Buy Side Analyst

Buy side analysts work for fund management firms, doing research and submitting recommendations on prospective market investments that will bring value to the firm and its clients.

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 firms, such as: private equity funds, hedge funds, trusts, and other proprietary traders. These firms buy large portions of securities for fund management. Recommendations made by buy side analysts are confidential and should not be shared for public consumption.

How do Buy Side Analysts Perform Their Job?

Buy side analysts perform financial research on securities, deriving formulas and strategies that will help the buy side firm win the market. They 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 coincides with the fund’s investment strategy. Their recommendations will be based off this research and analysis and made exclusive to the firm. The success of a buy side analyst is measured by the amount of profitable recommendations made to the fund.

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.

What Financial Institutions do Buy Side Analysts 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.