Starting off on the sellside research vs buyside (with long run buyside aspirations) - Help Needed
So this summer I'll be applying for full time positions as a London based grad at a top target university. Will be applying primarily for fixed income functions at BBs and top asset managers.
I would like to work buyside eventually but straight out of uni sellside research seems pretty attractive given the better pay, possibly larger classes and similar work at the junior level. I was hoping I could get some info on the ease at which the transition can be made down the line and whether it's worth it at all? How would the hours match up? Would it be better to just start on the buyside given the opportunity?
All advice and info welcome.
I interned at a buy-side place, but went full-time as an analyst on the sell-side.
Hours: I currently work 75 hours a week on average and more during earnings. This can fluctuate from week-to-week depending on industry activity. At my internship, the most I saw analysts or PMs work was probably 50 hours. Pay: Depends on a firm-by-firm basis. I was interviewing at some buy-side shops (hint: Patriots fans), that paid likely a bit more than I make on the sell-side right now. I get paid a base salary and a bonus worth XX% of my base salary each year, not sure how salary/bonus works on the buy-side. Classes: Larger classes on the sell-side generally. However, if you are an off-cycle hire you may only be coming in with one or two peers. At the big buy-side firms in the NE, it also seemed like they wanted to pump me out into B-school in ~3 years, and I really wasn't into that. Responsibility: Depends on the firms. I took my gig on the sell-side because I would have a lot more responsibility starting off (coverage of companies) and I would learn more. This helped me look past the pay issue.
Overall, whether you start on the buy-side or not is a personal decision that depends on a lot of factors (city, pay, responsibility, title, career path, etc). I will say that it appears to be easier to move over to the buy-side after working 2-3 years on the sell-side than to switch over at a later point, but it's not impossible. I've also seen people move from the buy-side to the sell-side, bringing their industry knowledge and contact book with them.
Starting off in buy-side vs sell-side (Originally Posted: 04/28/2014)
My finance experience has been on the buy-side, albeit on a lower level than what ya'll are accustomed to.
I'm going to try moving into ER in 3-6 months and I know one interview question they're going to ask is "Why are you applying to the sell side instead of the buy side" or vice versa?
Maybe it's ignorance, but right now....I don't really care! I just want to get into ER. I don't have any qualms if it's for a mutual fund company or an IB. I don't really even care what sector it is.
Could some of you give me some insights or ask questions that might make my attitude more precise?
-Want to work with a bigger, more well-known firm -Want to get more exposure to sectors and more industry professionals
Your reasons don't have to be real, just believable. They know they'll probably lose you to the BS eventually, but they want a sliver a hope that you'll actually stay.
yes and yes
Will starting out on the sell-side give me broader exposure/more otpionality? (Originally Posted: 12/08/2007)
I am trying to decide between a trading job for a BB, where my primary responsibility would by market-making (although taking prop positions is encouraged), and a prop trading role in a small regional office of a large hedge fund (think Citadel, Fortress, Shaw). Both are good jobs (interesting work, likable colleagues, decent comp) that I can picture myself being really happy in for the next few years. On balance, I'm tilting towards the hf jobs because of the somewhat nicer lifestyle and the (slightly) more exciting work.
I do have a couple of concerns regarding what my career will look like down the road that I would appreciate your insights on. Specifically: 1) It seems to me that I will get broader exposure by being on the sell-side, as I would be able to see institutional flows, interact with a bunch of different buyside firms, chat with colleagues trading different asset classes, go through formal training programs, etc. Is this true, or do you feel I will have just as broad a learning experience on the buy-side? 2) I also feel that I will have more optionality down the road by staying on the sell-side for a couple of years, and then potentially moving to the buy-side (which would, at that point, obviously be a much better-informed choice than it is right now) - whereas if I start out on the buy-side, I'll probably never go back and will simply be moving around between similar funds. Any thoughts on this?
I should add that I'm currently a grad student with virtually zero finance experience, so obviously the learning experience I will get and the option to move around later in my career carry a lot of weight for me.
Thanks for sharing your thoughts!
Advice for starting on buy side (Originally Posted: 03/16/2015)
In a few months, I'll be starting my first role on the buy side. Before this, I spent four years doing ER at a BB covering the same industry. I have a good idea about the industry I'll be covering and have a pretty good idea of my new firm's culture.
What i'm really looking for is some solid advice in transitioning from the sell side role to a buy side role. Anything regarding the best ways to interact with the sell side, tips for tracking a much larger set of companies (will go from covering 15 companies to well over 100), best ways to utilize industry conferences and events. Really, just anything that's going to allow me to come in and not look like a total idiot.
Any advice or insight is very appreciated. Thanks!
interested
How is small 100 billion?
buyside investment management firm. good place to start a career? (Originally Posted: 11/08/2011)
I am considering an offer from a small mid sized, 100billion, fund for their entry level investment analyst program.
