you drive decisions and outcomes, it is very hard to go back to an "advisory" type role. Some people love being a "trusted adviser," and these are the types of people who are most likely to end up back in banking.

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Mar 9, 2013

I think it depends on the personality of the person.

I knew OF a guy ( I met him once) who started in a top group at a BB got promoted to associate, went to B school, then worked in PE.. After a year or so, he jumped back into a VP role at the bank. I think he just really liked the sell side and wanted to experience the buy side for a little bit.

Mar 9, 2013

I know a guy who did. He ended up going back to a really awesome boutique focusing on something he loved.

"Look, you're my best friend, so don't take this the wrong way. In twenty years, if you're still livin' here, comin' over to my house to watch the Patriots games, still workin' construction, I'll fuckin' kill you. That's not a threat, that's a fact.

Mar 9, 2013

what's so bad about the sell-side?

Mar 9, 2013

didnt u read the 2nd reply?

Mar 9, 2013

I known quite a few senior people who moved from buy side, mostly PE and real estate investment firms to sell side advisory roles, after being let go from their respective buy side shops. Especially now with the rather difficult fund raising environment, many PE firms, even high profile ones like Apollo are experiencing difficulties circling enough commitments for their new funds, so they are letting go of partners and other senior investment professionals. Many of these people cannot find suitable positions at other buy side shops so they end up moving over/back to the sell side as senior deal makers. Boutique IB firms value their buy side investor contacts which help them find capital sources to circle their deals.

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Mar 9, 2013
brandon st randy:

I known quite a few senior people who moved from buy side, mostly PE and real estate investment firms to sell side advisory roles, after being let go from their respective buy side shops. Especially now with the rather difficult fund raising environment, many PE firms, even high profile ones like Apollo are experiencing difficulties circling enough commitments for their new funds, so they are letting go of partners and other senior investment professionals. Many of these people cannot find suitable positions at other buy side shops so they end up moving over/back to the sell side as senior deal makers. Boutique IB firms value their buy side investor contacts which help them find capital sources to circle their deals.

I've seen this a lot in this cycle.

Mar 9, 2013

I knew someone who was addicted to prostitutes and later became one...buyside --> sellside

so yes

Mar 9, 2013

I knew someone who did 2 years in IB -> 2 years at HF -> back to IB. Their reasoning was that they didn't see as much potential in terms of promotion and also that the income was less stable.

Mar 9, 2013
startwist:

I knew someone who did 2 years in IB -> 2 years at HF -> back to IB. Their reasoning was that they didn't see as much potential in terms of promotion and also that the income was less stable.

did they come back as an associate at the same firm or a 3rd year at a different bank?

Mar 9, 2013

The guys who stay in banking long term are the less smart ie. those who are not valuable enought to make it as investors. Junior bankers: if I were you, I would stop admiring those directors and MDs that bark at you every day. Those guys are clearly retards who couldn't make it and join the smart ones. Besides, even on the buy side you get to find really stupid guys. At the end of the day, very often many of them are gamblers and no one really knows who's a good or bad investor, few exceptions aside.

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Mar 9, 2013
fund:

The guys who stay in banking long term are the less smart ie. those who are not valuable enought to make it as investors. Junior bankers: if I were you, I would stop admiring those directors and MDs that bark at you every day. Those guys are clearly retards who couldn't make it and join the smart ones. Besides, even on the buy side you get to find really stupid guys. At the end of the day, very often many of them are gamblers and no one really knows who's a good or bad investor, few exceptions aside.

That's just a bunch of shit. MDs are retards? wtf? Would you like to put that on record with your full name?

Mar 9, 2013

it is common for people to move from buyside back to sell-side after being unsuccessful running money at a hedge fund.

Mar 9, 2013

So consensus is nobody usually does it because they just don't like the buy-side hahaha

Best Response
Mar 9, 2013
BlackHat:

So consensus is nobody usually does it because they just don't like the buy-side hahaha

The thing is that in the macro world base salary is low and potential pay-out is enormous. so a guy comes to manage some money after being succesful and making alot of money on the sell-side and he just assumes he will do well. A year or two later he has made no money, is raking in approximately as much as a first year associate in base salary, and knows he can get a big job back on the sell-side. So most go back...I would say more people go back to the sell-side then people who make the money you guys all hear about at hedge funds. I have been in the business for some time and the path of sell-side-hedge fund-make no money-go back to sellside is way more common then people who actually make it in the hedge fund world.

