Coronavirus: Five Survival Protocols for Investment Fund Managers

Coronavirus market meltdown: the Bulls and the Bears wearing clinical facemasks
  1. Embrace the opportunity. Consider how your investors’ daily lives and routines have changed during the pandemic, and embrace the opportunity that this presents. You have a captive audience, sitting at home in front of their screens. So, whilst you might be underwhelmed in other areas of your business, formulating and communicating to your investors a key message is essential. Leverage online communication and content distribution channels like LinkedIn and Twitter to convey your message and, importantly, regular updates and commentary as the lockdown continues. Remember, there is a lot of panic and fake news circulating the web, and your second biggest priority- after protecting your fund’s assets- is to keep your investors in the loop and duly provided with high quality information around portfolio performance, portfolio positioning and significant strategy adjustments.
  2. Adopt the digital tools at your disposal. While CRM has likely never been your primary focus as a portfolio manager, this is the time to find out what your front-of-house colleagues know about it. Your firm’s CRM platform will likely have the ability to provide updates and data via email to investors, and your first task will be to take a view on whether this capability needs to be enhanced to meet the special challenges that the pandemic presents. Again, put yourself in your investors’ shoes. Their inboxes are going to be fuller than usual of emails competing for their attention, and it is also important to ensure that the data flow emanating from your firm reaches all investors, big or small, equally. A virtual dealroom (like Intralinks) can be used to centralise all crisis-related communications. Consider also whether your CRM interface can be used to handle virtual due diligence requests and other remote communications that will be incoming from investors during the lockdown.
  3. Don’t be proprietary, be generous. We have seen many companies taking down their paywalls in response to the crisis, and this technologically-easy action will generate a huge amount of client goodwill. You should review your firm’s proprietary analytical resources and consider making them accessible to your investors. They will be grateful to you for having provided them with a useful dashboard or other online tool.
  4. Ramp up your virtual meeting capabilities. Again, be sensitive to how your investors’ daily routine has changed, through lockdowns and incapacity through illness of key personnel, friends or family. Those weekly or monthly investor calls that you scheduled may no longer be convenient or possible. And, as the manager, you may well now be feeling the need to reformulate both the timing and the medium through which you give your investor updates. Now is the time to reevaluate your firm’s use of videoconferencing and webinars, both with a “record” function so that content can later be made available to investors on your CRM platform or online dashboard. Zoom, UberConference and Google Hangout are all seeing a big rise in uptake by individuals and corporates and by making use of them, you are sharing technologies with which your investors are likely newly familiar as they find ways of communicating remotely with friends and family.
  5. Establish a Crisis Comms team. Again, as a portfolio manager or key person in an investment management firm, your primary focus will likely not be on investor communications. But the coordination and dissemination of information and messages to your investors is all-important during the crisis, and you will need a dedicated team to handle this. This communications team can be drawn from suitable personnel from front, middle and back offices, and should report at least once a week to the firm’s COO or executive committee. The team’s central task will be to implement steps one through four that we have just described, starting with a review of the capabilities of your firm’s CRM platform, with a view to increasing the frequency and moderating the content of performance updates, risk reports and commentaries, and utilising suitable distribution channels to provide this information to investors. In addition to communicating with investors, this team should also interface with the fund’s service providers (prime broker and administrator being chief among them) and, when market or competitor news requires, the financial media, and be capable of relaying relevant intelligence back to investors.
Matthew Feargrieve hedge funds lawyer joins law firm Appleby Global in Zurich
Matthew Feargrieve

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Matthew Feargrieve

Matthew Feargrieve

Matthew Feargrieve is an investment management consultant with more than twenty years experience of advising fund managers.