In the Investment Banking industry, it is essential to know the difference between the buy side and the sell side. In fact both are indispensable to each other. Sell side which refers to selling the securities to investors makes up one half of the finance market and the Buy side which refers to institutional investors who buy the securities makes the other half. That’s the Buy Side Sell Side overview.
What is Buy Side?
Buy Side is the side that buy stocks, securities, and other financial products within the scope of strategy of their company’s or client’s portfolio needs.
It includes investment managers, pension funds and hedge funds and refers to the companies that purchase securities.
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What is Sell Side?
Sell Side is the other side of financial markets that assist the investing market with recommendations and responsible for creating, promoting and sale of traded securities.
It includes investment banks, consulting firms and companies and refers to firms that issue, sell or trade securities.
What’s the Difference Between Buy Side Analyst and Sell Side Analyst?
Both Buy Side and Sell Side Analysts are mainly responsible for researching companies and industries to handicap the winners or losers but there are significant differences between them.
Sell side analyst creates public reports and responsible for determining if the investment option should be recommended or not.
Buy side analyst, on the other hand, creates reports for the company internally and responsible for understanding whether the investment option is in line with the company strategy or no.
Buy Side vs. Sell Side in Equity Research
Sell side in equity research refers to the companies that closely track stocks, their performance and forecast and the companies that are usually focused on a particular industry.
Buy side in equity research refers to the companies that would make the investment decisions according to the performance of the markets, performance of the stock and other macro-economic factors.
What’s the Role of the Sell Side?
The main roles of Sell Side include;
- Providing stock research of listed companies.
- Guiding corporate customers on large transactions.
- Building relationships with companies.
- Facilitate capital increase, including debt and equity.
- Creating liquidity for listed securities.
- Advising on mergers and acquisitions (M&A).
- Financial modelling and valuation.
- Marketing and sale of securities.
- Help customers enter and exit positions.
What’s the Role of the Buy Side?
The main roles of Buy Side include;
- Making investment decisions.
- Financial modelling and valuation.
- Investigation on investment opportunities.
- Management of the clients’ money.
- Growing assets under management (AUM).
- Obtaining the best risk-adjusted return on capital.
- Obtaining investors and capital.
EquityRT, as one of the leading market analysis platforms, provides global data coverage and the tools to make a perfect stock analysis. EquityRT helps buy side and sell side analysts with fundamental ratio analyses, peer comparison, stock screening, macro data analysis, real-time company and sector news, real-time FX rates, and much more.”
Source: EquityRT MacroAnalytics
Disclaimer: The information in the publication is not an investment recommendation and it is not an investment or an offer or solicitation to purchase or sell any financial instrument. Reasonable care has been taken to ensure that this publication is not untrue or misleading when published, but EquityRT does not represent that it is accurate or complete. EquityRT does not accept any liability for any direct, indirect, or consequential loss arising from any use of this publication. Unless otherwise stated, any views, forecasts, or estimates are solely those of the author, as of the date of the publication and are subject to change without notice.
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