Skills to get to the Buy-side

Water Cooler Careers
#1

All - this is a fairly thought provoking question that I haven’t seen discussed in detail. I realize this may however require a rusty hacksaw.

I’m in a role that’s similar to sell side equity research but it lacks the modeling and the hours are better. In pursuit of getting to the buy-side (likely not a top shop), I’ve come up with a comprehensive list of skills to develop. Curious to have this list critiqued/make sure I’m not missing anything. Thanks!

-Valuation methods (understanding right multiple given risk, growth, etc)

  • Turning qualitative commentary into quantitative metrics (I.e. model)

  • Industry knowledge -Modeling (dcf/relative value/precedent transaxtions) -Understanding correct risk profile (asymetric) more upside than down -How to articulately detail investment thesis -Writing precision -Clear thought process -Ability to discern key industry drivers -Management, seeing what’s real/what’s not (critiquing management teams) -Networking ability

#2
#3

Thanks for replying. I’m in a research role now (think Fitch/Moody’s/something along those lines) and am solicited by the sell-side pretty regularly. I’m trying to avoid the sell side if possible, though I haven’t quite made the cut for the buy side shops I’ve interviewed at. So, really trying to augment where my experience may be “weak.”

#4
#5

Okay, that’s fair. Thanks again

#6

I don’t recall any of the buyside people I interact coming from IB, but many come from ER. Why are you avoiding it? If it’s because of the hours, you may not actually want buyside. I wouldn’t consider a Fitch analyst similar to ER, but maybe others do

#7

Yes. I personally would never hire a banker for a buyside job. Huge preference for former sell side research

#8

wow really. I guess every company/fund is different. Our fund hires IBankers only…well 5 out of 6 so far.

#9

^hacksaw…send your bonus to itera

#10

nah man my bonus is chump change to many of the big shots on AF anyways. I like my bonus… I will keep it.

#11

Except for PE roles, I think research is a much better background than IB too. But it surprises me how many fund job postings specify IB experience.

#12

Agree on PE. I was referring to buyside typical buy/sell equities

#13

How many years of SS ER do people typically have before they are considered by the BS?

#14

Could vary greatly. I’ve seen 1 year, I’ve seen 7 ,I’ve seen 40 yr old associates who get stuck in sell side. But if you are smart hard working, id say 3-4 years in sell side you start to know what you’re doing.

#15

What matters is whether your “skills can pay the bills”.

#16

In my opinion, the #1 skill to get you to the buyside is the proven ability to be profitable with a portfolio. I’m taking Anton Kreil’s advice on how to get into the buyside. He basically says that you need to have a proven, verifiable record of profitable trading for atleast 12-18 months. Of course, this is his business now, so it might seem like biased advice. But I believe he formed a company around the best way to train skills for the buyside. This is my plan to get employed by a hedge fund.

#17
#18

Skills to get to buy side is ability to make money and some decent pedigree in terms of education. No one is going to give a shit if you lose money everytime you trade.

#19

As if everyone cares that all their buy side people actually make money. Every single fund manager, in the back of their mind, knows that the #1 goal is asset accumulation and retention. If you are profitable, of course that’s even better. But look, most managers can’t outperform the benchmark, yet they are still around. You get into the buy side by being able to walk and talk like a duck. There’s always a way to sell your good calls (and sweep away your bad calls) as a sell side analyst. The marketable people just have 1) better education, 2) work experience at a more prestigious company, and 3) good ability to communicate and sound credible.

#20

This is true for mutual fund at least…