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Mar 9, 2013

I think everyone would love to be the buyside. Wouldn't anyone rather be the client than client services? But with buyside, there's always going to be winners and losers. The kids who can't cut it aren't going to last on the buyside.

Mar 9, 2013
kidflash:

I think everyone would love to be the buyside. Wouldn't anyone rather be the client than client services? But with buyside, there's always going to be winners and losers. The kids who can't cut it aren't going to last on the buyside.

Rubbish... very little of "lasting" or "making it" on the buy-side has to do with "cutting it", i.e. your ability, effort, talent or whatever... and the elements that do are not different from making it in other businesses including the sell side.

How much of your job on the buyside as a "kid" has to do making decisions and facing the consequences of this, which is the only part that is different between the sellside and buyside?

Mar 9, 2013

Oh. I see. Thank you for clearing that up. I appreciate the insight!

Mar 9, 2013

I did.

I worked in private equity at a brand name firm for a couple years after my analyst program and returned to investment banking as a senior associate. That was 6-7 years ago and I still work in the M&A group of a leading bulge bracket bank.

Three reasons:

  1. Private equity bored the sh*t out of me. It was painful due diligence all day long, and negotiating painful bank deals and financing covenants. I would rather cut my nuts off and pickle them than negotiate bank documentation all day. This is a BIG part of private equity. On the other hand, I loved doing M&A deals and still do.
  2. I saw the beginning of a long downturn in private equity, and its borne out. The guys and gals 5-6 years older than me did great, but everyone at my level is stagnating
  3. Your career path moves a lot faster in banking. I will make MD this year and am in my early 30s. It would have taken much longer to make MD in private equity.

Also, I get calls every couple months from various PE firms asking me to make a switch, so its not as if its impossible, but right I'm now, even in a negative comp environment, I'm making more money and enjoying work more in banking. I could see joining a PE firm as a senior partner in 10 years or so though.

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Mar 9, 2013
vvslaxman:

Also, I get calls every couple months from various PE firms asking me to make a switch, so its not as if its impossible, but right I'm now, even in a negative comp environment, I'm making more money and enjoying work more in banking. I could see joining a PE firm as a senior partner in 10 years or so though.

Thank you for saying this. From reading past threads I get the impression that many people on WSO believe the path from IB to PE to be very rigid and one way street, as in you must make the transition at a specific time (e.g. 2nd or 3rd year IBD analyst) else you would miss the boat and get pigeonholed. From my experience and observations the actual flow of people across buy and sell sides is actually very dynamic and varied, especially at the more senior level where professionals routinely move back and forth fluidly bringing with them their years of experiences, track records and rolodex of industry relationships and contacts. If you have unique skill sets and extensive relationships, then you are a potential rainmaker and firms from both buy and sell sides would want to have you on their team so you can start making money for them from the get go.

Mar 9, 2013

By the way, I agree with the comment above.

As much as I disliked the day to day work, the stint in PE made me a much better M&A banker.

Mar 9, 2013

I have spent my whole (rather limited) post MBA career on the buy side and find that I cannot seem to break into the sell side. My sense is that it is easier if you have previous IB experience - without it, very difficult even from the buy side.

Mar 9, 2013

have heard of people doing this. I personally won't do it because banking bored the shit out of me. Also, I think going back to banking usually apply to PE people though. For hf guys they just go to research of some sort. Once you are doing research on the sellside, it's actually very similar to what you are doing in a hf except you gotta lie in your clients' face about how you feel about the company...

Mar 9, 2013

I'm toying with the idea of attempting to do this. I did 2 years in the IBD group of semi-reputable but not top shop. I went on to do PE in a smaller city for personal reasons, but would now like to move to NY.

I think it would help me build a network in the city, improve branding of my profile, and may be easier to do than lateraling to a fund directly given the greater need for heads at banks. I'm curious to hear if anyone else has done this or has contemplated doing this.

Mar 9, 2013

Was your shop in NYC, and would you return to same group or take any desk that matches your seniority ? I presume you are trying to get back through your contacts / network. Also, why not just skip the middle man and lateral directly into NYC PE, vs. NYC ibanking? Are you trying to go back permanently or jump back into PE after a few years

Mar 9, 2013
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Mar 9, 2013