Quick answer
Buy-side professionals work for investors — asset managers, private equity firms, hedge funds — raising or deploying capital to acquire assets. Sell-side professionals work for investment banks and advisory firms that help companies raise capital, go public, or sell themselves. In an M&A deal, the sell-side builds and manages the data room; the buy-side reviews it during due diligence.
The buy-side includes firms that invest capital, including hedge funds, private equity firms, asset managers, and pension funds. The sell-side includes firms that raise capital and facilitate transactions, including investment banks, brokerages, and advisory firms. In an M&A deal, the buy-side is the acquirer running due diligence, and the sell-side is the target preparing its data room.
What is the buy-side?
At its core, the buy-side is the group of firms that invest capital, either their own or capital raised from clients, with the goal of generating returns. Hedge funds, private equity firms, venture capital firms, pension funds, mutual funds, and other asset management firms all sit on the buy-side. Their day-to-day job is to evaluate investment opportunities, build financial models, and manage investment portfolios on behalf of institutional investors and other clients.
Buy-side firms make money differently from sell-side firms. Instead of commissions or advisory fees, they typically earn management fees and performance fees. A private equity fund, for example, might charge a 2% management fee plus 20% of profits above an agreed return, a structure often called “two and twenty” in the industry.
| Buy-side at a glance | |
| Who’s on it | Hedge funds, private equity firms, venture capital firms, pension funds, asset management firms |
| What they do | Invest capital, evaluate opportunities, manage portfolios |
| Revenue model | Management fees, performance fees, gains on invested capital |
Common buy-side roles
- Buy-side analyst. Researches companies and market trends to support investment decisions.
- Portfolio manager. Oversees a fund’s investment portfolio and makes the final call on buy and sell decisions.
- Private equity associate. Sources deals, supports due diligence, and helps manage portfolio companies after a deal closes.
- Hedge fund analyst. Tracks a specific sector or strategy to spot trading opportunities.
- Venture capital associate. Evaluates early-stage companies for possible investment.
What is the sell-side?
The sell-side is the group of firms that raise capital and facilitate transactions for their clients. Investment banks, brokerage firms, and advisory firms make up the sell-side. They help companies raise capital and raise debt, underwrite and market securities to investors, advise corporate clients on mergers and acquisitions, and publish sell-side research that guides how other market participants trade.
Sell-side firms earn money mostly through fees rather than investment gains. This includes underwriting fees when a company raises capital, trading commissions when clients buy or sell securities, and advisory fees for M&A work. Because sell-side firms serve many clients across the financial markets, their revenue tends to track deal volume and trading activity rather than the performance of any single investment.
| Sell-side at a glance | |
| Who’s on it | Investment banks, brokerage firms, advisory firms |
| What they do | Raise capital, market securities, advise on transactions, publish research |
| Revenue model | Underwriting fees, trading commissions, advisory fees |
Common sell-side roles
- Sell-side (equity research) analyst. Publishes research reports and stock recommendations that institutional investors and other clients rely on.
- Investment banking analyst or associate. Supports capital raising, equity capital markets deals, and M&A transactions.
- Sales and trading professional. Sells securities to institutional investors and executes trades.
- Sell-side advisor. Guides corporate clients through the sale or acquisition process, including preparing materials for buyers.
Key differences between buy-side and sell-side
Once you understand what is sell-side vs. buy-side individually, the differences are easier to spot.
Both sides work in the same financial markets and often on the same deal, but their goals, incentives, and day-to-day work look very different. At the root of buy-side vs. sell-side finance is one simple question: is this firm investing money, or is it helping someone else raise or move money?
