Investment Banking

Investment Banking

Investment Banking

Investment Banking

What are Push Notifications? Push Notifications explained

In today's digital age, people are constantly connected to their smartphones and other mobile devices. Push notifications are a popular way for apps and websites to communicate with their users. But what exactly are push notifications, and how do they work? In this article, we'll explore push notifications in detail, from their definition and purpose to their benefits, setting them up, and best practices for using them effectively.

Understanding Push Notifications

Definition and Purpose

Push notifications are messages that pop up on users' mobile devices or web browsers, even when the app or website is not currently in use. They provide a way for apps and websites to communicate with their users in real-time, offering updates, reminders, or other relevant information. The purpose of push notifications is to engage users and keep them coming back to the app or website.

Push notifications have become an essential tool for businesses and organizations to reach their target audience. With the increasing use of mobile devices and the internet, push notifications have become a convenient and effective way to keep users informed and engaged.

How Push Notifications Work

Push notifications work by utilizing a service worker, a script that runs in the background of a website or app even when it is closed. When a push notification is sent, it is received by the service worker, which then displays the notification on the user's device. The notification can contain text, images, and even sounds or vibrations, depending on the device's settings.

Service workers are designed to be lightweight and efficient, allowing them to run in the background without consuming too much battery or data. They are also designed to be secure, ensuring that only authorized notifications are displayed to users.

Types of Push Notifications

There are several types of push notifications that apps and websites can send:

  • Transactional notifications: These are notifications sent after the user has performed an action, such as making a purchase or signing up for a newsletter. Transactional notifications are often used to confirm a user's action or to provide additional information related to the action.

  • Promotional notifications: These notifications are meant to promote a product or service, such as a sale or discount. Promotional notifications can be effective in driving sales and increasing customer engagement.

  • Content notifications: This type of notification informs users of new content available on the app or website, such as a new article or video. Content notifications are often used to keep users engaged and coming back to the app or website.

In addition to these types of push notifications, there are also personalized notifications that are tailored to individual users based on their behavior or preferences. Personalized notifications can be more effective in engaging users and driving conversions.

Overall, push notifications are a powerful tool for businesses and organizations to communicate with their users and keep them engaged. By utilizing the right types of push notifications and personalization strategies, businesses can increase customer engagement, drive sales, and build brand loyalty.

Benefits of Using Push Notifications

Push notifications have become an increasingly popular way for businesses to communicate with their users. They offer a variety of benefits that can help businesses increase engagement, improve customer retention, and communicate in real-time. In this article, we'll explore some of the key benefits of using push notifications.

Increased User Engagement

One of the primary benefits of push notifications is that they increase user engagement with an app or website. By sending regular updates and reminders, users are more likely to return to the app or website, increasing their time spent and potential for conversions.

For example, if a user has a shopping app installed on their phone, they may receive push notifications about new products, sales, or promotions. These notifications can encourage the user to open the app and browse the products, potentially leading to a purchase.

Improved Customer Retention

Push notifications can also improve customer retention, as they provide a way to stay top-of-mind with users. By keeping users engaged with regular updates and promotions, businesses can reduce churn and retain more customers over time.

For example, a restaurant app may send push notifications to users about new menu items, upcoming events, or special promotions. By keeping users engaged and informed, the app can encourage users to continue using the app and visiting the restaurant.

Real-time Communication

Push notifications also offer a way for businesses to communicate with their users in real-time. This is particularly useful for time-sensitive information, such as breaking news or limited-time promotions.

For example, a news app may send push notifications to users about breaking news stories as they happen. This can help users stay informed and up-to-date on the latest news, even if they're not actively using the app at the time.

In conclusion, push notifications offer a variety of benefits for businesses looking to engage with their users, improve customer retention, and communicate in real-time. By leveraging push notifications effectively, businesses can increase engagement, drive conversions, and build stronger relationships with their users.

Setting Up Push Notifications

Push notifications are a powerful tool for businesses to communicate with their customers and keep them engaged with their app or website. By sending timely and relevant messages directly to a user's device, businesses can increase user retention and drive conversions. However, setting up push notifications can be a complex process that requires careful planning and execution.

