Buy-Side vs. Sell-Side in M&A: Roles, Differences, and Responsibilities

Mergers and acquisitions (M&A) activity in the Asia-Pacific (APAC) region demonstrated strong performance last year — the total disclosed value of deals conducted there reached $889.4 billion. This set a promising foundation for 2025, and indeed, the region already saw a 44% increase in deal value in Q1 compared to the previous year. 

With such a favorable background, let’s get back to the basics and look at two fundamental sides of any transaction: the buy-side and the sell-side. While both drive dealmaking, they involve different objectives, responsibilities, and challenges.

This article explains what the buy-side vs. sell-side in finance mean and outlines the key buy-side vs sell-side differences.

What is the sell-side?

The sell-side represents firms and professionals who create and distribute investment products to clients. These include investment banks, brokerage firms, and sell-side analysts. Their role is to help companies raise capital, sell securities, and reach investors in the financial market.

Sell-side professionals prepare research reports, financial models, and market insights to attract buyers and support investment banking deals. They also act as market makers, providing liquidity by buying and selling traded securities. 

In short, the sell-side connects corporate clients with institutional investors and ensures smooth access to capital markets.

What is the buy-side?

The buy-side consists of firms and investors who purchase securities and manage money on behalf of their clients or themselves. These include hedge funds, pension funds, mutual funds, private equity firms, venture capital funds, and asset managers.

Buy-side analysts and portfolio managers evaluate research, screen investment opportunities, and make decisions aimed at generating returns. 

Unlike the sell-side, their focus is not on distributing securities, but on investment decisions that grow portfolios. Buy-side professionals tend to rely on sell-side research analysts for insights, but ultimately conduct their own due diligence to guide strategy.

Key sell-side vs. buy-side differences 

Now, let’s take a look at where exactly the buy vs. sell side in finance differs.

So, the key difference between the two sides comes down to who they serve and what they aim to achieve. 

The sell-side works to help companies raise money and bring securities to the market, while the buy-side focuses on using that market to invest and generate returns. 

However, both sides depend on each other: without the sell-side, investors would lack access to securities, and without the buy-side, companies would struggle to find capital.

What do the sell-side and buy-side do during M&A transactions?

Now, let’s explore what the M&A buy-side vs. sell-side differences specifically are.

Sell-side

In M&A, the sell-side usually represents the company or shareholders looking to sell all or part of the business. Their role is to maximize value, create competitive tension, secure the best deal conditions, and ensure a smooth transaction. 

Key responsibilities include:

• Preparing the company for sale by organizing financial records, contracts, and compliance documents.
• Building marketing materials, such as the information memorandum and management presentations, to highlight strengths and future potential.
• Running the auction process, reaching out to potential buyers, and generating competitive bids.
• Managing due diligence by providing data, responding to questions, and coordinating with advisors.
• Negotiating deal terms to secure the best valuation and protections for their client.

Sell-side professionals are often investment bankers, legal advisors, and sell-side analysts who collaborate to position the company in the best possible way.

Buy-side 

On the buy-side, the focus is on finding the right target, valuing it correctly, and ensuring the investment creates long-term growth. 

Their main responsibilities include:

• Screening opportunities to identify businesses that fit their strategy or portfolio.
• Conducting valuation and financial modeling to estimate fair value and potential returns.
• Performing due diligence, reviewing financial, legal, and operational risks before committing capital.
• Structuring financing, often combining equity and debt to fund the acquisition.
• Negotiating final terms, including price adjustments, warranties, and post-deal integration plans.

Buy-side professionals may include private equity firms, institutional investors, hedge funds, or corporate development teams supported by investment bankers and legal advisors. Their goal is to secure an investment that aligns with strategy and delivers returns.

Buy-side vs. sell-side in investment banking

Let’s understand how buy-side firms and sell-side firms work in the investment banking sector.

Sell-side

Sell-side firms help companies access the capital they need. Investment bankers advise on and execute:

• IPOs. It includes guiding companies through the listing process, setting share prices, preparing regulatory filings, and promoting the offering to investors.
  
• Debt and equity issuance. It includes structuring bonds or new share placements, marketing them to institutional investors, and ensuring successful distribution in the financial industry.

Throughout these processes, sell-side analysts work on research and financial modeling to support pricing decisions and attract investor demand. In many cases, sell-side analysts collaborate with bankers to prepare materials and ensure that offerings are positioned well in the market.

Buy-side

On the other end, buy-side firms provide the capital that makes these offerings successful. 

Their role is to evaluate each deal and decide whether to invest.

• Mutual funds and pension funds purchase securities to deliver steady returns to their investors.
  
• Hedge funds often look for short-term opportunities in new listings or debt offerings.
  