Buy-side vs. sell-side liquidity is one useful way to think about it: sell-side firms, through their sales and trading desks, often provide liquidity by standing ready to buy or sell securities. Buy-side firms typically consume that liquidity when they build or exit a position.
| Buy-side | Sell-side | |
| Primary goal | Generate returns on invested capital | Raise capital or close transactions for clients |
| Typical firms | Hedge funds, private equity firms, asset managers, pension funds | Investment banks, brokerages, advisory firms |
| Revenue model | Management and performance fees, investment gains | Fees, commissions, spreads |
| In an M&A deal | Acquirer, conducts due diligence | Target, prepares the data room |
| Entry-level hiring | Fewer entry-level roles, often “graduate” from sell-side | More entry-level roles available |
| Skill emphasis | Analytical judgment, investment thesis-building | Client relationships, sales, and volume of output |
This split shows up across buy-side vs. sell-side investment banking conversations too. Investment banking itself sits on the sell-side, since bankers raise capital and advise clients rather than invest firm capital for returns. Even so, many investment bankers eventually move to the buy side once they have built enough deal experience, a career pattern covered later in this article.
Buy-side vs sell-side in an M&A deal
The buy-side vs. sell-side split is nowhere more visible than during an active M&A deal.
Sell-side vs. buy-side M&A differences become most visible once an actual deal starts. Global M&A activity has been picking back up: Bain & Company reports that 2025 global deal value rose 40%, to $4.9 trillion, the second-highest total on record. Whether a deal is worth $50 million or $5 billion, the basic roles stay the same: the sell-side prepares, and the buy-side reviews.
The sell-side’s job: Preparing the data room
In an M&A deal, the sell-side represents the company being sold. Before buyers get access, the sell-side’s advisors and internal team need to:
- Organize financials, legal documents, contracts, and intellectual property records for review.
- Structure folders and set permissions so each buyer only sees what they’re supposed to.
- Manage the Q&A process as buyers submit questions about the business.
A well-organized data room signals to buyers that the company runs a clean, well-documented business, which can strengthen your negotiating position.
Read more: Our data room checklist for investors walks through what a thorough due diligence file should include.
The buy-side’s job: Running due diligence
On the other side of the table, the buy-side (the acquirer) is granted access to the data room to evaluate the target company. This typically involves:
- Reviewing the data room systematically across financial, legal, commercial, HR, and IP categories.
- Tracking which documents have been reviewed and flagging risks for the deal team.
- Submitting questions through the data room’s Q&A module rather than side email threads.
Buy-side vs. sell-side due diligence responsibilities split cleanly this way: the acquirer’s team does the reviewing, while the target’s team does the answering.
Read more: For a closer look at how this process works in practice, see our guide to virtual data rooms for due diligence.
What each side needs from a virtual data room
The two sides of a deal use the same data room, but they need different things from it:
- Sell-side needs: fast setup, bulk upload, granular permissions, and a clear audit trail that shows a well-run process.
- Buy-side needs: strong search and filter tools, clear Q&A tracking, and engagement analytics that show what’s actually been reviewed.
Read more: Since these needs differ so much, the choice of provider matters. See how leading providers such as Datasite vs. Ideals compare for due diligence and deal management if you’re weighing options for an upcoming deal.
Where the line gets blurry
The buy-side and sell-side split is a useful model, but a few firms don’t fit neatly on one side.
Large banks often run both businesses under one roof: an investment banking division that advises corporate clients and sits squarely on the sell-side, alongside an asset or wealth management division that invests client capital and behaves like a buy-side firm. Goldman Sachs is a good example here.
Sell-side research is another gray area worth knowing about. Sell-side analysts publish research reports that both retail investors and buy-side firms read, which means the sell-side effectively supports the buy-side’s own decision-making. Market makers add a further wrinkle: they’re technically sell-side firms, but their core job is to provide liquidity to financial markets rather than raise capital or advise on deals.
None of this changes the basic buy-side vs. sell-side framework, but it explains why some firms and some individual roles are harder to label than others.
Career paths: buy-side vs sell-side
Buy-side vs. sell-side analyst roles are often where finance professionals begin to consider which path suits them better. Both sides can lead to strong careers, but the path in, and the day-to-day work, look different.
