Sell-side analysts produce investment research, financial estimates, price targets and recommendations for clients. Buy-side analysts do much the same work but for the purposes of managing money such as mutual funds, pension funds, private equity funds and life insurance companies. Buy-side recommendations are used to direct investment and are not available to the public.
Sell-sideIn many ways, sell-side analysis is a marketing function that provides a value-added service to clients who use a firm's trading desk. They interface to a company's management, develop investment models, valuations and opinions. Such information may be valuable to a firm's clients as analysts typically develop insights not available in the media. Sell-side analysts may try to maintain a good relationship with management in order to seek clarifications on publicly available information. Management may occasionally shut out sell-side analysts who issue negative price targets and recommendations of their firm. Sell-side analysts may also develop a network of contacts that may include experts, industry insiders and customers.When a sell-side analyst is wrong, their firm may see little impact. However, they may loose clients who are disappointed with the bad advice.
Buy-side AnalysisBuy-side analysis is far more critical to the performance of a firm as the firm makes large investments based on their work.In many cases, buy-side analysts develop far more complex strategies than the "buy", "hold", "sell" recommendations that come from the sell-side.
Investment analysis for the purposes of investment management.
Investment analysis for clients.
Equity research analysis
Equity research analysis
Private equity fundsMutual fundsHedge fundsPension fundsLife insurance companies
This is the complete list of articles we have written about risks.
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