IS THE BUY SIDE REALLY FOR YOU ?

I would say that 95% of the sell side candidates I have spoken to over the last 18 years have told me that they are looking to move to the buy side. The buy side can be amazing and for the right person it can deliver career satisfaction. But the buy side isn’t for everyone, some people are better suited to the sell side and this isn’t a bad thing either. So here are some things to consider when thinking about a move.

Are you willing to make sacrifices ?

There is a lot of competition to move to the buy side and few opportunities, which means the timing may not always be perfect for you. If you really want to move, take the opportunities when they come to you as there may not be another chance. This can in some cases mean leaving before a bonus is paid and for senior candidates, leaving behind equity. Not everyone is prepared to, or able to do this.

In most cases buy side firms have a different pay structure which requires you to take a cut in base salary from your current. Therefore, if you want to move to the buy side only if you get a rise in base salary, pursuing a buy side move may not be for you.

Walking into a Hedge fund does not make you a millionaire overnight

Buy side firms are focussed upon performance, if you haven’t worked in a buy side role before there may be an adjustment period of 1-2 years before you actually make an impact on fund performance. This means that your compensation may actually be better in the short term if you stay on the sell side therefore you should come to terms with this and be prepared to move on flat when pursuing the move.

If there are ups, there will be downs

I often get asked what a typical hedge fund bonus looks like. The truth is, it could be 5 or 10 times your base salary, it could be zero… success of Hedge Fund strategies often runs in cycles therefore they have to capitalise when the market is favourable and pull together when it isn’t. If you constantly look to move when the funds you work in aren’t doing well, you may find that firms won’t want to hire you because your CV is too jumpy, firms want you to be prepared to stick with it when the going gets tough.

Does title and status matter to you?

Smaller funds have a flat structure and often fly under the radar. There’s usually no place for super stars, the team assistant is as important as the fund manager.

Are you someone who likes to see a clear path to progression?

Promotion within a Sell side firm often comes with tenure, whereas many buy side firms offer progression based upon performance. This is great for individuals who are confident in their skills and want to progress quickly with no glass ceiling but doesn’t necessarily appease individuals who require more surety or who are motivated by clearly set out goals.

Is the buy side that different to the sell side?

For research/investment roles, they can be, but In some cases, no. Take a sell side Economist moving to a Long only Asset Manager for instance, depending on the firm the role may not really be that different or prestigious and could even pay a lot less. For those working in a quantitative field the sell side can in most cases offer much more when it comes to resources You should always understand all of the elements before pushing for a buy side move as in some cases the sell side may actually be better for you or your career.

So, in conclusion, weigh up all your options before pursuing a buy side role, it may not be for you and that’s not a bad thing. Equally, if you do have a burning desire to move to the buy side don’t expect this to happen entirely on your terms, you may need to be opportunistic and prepared to compromise.