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Can you explain what you mean by sell and buy-side?
by Gatsky 7y ago
Can you explain what you mean by sell and buy-side?
- moomin 7y agoSell: brokerages. Buy: hedge funds. Basically the buy side try to be smarter/better/faster/stronger than everyone else, the sell side try to provide an essential service to the buy side, whether that’s a good platform or liquidity or whatever.
- tomp 7y agoSell-side == banks, selling financial instruments / market access to investors. Buy-side == hedge funds, proprietary trading companies, high-frequency market makers, maybe also VCs, PEs, investing (their own or other people's) money, buying financing / market access / financial instruments from the sell-side.
- deleted 7y ago[deleted]
- osullivj 7y agoSell side are selling liquidity, they're like car dealers who stand ready to buy or sell any financial instrument with buy side firms. As well as the buy side firms listed by tomp above there are also what we call "real money": pension and insurance funds. Unlike hedge funds they are regulated and have to run long only strategies. Can't have pension funds blowing up LTCM style.
- notfromhere 7y agoThey can allocate to hedge funds, but a number like CalPERS divested entirely from alternatives
- osullivj 7y agoMaybe in the US, but that wouldn't be permitted in the UK.
- Tycho 7y agoThe sell side provides liquidity to the market, by engaging in market making and other activities, while the buy side consumes market liquidity (transacting so they can construct/manage a portfolio). So as others have said, sell side typically is the investment banks and brokerage houses, while buy side is your asset managers.