Moving from sell-side to buy-side
The most common career path in the investment banking industry is to start on the sell-side and later move to the buy-side. Sell-side firms, especially large investment banks, offer far more entry-level roles and structured training programs. After two to four years, many analysts and associates move to hedge funds, private equity firms, or other buy-side firms, where headcount is smaller, and hiring is more selective.
This pattern exists partly because buy-side firms value the technical training that sell-side programs provide. A few years of building financial models, supporting live deals, and working directly with institutional investors gives junior professionals the base skills that private equity and hedge fund employers look for.
Compensation differences
Pay structures differ more than pay levels, though the numbers do diverge once you compare entry-level roles on each side:
- On the sell-side, a first-year investment banking analyst at a bulge-bracket bank typically earns a base salary of around $110,000, with a bonus of 50% to 100% of that base. All-in, that usually lands between $170,000 and $225,000 in total compensation, according to Wall Street Oasis’s 2025 compensation benchmarking data and Mergers & Inquisitions’ 2026 investment banker salary report.
- On the buy-side, a first-year private equity associate typically earns a higher base salary, around $135,000 to $175,000, plus a bonus of 100% to 150% of base salary. That puts all-in total compensation in the $275,000 to $390,000 range at most firms, and Wall Street Oasis reports megafund associates averaging closer to $315,000 all-in. Carried interest, the buy-side’s biggest long-term upside, typically doesn’t start until the vice president level, so it rarely shows up in associate-level numbers.
These are entry-level snapshots, not guarantees. Pay varies by firm, fund size, city, and how strong the deal market is in a given year, so if you’re comparing a real offer, current, firm-specific data from a source like Glassdoor, Levels.fyi, or Wall Street Oasis will serve you better than any general industry figure.
| Sell-side (IB analyst, year 1) | Buy-side (PE associate, year 1) | |
| Base salary | ~$110,000 | ~135,000–175,000 |
| Bonus | 50%–100% of base | 100%–150% of base |
| All-in total comp | ~170,000–225,000 | ~275,000–390,000 (up to ~$315,000+ average at megafunds) |
| Biggest long-term upside | Promotion-driven base and bonus growth | Carried interest (typically starts at VP level) |
Note: Figures reflect entry-level, New York-based front-office roles as reported by Wall Street Oasis and Mergers & Inquisitions; actual pay varies by firm, fund size, location, and market conditions.
FAQ
Is it better to be buy-side or sell-side?
Neither side is objectively better. It depends on what you want out of your career. The buy-side tends to suit people who enjoy deep analytical work and building investment theses, but it offers fewer entry-level seats and more selective hiring. The sell-side offers more entry points and client-facing variety, but the work is often more sales-driven and dependent on deal volume.
Is BlackRock a buy-side or sell-side company?
BlackRock is a buy-side firm. It’s an asset manager that invests capital on behalf of clients rather than raising capital or advising on transactions for a fee. BlackRock reported roughly $14 trillion in assets under management at the end of 2025, making it the world’s largest asset manager and a clear example of a buy-side firm.
Is Goldman Sachs buy-side or sell-side?
Goldman Sachs is primarily a sell-side firm. Its investment banking division raises capital and advises corporate clients on M&A, exactly the kind of work that defines the sell-side. That said, Goldman also runs a large asset and wealth management division that invests on behalf of clients, which is a buy-side business. So the accurate answer is: mostly sell-side, with a meaningful buy-side arm.
Who earns more, buy-side or sell-side?
It depends on seniority and performance. At the junior level, sell-side pay (especially in investment banking) is often more predictable, since it leans on structured bonus pools tied to deal volume. At the senior level, buy-side professionals, particularly in private equity and hedge funds, can earn significantly more through performance fees and carried interest, but that upside depends heavily on fund performance.
On an M&A deal, which side manages the data room?
The sell-side, the target company and its advisors, typically owns and prepares the data room. The buy-side, the acquirer, is granted access to that data room to conduct due diligence.