I want to know what the career outlook is for a position like this.
the program is structured to be 3 years. but I don't know what happens after that?
the possibility to move up within the firm to portfolio manager seems remote considering ratio of analysts to managers.
So what kind of exit opportunities are there from a position like this? would I be able to get into top business school and make it to portfolio management that way? assuming rest of my stats are okay.
any possibility of transitioning to sellside?
if anyone has any experience with firms like this please let me know. Thanks a lot
Thanks for the info guys.
Do you have any intention of moving to buyside in the future? Is so why? If not, then why not?
Your 2nd reason, about wanting to get exposure to more industry professionals is actually a true reason for me. So is FamousTrader's reason about gaining exposure to large-cap management teams.
How is being on SS more client-facing than BS? Wouldn't the BS have more interaction with individual clients since it's their money being invested?
Another thing, and this is a serious question....why does everyone start off with the negative assumption that their employees are going to flee the sell-side and run to the buy-side asap? I myself am on the buy-side now and I'm actually looking forward to trying out the sell-side!
The PM of course will have quite a bit of interaction with the fund's investors, but on the SS it is your job to constantly talk with yours - i.e. buy-side clients. So yeah, SS is more client-facing (well, phone-client-facing at least).
Also ask yourself, "What do I want to be doing in my first gig?"
Here are some differences I've found in my first few years of experience: -You'll likely be doing much more in-depth and intense modeling on the sell-side. You will be publishing these models and sending them to buy-side clients who generally use them as a solid base to input their own assumptions. And they WILL call you out on modeling errors in front of your boss, so you will learn to model well and clean very quickly. During my brief stint on the buy-side, analysts kept their models strictly for proprietary use and rarely even showed them to other analysts or portfolio managers. They will just update them (generally just do a Bloomberg/Factset pull to full out models) and do some minor tweaking after earnings. Also, most buy-side models are generally created from one template. On the sell-side you have the opportunity to create your own models, especially if you initiate on a company. -On the sell-side, you will be publishing research reports, which you won't be doing on the buy-side, unless you're creating a tear-sheet for your pitch to portfolio managers and other analysts. If you really like writing or want to improve your writing and persuasion skills, sell-side would be the place to be. -Something else on the sell-side that you won't have to bother with on the buy-side is marketing. Your senior will go on marketing trips and try to win business. This means you will have to create marketing decks (which can be cool at times, but can suck) in order to provide clients with unique insight. These often serve as a theme for the meetings and provide your best trade ideas and market themes to expect. -On the sell-side you'll have the opportunity to call up CEOs, CFOs, COOs, etc. of the companies you cover and chat with them. You also get to pick the brain of really smart hedge fund/large AM PMs that call into your shop asking for advice on a few names. This is an often overlooked, but underrated part of the sell-side.
I think your thought process is spot on. Agree with above commenter. Especially with your "zero finance experience" a strong case could be made for starting out on sell side, especially if it is with a good firm.
lol i guess it's not small? BlackRock has like 3 trillion under management no?
what's the hours like in such a position?
For SS: You want to be in a client-facing role You want to be an expert of a specific industry You want to do very detailed financial modeling You want to gain exposure to large-cap (normally) company management teams You want to be part of a publishing team as you like the personal accountability associated with visibility of your ideas
And many more.
Best practices for equity research is a great book for how to be a more effective analyst- in other words the stuff outside modeling/accounting/company fundamentals. It hits how to utilize sellside, where to spend your time etc.
Does the program rotate you through any different areas or is it just an investment analyst position they place you based on need? And just how bad is the ratio between analysts and pm's.
I don't think you'll ever really interact with your firm's clients on the buy-side. You'll interact with management, sell-side analysts, and your team / PMs, though.
Disagree with this. The sell-side models I saw were usually very high level and showed little in-depth analysis. Some of the boutique shops actually did outstanding modelling work, but in my experience the BB firms just pumped out generic models.
Absolutely true. Publishing anything on the sell side is like having hundreds or even thousands of people looking over your shoulder. The pressure must be intense.
Not true at all in my experience. For one subsector I covered we used a "one size fits all" model, but other than that almost every model was custom made. A lot of companies do not lend themselves to a generic model.
You also have this opportunity on the buy side, assuming you work for a decent-sized shop.
100% agree with this.
I agree with Vagabond85, and its great that you have complete knowledge about your new work.
I read over the description again. it seems that analysts are placed in one specific group, fixed income, equity, or asset allocation and not rotational between the three.
"investment analyst program" is pretty vague... like cpatters said, is it rotational? who will you be working with? what exactly will you be doing? tbh these questions will probably be best answered by current analysts in the program - can you get access to them?
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