Starting off on the sellside research vs buyside (with long run buyside aspirations) - Help Needed

androidparagon's picture
Rank: Baboon | 116

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.

Comments (26)

Jul 27, 2015

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.

Jul 28, 2015

-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.

Jul 28, 2015

interested

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Jul 28, 2015

How is small 100 billion?

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Jul 28, 2015

yes and yes

Jul 28, 2015

Thanks for the info guys.

Mr. Skilling:

I interned at a buy-side place, but went full-time as an analyst on the sell-side.

Do you have any intention of moving to buyside in the future? Is so why? If not, then why not?

Jul 28, 2015

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!

Corporate financial/business analyst looking for career/MBA/CFA advice.

Jul 28, 2015
fc200v:

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).

Jul 27, 2015

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.

Jul 28, 2015

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.

Jul 28, 2015

lol i guess it's not small? BlackRock has like 3 trillion under management no?

what's the hours like in such a position?

Jul 28, 2015

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.

Jul 27, 2015

You'll likely be doing much more in-depth and intense modeling on the sell-side.

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.

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.

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.

Also, most buy-side models are generally created from one template.

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.

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 have this opportunity on the buy side, assuming you work for a decent-sized shop.

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.

100% agree with this.

Jul 28, 2015

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.

Jul 28, 2015

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.

Jul 28, 2015

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.

Jul 28, 2015

I agree with Vagabond85, and its great that you have complete knowledge about your new work.

Jul 28, 2015

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.

Jul 28, 2015

"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?

Jul 28, 2015
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