Buy Side Analyst

Buy side analysts work for fund management firms, doing research and submitting recommendations

What is a Buy Side Analyst?

A buy side analyst is an analyst who works with fund managers in mutual fund companies, financial advisory firms, and other firms, such hedge funds, trusts, and proprietary traders. These firms buy large portions of securities for fund management. Recommendations made by buy side analysts are confidential and not be shared for public consumption, unlike sell-side equity research.

Compare the buy side vs sell side.

 

What do Buy Side Analysts do on the job?

Buy side analysts perform financial research on companies, deriving formulas and strategies that will help the buy side firm earn the highest risk adjusted return on their capital. Analysts are usually engaged in reading current news and trends, tracking down valuable information, and building financial models.

They will determine how favorable an investment seems and how good it fits with the fund’s investment strategy. Their recommendations will be based on this research and analysis and made exclusive to the firm. The success of a buy side analyst is measured by the quality of their financial modeling and analysis and recommendation to the firm.

An analyst will also need to source data from reliable sources. Bloomberg is one of many. Peruse this compilation of Bloomberg data to enhance your financial analysis skills.

 

buy side analyst financial model example

 

To prepare for a career on the buy side, launch our financial modeling courses now!

 

What institutions does a Buy Side Analyst work for?

Buy side firms are investing institutions that purchase securities and other assets for the company as well as for their clients. They are usually non-brokerage firms and can be bigger in terms of operations, although the number of analysts employed may be smaller. They employ buy side analysts and portfolio managers who work side by side in order to add value to the business. Such firms include the following:

  • Mutual Funds
  • Pension Funds
  • Hedge Funds
  • Private Equity
  • Growth Equity
  • Venture Capital
  • Institutional and Retail Investors

 

How to Know if the Buy Side Analyst Job Fits?

Being a buy side analyst is more about providing research and recommendations of equity portfolios to fund managers within the firm in order to help them decide which investments are valuable or risky. Buy side analysts with higher skill-sets and greater knowledge earn higher pay than sell side analysts do. The following skills are needed:

  • Strong intellectual eye for investment opportunities
  • Consistently monitors market developments
  • Able to create productive, timely, and high-quality reports for investment decisions
  • Able to analyze risks and industry characteristics
  • Able to constantly monitor portfolio performance
  • Always up to date with global and economic trends

For more on what the job is like, explore our interactive Career Map.

 

Additional resources

Keep learning and preparing for a career on the buy side.  These additional resources will help you on your way to advancing your career: