| Topic Name: |
Buyside Compensation |
| Message Name: |
buyside v sellside |
| Date Posted: |
05/09/2002 |
| In Reply To: |
Could you give me an idea of the type of firm fall under the "buyside" heading. Is it mainly mutual fund houses or does it also include IB's, commercial banks etc.?
Just curious.
Thanks
|
| Message: |
As a general rule, the buyside is anyone who manages money--mutual funds, pension funds, even hedge funds. I would even consider the asset management arms of IBs to be buyside i.e. Goldman Sachs Asset Management.
The sellside is generally considered to be the equity research department of IBs. They are "selling" securities to portfolio managers via their research, but don't manage a portfolio themselves.
One of the big differences between the buy and sell sides is that the sellside has a marketing aspect to the job. They are paid out of the trading pool and banking compensation for deals they are on (although that may soon change). Buysiders are compensated directly from the management fees. This difference in compensation sources is also the reason some people complain about the objectivity of sellside recommendations. But there are some great sellside analysts. Because there are fewer positions available, the competition is more intense, the compensation is generally higher, and those that succeed are often very talented??-although I??ve known a couple of questionable analysts who were just great marketers, but that??s part of that job.
Hope this helps.
|
|