Choosing a Push Notification Service

Before setting up push notifications, businesses must choose a push notification service provider. This decision can have a significant impact on the effectiveness and cost of push notifications. There are several providers on the market, each with their own features, pricing, and integration options. Some popular options include OneSignal, Pusher, and Firebase Cloud Messaging.

When choosing a push notification service, businesses should consider factors such as the provider's reliability, scalability, and ease of use. They should also evaluate the provider's pricing model to ensure it aligns with their budget and usage needs. Finally, businesses should look for a provider that offers robust analytics and reporting capabilities to help them measure the success of their push notification campaigns.

Integrating Push Notifications into Your App

Once a push notification service has been chosen, businesses must integrate it into their app or website. This typically involves adding the service worker script and configuring the notification settings. The service worker script is a JavaScript file that runs in the background of the user's device and handles push notifications. It is responsible for displaying notifications, handling user interactions, and updating the app's user interface.

Integrating push notifications into an app or website can be a complex process that requires technical expertise. Businesses may need to work with a developer or third-party service provider to ensure that the integration is done correctly and efficiently.

Creating Effective Push Notification Content

Finally, businesses must create effective push notification content that encourages users to engage with the notification. This includes crafting attention-grabbing headlines, personalized messaging, and clear calls to action. Push notifications should be timely, relevant, and valuable to the user to increase the likelihood of engagement.

Businesses should also consider segmenting their push notification audience based on user behavior, preferences, and demographics. This allows them to send more targeted and personalized messages that are more likely to resonate with the user.

In conclusion, setting up push notifications can be a complex process, but it is a worthwhile investment for businesses that want to increase user engagement and drive conversions. By choosing the right push notification service provider, integrating push notifications correctly, and creating effective push notification content, businesses can unlock the full potential of this powerful communication tool.

Best Practices for Push Notifications

Push notifications have become an essential tool for businesses to engage with their customers. With the right timing, messaging, and personalization, push notifications can drive user engagement and retention. Here are some best practices for creating effective push notifications:

Timing and Frequency

The timing and frequency of push notifications are critical for their effectiveness. Businesses should avoid sending notifications too early or too late in the day, as this can be disruptive to users. It's also important to ensure that notifications are not too frequent, which can lead to user burnout and cause them to opt-out of receiving notifications altogether. Finding the right balance between timing and frequency is key to creating effective push notifications.

For example, a clothing retailer may want to send a push notification to customers in the morning, reminding them of a sale that is happening that day. This notification should be sent early enough for customers to take advantage of the sale, but not so early that it disrupts their morning routine.

Personalization and Segmentation

Personalized push notifications are more effective than generic notifications. Businesses can personalize notifications by using the user's name, location, and past behavior to tailor the messaging to their interests and needs. For example, a food delivery app may send a push notification to a user in a specific location, offering a discount on their next order.

Segmentation, or dividing users into specific groups based on their behavior or demographics, can also lead to more effective notifications. For example, a travel app may segment users based on their past bookings and send push notifications about deals on destinations they have previously traveled to.

A/B Testing and Optimization

Finally, businesses should A/B test their push notifications to determine what messaging and timing works best for their users. By continually optimizing their push notifications, businesses can improve engagement and retention over time. For example, a fitness app may test different messaging for push notifications about workout reminders, to see which message resonates best with users.

Overall, push notifications can be a powerful tool for businesses to engage with their customers. By following these best practices, businesses can create effective push notifications that drive user engagement and retention.

Conclusion

Push notifications are a powerful tool for engaging users and improving customer retention. By choosing the right push notification service, integrating it into their app or website, and following best practices for timing, personalization, and optimization, businesses can harness the power of push notifications to drive growth and success.

Exploratory Topics
Frequently asked questions

What distinguishes buy-side from sell-side activities?

The buy side encompasses institutions and professionals—such as mutual funds, hedge funds, private equity firms, pension funds and insurance companies—that allocate capital by acquiring securities and assets to meet return objectives for their clients or beneficiaries. Buy-side teams perform rigorous research, due diligence and portfolio construction with a focus on long-term value creation and risk management. Their sizable allocations can influence market dynamics, and they continually adapt strategies to evolving economic conditions and investor needs.

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

Which types of institutions operate on the buy side?

Common buy-side institutions include:

  • Mutual funds and ETFs: Pooled vehicles investing across equity, fixed income or alternative strategies.

