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Silver linings have been few and far between of late but, for some, the global migration to working from home might qualify as one. Commuters, for instance, have saved the cost of their annual rail ticket1 – meanwhile, worldwide levels of pollution plummeted during the worst of the lockdowns2. Yet, for many, the established norms of actually meeting people face-to-face retain their allure.
The bad news is that, despite the promise offered by the rollout of new vaccines, a speedy return to the office seems unlikely for most – at least in the short-term.
For asset-management professionals, particularly those with stock-picking and client responsibilities, the year of adapting to our new normal will continue to rest on two key foundations. First, potential clients still want to know if managers can deliver consistent investment performance. Second, the way they ascertain this has changed.
In what we might freely call the ‘old days’, much of the due diligence process performed by clients seeking to appoint a portfolio manager was already being completed remotely. But with the advent of Zoom, Webex et al., it is the face-to-face meeting – that final step of the process – that has seen the most significant change. Today, the video conference is king.
For Murdo Maclean, client investment manager at Walter Scott and Partners, the move to an online world cuts both ways. “This form of communication is not perfect, by any stretch,” he says, “but managers and clients can’t hang around forever, and decisions need to be made. Importantly, I don’t believe the current environment has caused significant delays with the appointment process.”
However, the desire to achieve results using the technology at hand cannot mask the fact that, as human beings, we have a desire to meet, be social, and share information: “Clients will eventually want to see their managers – it’s that final step of trust,” he adds.
This experience is being mirrored at the company research level. Surely this is where the impact of social distancing will be keenly felt? “Not necessarily,” says Maclean, “Exposure to senior executives is now easier because there’s no reason for them to be away on company business and, therefore, unavailable.” This is further demonstrated by anecdotal evidence of managers talking to individuals they had previously been unable to meet. This level of access, he says, is allowing managers to gather some useful productspecific information.
Another novel development that’s proving its worth is the virtual tour. Plants or manufacturing facilities that may have been omitted from a packed itinerary can now be explored and assessed. “Managers can potentially build a better picture of a firm’s fixed assets, which, in turn, helps to match the rhetoric with reality,” observes Maclean.
That said, he is clearly aware of the elephant in the meeting room: “Virtual gatherings mask all types of body language and – let’s face it – most people look somewhat uncomfortable in video-conference mode, so it’s harder to judge whether there are underlying issues with a business or the person you are talking to just dislikes being in front of a camera.”
Aside from the pandemic’s impact on the structure of formal meetings, Maclean also points out the effect it has on conferences and events. “These cannot be replicated remotely, so there’s an obvious gap where networking used to sit, which is an unfortunate downside of recent events.”
Ultimately, he believes that the new normal will be reacquainted with the old norm, and actual meetings will resume. But what emerges, for both manager selection and company visits, will be something of a hybrid. The aspects of the Covid interregnum that make our lives better will be retained, and the nuisance elements quickly jettisoned.
1 Bloomberg.com: ‘Working From Home Saved American Commuters Nearly $91 Billion’, 27 Aug 2020.
2 Sciencedirect.com: ‘COVID-19 pandemic and environmental pollution: A blessing in disguise?’, 1 Aug 2020.
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