The Australian had an amusing take on the ongoing feud between sell-side (brokerage) professionals and buy-side (fund managers). For years, the sell-side enjoyed better salaries and bonuses and overall compensation. While the buy-side fund managers enjoyed long lunches, golf days and other leisurely junkets to lure their business.
The joke from brokers was, “What’s the difference between a fund manager and a shopping trolley? You can fill both with food and drink but the trolley has a mind of its own.”
Tables turned in recent years due to an explosion in the number of hedge funds and exotic buy-side institutions set up to manage the flood of money flowing into these funds. The only remaining satisfaction of the sell-siders was that their mistakes were often hidden from public view. While quarterly reports on fund managers’ performance were highly public for the world to see and snicker.
But with the hedge fund industry shrinking and the markets battered, we may see a return to dominance of the sell-side once again.