[Nick0]

I'm interested in fundamental research, and browsing the websites of the main banks I've noticed that they all have 2 kind of research positions: research in IB (together with sales and trading) and research withing their asset management division.

What is the main difference between them? Which one is "better"?

[Barzini]

sell side vs buy side??????????

[anfitrion]

AFAIK, research in IB is done mainly for clients, whereas in AM it is done for internal purposes.

I would say that at the beginning both roles may not be that different, but soon enough IB will turn out to be more "make sure you sell your idea" whereas AM will focus on "make sure your idea is good".

Which one is the place to be? I would say AM because you actually need to be good at research and generate alpha. However, if you want people in the City to know your name, you have a better chance in the sell side.

Take all this with a pinch of salt as I'm uni at the moment. I will be interning in ER (IB) this summer and I did not apply to AM roles because I couldn't see research positions as such, but only random rotational programmes.

[ReverseConvertible]

In any case equity research is a decadent role. Hope you guys already have a good exit strategy...

[V1000]

Originally Posted by ReverseConvertible

In any case equity research is a decadent role. Hope you guys already have a good exit strategy...

Can you elaborate on this? Wouldn't a typical exit option from equity research be HFs? Cheers.

[KLL]

I was told that its better to start sell-side.

[fahadraja]

Originally Posted by ReverseConvertible

In any case equity research is a decadent role. Hope you guys already have a good exit strategy...

That is an out of date statement-you are about 5 years too late with that. Agreed the role of ER diminshed and became less attractive as a result of mr spitzer and the chinese wall but remember that ER remains a pretty important function in any decent sized bank. I agree the sector is not a growth area in IB but still valuable. You think Traders develop all their own ideas? No. Alot of the insight comes from the ER within the banks and it is they who pitch the ideas to the traders to execute(if its possible to execute the ideas)

And the exit options are less limited than CF but if you are good, HF are not a problem. You can even jump to the CF if your sector expertise is valuable. Buyside will always need ER; they are the fundemental drivers of the business model.

IMO, on balance it is one of the best areas to begin in within banking. Hours are pretty fixed, pays is good(though not as high as many other areas within IB) and you actually learn a fair amount.

[Benh842]

Originally Posted by fahadraja

That is an out of date statement-you are about 5 years too late with that. Agreed the role of ER diminshed and became less attractive as a result of mr spitzer and the chinese wall but remember that ER remains a pretty important function in any decent sized bank. I agree the sector is not a growth area in IB but still valuable. You think Traders develop all their own ideas? No. Alot of the insight comes from the ER within the banks and it is they who pitch the ideas to the traders to execute(if its possible to execute the ideas)

And the exit options are less limited than CF but if you are good, HF are not a problem. You can even jump to the CF if your sector expertise is valuable. Buyside will always need ER; they are the fundemental drivers of the business model.

IMO, on balance it is one of the best areas to begin in within banking. Hours are pretty fixed, pays is good(though not as high as many other areas within IB) and you actually learn a fair amount.

I agree, well summed up. Research is integral to markets divisions operating beyond pure execution.

[ReverseConvertible]

Well, even if I agree that you need someone to look at the clouds and predict next year's weather... there is way too much research out there adding little if no value, and moreover, there are a ton of accountants in the Big 4 willing to do the same job (probably better) for half the price.

[Benh842]

Originally Posted by ReverseConvertible

Well, even if I agree that you need someone to look at the clouds and predict next year's weather... there is way too much research out there adding little if no value, and moreover, there are a ton of accountants in the Big 4 willing to do the same job (probably better) for half the price.

In the same way the Big 4 could do corporate finance (probably better) for half the price? Oh yeah, look at the Deloitte Corporate Finance team, evidently the market leader.

It sounds like you think global markets divisions should be execution only. Bizarre.

[fahadraja]

Originally Posted by ReverseConvertible

Well, even if I agree that you need someone to look at the clouds and predict next year's weather... there is way too much research out there adding little if no value, and moreover, there are a ton of accountants in the Big 4 willing to do the same job (probably better) for half the price.

Interesting, is the emboldened comment fact or is it, direct comparison to your analogy, mere speculation? Researchers working in IB will always command a premium; their hours are much longer and their output has greater potential to generate income, through trading, based upon the insight. Furthermore, the job security afforded to the Big4 payroll is why they can afford to pay less than banks, where job insecurity is an inherent and all to obvious risk to be faced with.

Back to the thread. If you are able to get into a substantial buyside fund with good development opportunities it may be worth taking, these opportunities are hard to come by. The job is pretty well paid and the trajectory(fund manager) is pretty sweet The fund manager path is better than at an IB, here you only ever manage research unless you work for in-house asset manager. The research will have more long term implications than sell side research, which is what alot of people want in their roles. Buyside, at a good firm, is harder to get into than sell side IMO. Some funds seem to be exclusively oxbridge especially many of the of the edinburgh based funds. But if you get into either than you are doing well but if you get both, then it is a good decision to have to make between the two.

[oblivious]

Some people are very misinformed here. I'll type something more out some other time as I must sleep. Some of the best sell-side analysts right now are paid more than many long-only PMs, analysts and those in S,T,CF. Sell-side research is there to service the institutional client base. They pay for research through dealing commission. Internal clients are secondary.

There are many issues with sell-side research blah blah blah which can be googled.

[sumitk87]

any views on AM firms vs AM divisions of IBs...

ie whats the better option or main difference between say BlackRock/Fidelity and JPMorgan/GS Asset Management?