Buy Siders

If you are an analyst on the buy side, what is your role like? Are you primarily following a set of companies, similar to what you would do on the sell side, or are you hunting for value across sectors (i.e., a generalist)? If so, how many good ideas are you expected to find per month or year? What are you graded on?

No buyside analysts here?

Our analysts cover multiple sectors. They look at and do work on individual stocks that they find compelling or at the request of the PM.

hausm49008 Wrote: ------------------------------------------------------- > Our analysts cover multiple sectors. They look at > and do work on individual stocks that they find > compelling or at the request of the PM. Do you know how they are evaluated?

No set number of ideas but every year I am expected to contribute more to the portfolio. I would estimate that currently 50-60% of the positions in the portfolio originated from my work.,798325,page=1 This may be helpful for you.

It varies from shop to shop. Analysts at larger, multi-strat shops typically focus on one sector or niche, whereas those at smaller funds typically come in as generalists. I would say that the latter group are initially exposed to ideas with the help of the PM; as time goes on, though (i.e., 3+ years of working in such a role), one should be expected to take on more of an independent role. In my experience, assuming the analyst has less than 5 solid years of buy side experience, his compensation will not be based on individual performance. One specific situation comes to mind in which a friend at a sub $1B hedge fund was given essentially no bonus last year as a result of the fund being down >15%, despite the fact this his ideas were positive on the year. In fact, I do not know one instance in which the analyst pay was based on individual performance. I’ve only come across such instances in regards to PMs and very senior analysts.

JTLD do you work for a big fund or a small one?

Depends how you define “big” or “small”.

JohnThainsLimoDriver Wrote: ------------------------------------------------------- > Depends how you define “big” or “small”. Big = more than 12 letters in the name Small = less than 6 letters in the name

If big = more than 12" then I’m huge.

JohnThainsLimoDriver Wrote: ------------------------------------------------------- > If big = more than 12" then I’m huge. What is a large size dominos pizza? Fiery Hawaiian perhaps?

Here is how my shop works… We basically have multiple teams that cover a broad sector…We dont have PMs…an analyst works on something he thinks is compelling and finds another analyst to be the partner on it. They pitch it to the voting committee of whatever fund they are trying to get it bought in and it is either approved or not approved. There is no set number of stocks that must get bought over any set time frame…but their bonus is directly tied to how well the stocks they pick perform. There is a big long algorithem to find out exactly how much they will recieve. The partner also gets a cut of this. In addition, if the stock goes to the crapper…they can have a negative bonus and will not be able to get a bonus until they work their way back into positive territory. Most of our sector groups have their own funds…but we have one fund that is a pretty big position…1% ends up being close to 60mm…so if they make a double in that…their bonus will be pretty sizeable…75-100K for that one stock. Most analysts have 4 or 5 stocks in a portfolio at any given point in time…some have many more if they buy something in their own fund. As as associate…you also get a cut…(like the partner), but not as big. You end up making like 5 or 10 bucks for every 100 bucks the head analyst makes. Can be pretty big if the analyst has a good year. Not sure what the largest associate bonus has been…but i’m sure its has exceeded 100k. Again, this is entirely performance driven so for every big bonus…there is some guy who has gotten whacked (the associate in financial sector this year) and he is in negative territory and is better off leaving for a new job in many cases b/c he’ll never work hsi way out of that negative bonus.

Somewhere over 100K is the largest bonus an associate has ever made at your firm? Ouch.

Our firm is basically a group of analysts and then one PM and one head of research. The analysts generally work on ideas alone but sometimes work together and then pitch it to the pm & head of research. Everyone has a specialized sector, but they research outside of these sectors. For instance we’ll have a guy in biotech, but he might bring up a media name (etc) so they aren’t limited. During reviews, they go through each name and it’s profit/loss–so the bonus is directly tied to that. I second JTLD’s statement about the 100k bonus, that seems a bit low.

This didn’t happen at my firm, but at a friend’s hedge fund they had a good year in 2007 and all of the secretaries got a 150K bonus along with their regular compensation.

JohnThainsLimoDriver Wrote: ------------------------------------------------------- > Somewhere over 100K is the largest bonus an > associate has ever made at your firm? Ouch. That’s because anybody with talent is no longer an assoc and has made the move to analyst. Its a 2 year window - either you move up or you move out. 100k bonus for a 24 yr old right out of college (2 yrs actually by the time they make assoc)…that is solid…especially when not in a big city and rent is $500-$700 month for a one bedroom.

You live in a small city and pay $700/month for a 1BR apartment? Ouch. No wonder the associates are hurting for cash.

how ya been jb? long time no talk.

Interesting, thanks for the feed back guys. Sounds like it varies a lot. That helps put things in perspective for me.