Institutional / “buy-side” overview
Institutional asset managers, which are often referred to collectively as the “buy side”, offer a wide range of roles that fall under the corporate finance umbrella:
The term buy side means a firm involved in the purchasing of stocks, bonds, derivatives and other securities from a sell-side bank/dealer. As the name implies, these institutions manage the money that’s being invested in markets. Professionals are typically very analytical, cerebral and professional. They are also often quite enduring of the long hours associated with the job of a buy-side professional. They are typically compensated in a performance based structure based on their investment returns / track record. This opens up room for potentially high bonuses and compensation.
The institutional section of our corporate finance career map is characterized by individuals who are highly competitive, ambitious, smart and motivated. You typically move into the buy-side after working on the sell-side; however, some institutions are large enough to hire straight out of school.
A buy side analyst will typically research and make recommendations about profitable investments. An analyst will not usually conduct the transaction themselves, but will, instead, pass the recommendation on to the money manager of the fund they work for. It is the job of the buy side analyst to also assess how well each investment aligns with the fund’s investment strategy, on top of arranging different investments based solely on profitability and returns.
It is in the best interest, naturally, for a firm to retain any information and advice provided by a buy-side analyst, so that the fund can remain competitive. As such, the word of a buy-side analyst is often highly trusted, lauded, but also monitored. A buy-side analyst must maintain a high record of reliability, lest their recommendations be taken as faulty and their reputation weakened.
However, the career path of a buy-side analyst is indeed interesting. While highly challenging and full of pressure, this career is also highly rewarding and prestigious. A buy side analyst’s success will be determined by the amount and consistency of profitable recommendations they make for their fund or company.
Explore each of our buy-side career profiles to discover which path is right for you. The buy-side field is a rather large one, with many different sub-fields, like private equity, mutual funds and pension funds.