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Ena
Student
Montreal, Quebec, Canada
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Is it good to enter buy-side financial institutions?
Many people think that entering buy-side like private equity should be after 2or3 years sell-side work experience. #investment-management
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3 answers
Daniel Pack
Manager in Capital Markets Finance Operations, Technology and Data Transformation
6
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New York, New York
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Daniel’s Answer
It's not so much that entering Sell side before Buy side is better....just that many Buy side firms look to hire experienced analysts with sell side experience.
Nish Herat
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Nish’s Answer
I would say that it depends on what you're looking for. Also, there are differences within those classifications as well. In general, the pressure is higher on the Sell side. On the Sell side, you're focus is on making money for clients, but also your shareholders. On the Buy side, you're primarily focused on your performance for your clients. If integrity is a big factor for you, that may be something you want to consider, but I wouldn't say the Buy side is filled with angels. Within the Buy side world there's a big difference between working in Private Equity from something like a Mutual Fund. The pressure would tend to be higher with Private Equity, but that's also because more of your compensation is tied to the performance of your assets. So in a sense, even if you're on vacation, you may always need to be available if a deal is happening. My experience was as an intern at an equity Mutual Fund. It was not an easy internship to get. I had to wait until after my first year of business school was over, which was quite a risk. But I enjoyed the experience. I did notice that the work life balance was much less stressful than my prior role in consumer banking. Portfolio Managers, Analysts and Traders generally worked along market hours and I would say the pressure levels were lower. However, I would have expected the long term compensation to be lower than say, Private Equity, or having gone to be a Sell Side equity analyst.
Evan Brown, CFA
Investment Management
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New York, New York
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Evan’s Answer
It used to be the case that only the sell side had strong training programs. So buyside firms would look to snap up sell side professionals who had already been well trained after a few years. However, large buyside institutions are increasingly expanding their own entry-level training programs. This way young professionals to learn the buyside from the ground up. It also enables buyside firms to bring up analysts that share the culture from the beginning. So it's worth looking for internships or new full-time positions on the buyside if that's what you want to do. And there's of course nothing wrong with starting out on the sell side as well.