  • Hedge funds: Employ varied strategies (long/short, event-driven, quantitative) to deliver absolute or relative returns.

  • Private equity and venture capital firms: Invest directly in private companies or take public companies private, focusing on value creation over multi-year horizons.

  • Pension funds and insurance companies: Allocate capital for long-term liabilities, balancing growth and stability.

  • Sovereign wealth funds and endowments: Manage public or non-profit assets with intergenerational or mission-driven objectives.

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

What is the typical investment process on the buy side?

The buy-side investment process often follows these steps:

  1. Idea Generation: Sourcing opportunities via proprietary research, screeners, industry contacts or sell-side research.

  2. Due Diligence: Deep fundamental, quantitative and qualitative analysis, including financial modeling, industry assessment and management evaluation.

  3. Investment Thesis & Approval: Articulate how the position aligns with return targets, risk constraints and portfolio fit; obtain internal approval.

  4. Execution: Enter positions in appropriate size and timing, considering liquidity and market impact.

  5. Monitoring & Risk Management: Track performance drivers, market developments and portfolio exposures; adjust positions or hedges as needed.

  6. Exit or Rebalance: Realize gains or cut losses according to predefined criteria or evolving outlook, ensuring alignment with overall portfolio objectives.

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

How do buy-side professionals manage risk?

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

What skills and capabilities are essential for buy-side roles?

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

What distinguishes buy-side from sell-side activities?

The buy side encompasses institutions and professionals—such as mutual funds, hedge funds, private equity firms, pension funds and insurance companies—that allocate capital by acquiring securities and assets to meet return objectives for their clients or beneficiaries. Buy-side teams perform rigorous research, due diligence and portfolio construction with a focus on long-term value creation and risk management. Their sizable allocations can influence market dynamics, and they continually adapt strategies to evolving economic conditions and investor needs.

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

Which types of institutions operate on the buy side?

Common buy-side institutions include:

  • Mutual funds and ETFs: Pooled vehicles investing across equity, fixed income or alternative strategies.

  • Hedge funds: Employ varied strategies (long/short, event-driven, quantitative) to deliver absolute or relative returns.

  • Private equity and venture capital firms: Invest directly in private companies or take public companies private, focusing on value creation over multi-year horizons.

  • Pension funds and insurance companies: Allocate capital for long-term liabilities, balancing growth and stability.

  • Sovereign wealth funds and endowments: Manage public or non-profit assets with intergenerational or mission-driven objectives.

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

What is the typical investment process on the buy side?

The buy-side investment process often follows these steps:

  1. Idea Generation: Sourcing opportunities via proprietary research, screeners, industry contacts or sell-side research.

  2. Due Diligence: Deep fundamental, quantitative and qualitative analysis, including financial modeling, industry assessment and management evaluation.

  3. Investment Thesis & Approval: Articulate how the position aligns with return targets, risk constraints and portfolio fit; obtain internal approval.

  4. Execution: Enter positions in appropriate size and timing, considering liquidity and market impact.

  5. Monitoring & Risk Management: Track performance drivers, market developments and portfolio exposures; adjust positions or hedges as needed.

  6. Exit or Rebalance: Realize gains or cut losses according to predefined criteria or evolving outlook, ensuring alignment with overall portfolio objectives.

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

How do buy-side professionals manage risk?

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

What skills and capabilities are essential for buy-side roles?

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

What distinguishes buy-side from sell-side activities?

The buy side encompasses institutions and professionals—such as mutual funds, hedge funds, private equity firms, pension funds and insurance companies—that allocate capital by acquiring securities and assets to meet return objectives for their clients or beneficiaries. Buy-side teams perform rigorous research, due diligence and portfolio construction with a focus on long-term value creation and risk management. Their sizable allocations can influence market dynamics, and they continually adapt strategies to evolving economic conditions and investor needs.

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

Which types of institutions operate on the buy side?

Common buy-side institutions include:

  • Mutual funds and ETFs: Pooled vehicles investing across equity, fixed income or alternative strategies.

  • Hedge funds: Employ varied strategies (long/short, event-driven, quantitative) to deliver absolute or relative returns.

  • Private equity and venture capital firms: Invest directly in private companies or take public companies private, focusing on value creation over multi-year horizons.

