Buy side analyst definition

What is a Buy Side Analyst?

A buy side analyst  reviews prospective and existing investments for investment funds, such as a mutual fund, pension fund, or hedge fund. Fund managers depend on these reviews when making their investment decisions. The analysis is kept secret, to give the analyst’s employer an investment advantage. The analyst may spend time evaluating the recommendations put forward by various sell-side analysts, as well as conducting her own analysis. The recommendations made by a buy side analyst tend to be slanted in favor of avoiding risk, since the employer of this analyst does not want to run the risk of losing an excessive amount of investor funds.

The Difference Between Buy Side and Supply Side Analysts

There are significant differences between the work conducted by buy side and supply side analysts. First, a buy side analyst is more concerned with avoiding losses than a sell side analyst, who is more interested in spotting opportunities to generate large returns. Also, a buy side analyst keeps her reports in-house, while a sell side analyst writes reports about companies within the industry in which she specializes, and sells the reports to clients. In this case, her buy or sell advice is being spread amongst a large group of recipients. And third, a supply side analyst may be asked by investors to arrange meetings with the management teams of potential investees, which is rarely the case for a buy side analyst.

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