Buy side research overview
The research division of an asset management firm on the buy side is responsible for generating investment recommendations to be used in internally managed funds and portfolios. A career in research is very demanding with associates/analysts often working 70+ hour weeks. There is a lot of competition for positions, the compensation is solid, and the work is extremely cerebral. A role in buy side research is similar to that of equity research at a bank, however it has a more internal focus.
The personality of someone who would thrive in a research role at an asset management firm has the following character traits:
- Works independently
- Detail oriented
Preparing for a job in buy side research is similar to equity research. We have organized the most common interview questions from a wide range of sources and provided the answers you need in our equity research interview guide.
The main entry point for research positions is an associate.
Associates on the buy side are recruited from MBA programs around the world as well as from sell side equity research pools. An associate typically spends for 3 to 4 years in that position, until they become an associate-analyst, and finally an analyst.
On the buy side, associates and analysts often stay in a research role for quite some time. This usually moves moving up from associate to analyst. Another common move is to go private equity or start your own investment fund. Once on the buy side it’s common to stay there.
Below is range of compensation you can expect to earn in buy side research. It should be noted that there can be a wide range based on the firm, the year, and the city you’re working in.
Associate: $120,000 to $200,000 (base salary plus bonus)
Analyst: $200,000 to $1,000,000+ (base salary plus bonus)
The CFA® credential is extremely valuable for buy-side research roles.
Additionally, taking financial modeling courses is a fast way of learning the practical skills that are required for the job.
It’s important to begin with a strong understanding of accounting fundamentals. From there you should have a solid Excel crash course under your belt, which will teach you the basics including shortcuts, formulas, and functions. Beyond that, you can progress to more advanced courses, which will teach you sensitivity analysis and industry-specific modeling. By taking a few courses you’ll learn about various industries and see different types of model.
The best value for a wide range of courses is CFI’s Full Access Bundle.