• Private equity and buy-side companies may participate selectively, focusing on transactions that align with their investment strategy.

Here, buy-side research analysts review sell-side materials but also carry out independent due diligence. While sell-side firms bring securities to market, buy-side analysts tend to focus on long-term performance and risk before committing funds.

Additional read: Explore our dedicated article to learn more about investment banking in Singapore. 

Buy-side vs. sell-side due diligence

Due diligence is where both the sell- and buy-side are typically most often involved. While they both perform due diligence, especially financial due diligence, their approach and goals are different. Let’s see in what way.

Sell-side

For the sell-side, the goal is to prepare the company to appear robust and attractive to buyers. This means:

• Reviewing and organizing financial statements, contracts, compliance records, and other important documents
• Identifying and addressing weak spots before buyers discover them
• Creating consistent narratives in management presentations and data sets

This way, sell-side firms aim to minimize risks that could reduce valuation or stall the deal. 

Buy-side

For the buy-side, the objective is to spot flaws, risks, and inconsistencies that might change the price or even block the transaction. The main tasks of the buy-side specialists during due diligence are:

• Verifying the accuracy of financial statements
• Checking for hidden liabilities, legal disputes, or compliance issues
• Testing operational assumptions used in forecasts and financial models

Buy-side firms rely on this process to protect capital and make sure the investment aligns with long-term strategy.

Side-by-side view of the M&A process

Let’s now take a look at how the sell- and buy-side act during the three main stages of the M&A process.

Phase 1: Preparation and strategy

• Sell-side. The process begins with a readiness review. Sell-side teams organize financial and legal records, address compliance issues, and prepare marketing materials such as teasers and information memoranda. Their goal is to make the company attractive and ready for potential investors.
  
• Buy-side. At the same time, buy-side companies define their acquisition criteria. They create a target list based on industry fit, growth potential, and financial strength. This step ensures that resources are directed only toward deals that match their long-term goals.

Phase 2: Evaluation and negotiation

• Sell-side. Once buyers show interest, the sell-side prepares detailed models and presentations. This includes refined forecasts, valuations, and management insights that support the company’s asking price. Sell-side analysts work closely with bankers to shape messages and respond to buyer questions.
  
• Buy-side. On the other side, buy-side research analysts conduct deep-dive due diligence. They test assumptions, review risks, and run bespoke valuation models to confirm or challenge the seller’s numbers. Buy-side analysts tend to look beyond surface data, focusing on integration potential and hidden liabilities.

Phase 3: Deal closure and integration

• Both sides. The final stage involves executing the agreement. Legal structuring, regulatory filings, and financing must all align before closing. After signing, both sides may also take part in post-merger integration planning. For the sell-side, this ensures obligations are met. For the buy-side, it secures the value of the investment.

Buy-side vs. sell-side examples

Here are made-up examples of the sell- and buy-side to better understand each:

• Sell-side. A regional investment bank is hired to advise a manufacturing business planning to sell a division. The sell-side team prepares financial statements, builds a valuation model, and creates marketing materials to attract buyers. They run the auction process, contact potential investors, and negotiate on behalf of the seller to secure the highest price.
  
• Buy-side. A private equity firm is exploring growth opportunities in the healthcare sector. Its team identifies a promising target, reviews the information in the data room, and runs detailed financial models to estimate returns. The buy-side analysts tend to test the seller’s assumptions, highlight risks, and negotiate terms to make sure the deal fits their long-term strategy.

Why understanding the buy- vs. sell-side difference is important

That’s the basics of the finance sector. More reasons are the following:

• Better deal preparation. Companies planning an acquisition or sale can prepare more effectively when they know how buy-side firms and sell-side firms approach the process. This helps anticipate counterpart expectations and avoid missteps that can slow negotiations.
  
• Smarter use of advisors. Executives and investors who understand the roles of sell-side analysts and buy-side research analysts can use their expertise more effectively. It ensures that reports, valuations, and due diligence are applied in the right context.
  
• Clearer investment decisions. For investors, knowing the difference between the buy and sell sides improves decision-making. It highlights which insights are promotional (from the sell-side) versus which are evaluative and risk-focused (from the buy-side).
  
• Stronger market perspective. The financial industry runs on the interaction between both sides. Understanding their relationship provides a clearer view of how capital is raised, how securities are traded, and how long-term investment opportunities are assessed.

Final words

Both the sell- and buy-side are important parts of the M&A and investment banking. While both are aiming to get the best conditions for their clients or themselves, they approach that differently. 

The sell-side professionals’ goal is to make the company attractive for potential investors and ensure no roadblocks will be on their way during due diligence. The buy-side specialists, on the contrary, aim to ensure the client’s investment is worthy and potentially lucrative.

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