Definition of 'buy side' in Finance

The phrase 'buy-side' refers to companies that are in the business of buying others, rather than selling them. Investment banks are not usually part of this; although they may advise on the purchase of companies, they do not invest their own capital.

The buy-side is made up of private equity firms, hedge funds, mutual funds, pension funds, proprietary-trading firms etc. When a television program or article refers to "investors", they usually mean buy-side firms.

Example, A private equity firm decide to buy a profitable company for a chance to make money from it. The purchase these companies for others, acquisition encourages competitive edge and it provides the possibility of adding values.