Sell side versus buy side

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jakethemuss

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Can anyone shed some light on the essential differences between a buy side and sell side equity analyst in terms of function, hours, pay and future career paths? Would either of the two be a reasonable springboard into M&A at a later date? Finally, would the CFA be a favourable qualification for either role? Thanks
 
I work for United Technologies in CT and have been trying hard to get into M&A. I am about a third of the way through with my MBA and will take the CFA Level I exam in June. About a handful of managers and directors of M&A departments at UTC has told me that they do not see any advantage that a CFA would have when applying for an M&A position. They would prefer to take an MBA from a top tier business school, or an MBA from a lower tier business school + relevant work experience. They would also take experienced analysts from investment banks (sell-side) whether they have a CFA or not; there are a few analysts in their departments who come from investment companies and insurance companies (buy-side); most people seem to come from the sell-side (these are the ones that were tired of getting beaten up at investment banks and went to UTC for an M&A position with less stress and heartburn).
 
Your managers are correct. M&A departments could care less about a CFA. There is not much relevance. Of course, having a CFA couldn't hurt, but it is definately not worth the three years of effort. I work as a sell side research analyst where my employer wants us to get a CFA, but still I've found that 75% of the stuff I've learned is irrelevant to my job. I'm currently on level 3. So in short, if M&A is really your goal don't start the CFA program. It'll just be one big fat waste of money and time. After two years of this, just looking at the Schweser books on my floor gives me a migraine.
 
Your managers are correct. M&A departments could care less about a CFA. There is not much relevance. Of course, having a CFA couldn't hurt, but it is definately not worth the three years of effort. I work as a sell side research analyst where my employer wants us to get a CFA, but still I've found that 75% of the stuff I've learned is irrelevant to my job. I'm currently on level 3. So in short, if M&A is really your goal don't start the CFA program. It'll just be one big fat waste of money and time. After two years of this, just looking at the level 3 Schweser books on my floor gives me a migraine.
 
ask Lion, he is an Expert on the differences between the buy side an dthe sell side.
 
As a rule of thumb: Buyside: 8am - 6pm, Sellside: 7am - 7-9pm. (Of course this varies significantly job-to-job)

Buyside pays much less, but the hours are shorter. Job security is prob higher, and you get treated better.

Sellside is a potential springboard to M&A. Buyside is not. CFA will help with both, but not esp relevant to M&A.
 
Life as an index fund manager is great! All you have to do is: match the performance of your idex (i.e. S&P); you don't have to do the extra work and outperform your index! Their hours sound good to me. I'll take that over the constant beating the managers get on the sell-side investment banks.
 
"8am - 6pm? no wonder so many funds can't even beat their index"

Yeah, I often find the 11th hour of my day is my most productive....
 
deadcat, totally agree. iguana, you seem to confuse long hours with beating the bench.

smart hours, not long hours.
 
On the sell side, when they have a Sell recommendation on a stock and it goes up 30%, then they can issue a note with a Hold rating and say that they wouldn't recommend buying at these levels. WTF!!!!!!!
 
Sell side analysts do work from between 12-15 hours per day, including many weekends. The hours are absolutely brutal.

You need to love what your doing and be good at it to be a sell side analyst, otherwise, you'll be gone within 6 months.
 
I prefer sell side - more stress is better - long hours (and smart hours ;) )- that's cool.
After my experience at High Yield Origination Desk on my first day at investment fund I had an impression that they all are asleep.

Spice up your life!

You will always have the opportunity to work on buy side after sell side (well, the opposite is also true :) there is always an oppotunity :) ).
In general: it is more difficult to sell something than to buy ;) (well of course, I know,... we should buy a good security (or whatever) :) )

And to love it you need to do it well, very well. And this comes with time. Depend if this would happen earlear than in 6 months :)

P.S. My most productive/creative hours are 8pm-12am.

--
Keep it simple - JUST DO IT
 
well, for what its worth, almost everyone I know in ER is happily married, whereas most bankers I know are divorced. So even though ER hours aren't the best, at least its not so bad that your wife will leave u b/c you're never home.
 
xabat77
yep, you need to consider your age too

P.S. I am almost asleep.... what is ER?

--
Keep it simple - JUST DO IT
 
xab, man you gottit all worked out! now you just got to find a wife!
 
Honeslty - there is probably little difference between sell-side / buy side - especially in fixed income (high grade/ high yield) as there is less publishing now and more desk analyst roles - which are pretty much no different than the buy side.

I would say that both are good for your career as long as you are at a good shop. you can work long/short hours anywhere depending on the firm and the group. Best thing to do is find very smart people and learn from them - that should be your primary focus (as i assume no one here is head of anything other than the coffee runs)
 
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