Many hedge fund managers expect clarity will come in 2021 for a real recovery from the pandemic-induced downturn, and for how to safely return to their offices. In the meantime, they have major concerns about the impacts of remote working upon their staffs, possibly causing burnout for some of them.
These are some of the major findings of combined research conducted by accounting and professional services giant KPMG and the Alternative Investment Management Association (AIMA).
Released last month, their report, “Agile and Resilient: Alternative investments Embrace the New Reality,” is based upon a survey of 144 hedge fund managers globally, “representing an estimated US$840 billion in assets under management (AUM),” officials say.
The survey was conducted throughout the pandemic and the final report offers insights from key players across the industry.
Some of those insights are:
- 57 percent of hedge fund firms globally have hired or were looking to hire during the time of COVID-19;
- 81perent of respondents are investing in digital/IT capabilities;
- 61 percent say they acknowledge the flexibility gained by employees working remotely as a positive;
- 46 percent note the value to employees of commuting less;
- 71 percent of respondents report that they are successfully operating in a remote working environment, and that they are trending toward outsourcing more operational and technological solutions “to improve efficiency, generate cost savings and manage margins more effectively;”
- More than 80 percent of survey respondents “are investing in their digital infrastructure and IT capabilities. Half of all firms say they are investing in cyber security measures with one-in-three firms say they are building a central data warehouse to facilitate data analysis and reporting;”
- And 58 percent of hedge fund managers are optimizing their use of video conferencing systems and data rooms to bolster their investor relations model. “The flexibility and increased frequency of virtual meetings is benefiting both investors and managers and has levelled the playing field between investors and managers of all sizes.”
On the issue of returning to their offices, hedge fund managers “are taking a flexible and collaborative approach to developing their return to office plans, with the need to modify physical workspace (64 percent), train staff on new protocols for hygiene, sanitization, etc. (44 percent) and commuting concerns (42 percent) identified as key issues,” according to the survey results.
“While fund managers and executives are bullish about their ability to maintain their firm’s operations and performance in a decentralized environment, many are looking forward to an eventual return to the office,” according to the report.
“However, conversations with managers conducted since July suggest few believe this will be any time soon. Firms that once believed they would get back ‘as soon as possible’ now say they don’t expect a full return until ‘sometime in 2021.’ Some of the leaders we talked to seem resigned to the idea that they won’t get back to business-as-usual until the summer of 2021 at the earliest,” according to the report.
In a related issue, “survey respondents and interviewees are concerned about the impact this may have on staff morale and mental health,” according to the report.
“Remote working is wearing people out already and, with social distancing, you can’t even go out to blow off steam or take a vacation,” replied one manager. “Burn out is a very serious concern.”
For offices in the US Northeast and in London, U.K., respondents expressed concerns “about getting employees to and from the office safely,” and this concern is “having a massive impact on the timing for firms returning to work. Forty-two percent say they are thinking about employee commuting arrangements with one-in-three firms saying they are considering staggering the arrival and departure times of employees.”
“Ultimately, hedge funds will find the right balance of a more decentralized environment with the necessary face to face interaction in the office,” says Joseph Fisher, senior partner, asset management, KPMG International, in a prepared statement. “The ability to collaborate will unquestionably be a prime consideration as firms continue to adapt to the new reality,” Fisher says.
Access to the full report can be found here: https://bit.ly/3jIRinG