  • Pension funds and insurance companies: Allocate capital for long-term liabilities, balancing growth and stability.

  • Sovereign wealth funds and endowments: Manage public or non-profit assets with intergenerational or mission-driven objectives.

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

What is the typical investment process on the buy side?

The buy-side investment process often follows these steps:

  1. Idea Generation: Sourcing opportunities via proprietary research, screeners, industry contacts or sell-side research.

  2. Due Diligence: Deep fundamental, quantitative and qualitative analysis, including financial modeling, industry assessment and management evaluation.

  3. Investment Thesis & Approval: Articulate how the position aligns with return targets, risk constraints and portfolio fit; obtain internal approval.

  4. Execution: Enter positions in appropriate size and timing, considering liquidity and market impact.

  5. Monitoring & Risk Management: Track performance drivers, market developments and portfolio exposures; adjust positions or hedges as needed.

  6. Exit or Rebalance: Realize gains or cut losses according to predefined criteria or evolving outlook, ensuring alignment with overall portfolio objectives.

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

How do buy-side professionals manage risk?

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

What skills and capabilities are essential for buy-side roles?

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

What distinguishes buy-side from sell-side activities?

The buy side encompasses institutions and professionals—such as mutual funds, hedge funds, private equity firms, pension funds and insurance companies—that allocate capital by acquiring securities and assets to meet return objectives for their clients or beneficiaries. Buy-side teams perform rigorous research, due diligence and portfolio construction with a focus on long-term value creation and risk management. Their sizable allocations can influence market dynamics, and they continually adapt strategies to evolving economic conditions and investor needs.

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

Which types of institutions operate on the buy side?

Common buy-side institutions include:

  • Mutual funds and ETFs: Pooled vehicles investing across equity, fixed income or alternative strategies.

  • Hedge funds: Employ varied strategies (long/short, event-driven, quantitative) to deliver absolute or relative returns.

  • Private equity and venture capital firms: Invest directly in private companies or take public companies private, focusing on value creation over multi-year horizons.

  • Pension funds and insurance companies: Allocate capital for long-term liabilities, balancing growth and stability.

  • Sovereign wealth funds and endowments: Manage public or non-profit assets with intergenerational or mission-driven objectives.

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

What is the typical investment process on the buy side?

The buy-side investment process often follows these steps:

  1. Idea Generation: Sourcing opportunities via proprietary research, screeners, industry contacts or sell-side research.

  2. Due Diligence: Deep fundamental, quantitative and qualitative analysis, including financial modeling, industry assessment and management evaluation.

  3. Investment Thesis & Approval: Articulate how the position aligns with return targets, risk constraints and portfolio fit; obtain internal approval.

  4. Execution: Enter positions in appropriate size and timing, considering liquidity and market impact.

  5. Monitoring & Risk Management: Track performance drivers, market developments and portfolio exposures; adjust positions or hedges as needed.

  6. Exit or Rebalance: Realize gains or cut losses according to predefined criteria or evolving outlook, ensuring alignment with overall portfolio objectives.

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

How do buy-side professionals manage risk?

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

What skills and capabilities are essential for buy-side roles?

Risk management on the buy side involves:

  • Diversification and Position Sizing: Limiting concentration by calibrating exposure across sectors, geographies and asset classes.

  • Stress Testing and Scenario Analysis: Evaluating portfolio performance under adverse market conditions or specific events.

  • Hedging Strategies: Using derivatives or offsetting positions to mitigate unwanted exposures (e.g., currency, interest-rate or equity market risk).

  • Continuous Monitoring: Implementing risk dashboards and regular reviews to identify emerging threats and ensure compliance with mandates and regulatory requirements.

  • Governance Frameworks: Clear escalation protocols and oversight committees to approve significant deviations or high-conviction bets.

Strong financial modeling and valuation ability; critical research and data-synthesis skills; clear, concise communication of theses; disciplined decision-making under uncertainty; familiarity with risk frameworks and compliance; and an ethical, client-focused mindset.

Explore More Investment Banking

Explore More Investment Banking

2025 © rareliquid. All Rights Reserved.

2025 © rareliquid. All Rights Reserved.

2025 © rareliquid. All Rights Reserved.

2025 © rareliquid. All Rights Reserved.