What buy siders should know about sell-side equity research?

What value does equity research actually add?

Recently, I came across an equity investor on Twitter venting frustrations about sell-side equity research models. I'm not here to defend the sell-side—I know that can be a losing battle—but I think there’s an opportunity for both sides to benefit more from each other. The key is understanding each other’s motives.

Having worked on both the buy-side and sell-side, I’ve seen firsthand how each group operates. I can safely say that most buy-siders probably don’t understand—and don’t care about—the day-to-day grind of sell-side analysts. The reverse is likely also true. We all tend to focus on our own little world. (Want to guess how many times people at tech parties ask me, “So, are you a day trader?” when I mention I used to work at a hedge fund?)

That’s why I want to explore why equity investors often fail to find sell-side equity research (which I’ll refer to simply as "equity research" throughout) useful for investment purposes.