Buy Side vs Sell Side M&A

Difference between advisory roles in M&A

Buy Side vs Sell Side in Mergers and Acquisitions (M&A)

If you are interested in having an investment banking job, you often find people talking about the buy-side versus the sell-side. You may not have asked that question yet, but perhaps you have heard exchanges about the buy side and the sell side. Everywhere you go, there is an attempt to make such distinctions between the two. So, how do these two actually differ?

When you refer to the sell-side, it refers to groups who sell products like bonds, stocks, or the sale of an entire company. Your job if you are on the sell-side is to make investors buy these products, hence the term “sell”-side.

On the other hand, if you are on the buy-side, what you do is raise capital and purchase these securities or companies that are for sale. You raise this capital from investors and from there, you will have to make your decisions as to where you want to invest them and what you will buy.

In terms of M&A, the buy-side means working with the buyers and finding opportunities for them to acquire other businesses.

The sell-side, on the other hand, means working with the sellers who are trying to find a counterparty for the sale of a client’s business.


M&A Buy Side vs Sell Side M&A theme


How Do M&A Advisors Earn Money?

For those who are still deciding as to whether they should be on the buy-side or the sell-side, you may want to know how you can earn money should you choose to be on either one of these sides. You either earn money as an investor, yourself, or as the agent of an investor, and therefore earn through salary and commission. Naturally, you have a higher chance of earning as an investor, rather than an agent.

The buy-side is said to be better when it comes to making money as it gives you to earn more especially when the investments have high returns. This appears to be more lucrative compared to earning commission on sales on the sell-side. But when deciding which side, you do not just consider this factor. Keep in mind that there are differences in other aspects. There are differences in the hours, compensation, and structure of work.


Additional resources

Thank you for reading this guide to Advisor for both buy side and sell side M&A transactions.

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