Market views: Will fund houses reopen offices as usual?
While the Covid-19 infection curve appears to be flattened in some countries, there is still a sizeable risk that the coronavirus will spread further is not to be underestimated. This appears especially likely when several nations’ attempts to develop an accessible vaccine have flopped, dashing hopes for a quick reopening of the global economy.
The head of the Monetary Authority of Singapore spoke at ACI Live Aid on May 29, urging the financial industry to guard against health risks in order to operate safely. He noted that office layouts and how transactions are carried out will need to change while the pandemic persists.
Indeed, the virus is still very much a threat to Singapore, which posted close to 37,000 cases as of June 5 as it begins to come out of a two-month circuit breaker period.
Moreover, Hong Kong, extended social distancing restrictions by another two weeks to June 18 after a cluster of infections was uncovered.
The crisis has disrupted investing activities for both asset owners and asset managers due to lockdowns around the world, and it sent global stocks plunging in March. So how are asset managers powering through the crisis? And when are they expecting to reopen their office?
Some organisations have already taken big decisions on this, such as PNB, Malaysia's state-linked fund manager, which has made working from home a permanent option for staff from now on.
We asked four senior industry executives how they had come to terms with the pandemic and what would be their next steps.
The following comments have been edited for clarity and brevity.
Kenneth Lim, chief operating officer for Asia ex-Japan (Singapore-based)
Nikko Asset Management
Operationally, teams needed to adjust to the work-from-home arrangement, and support plans needed to be adapted swiftly to maintain productivity, taking into account a host of considerations involving technology, process, and people.
Given our fiduciary duty as investment stewards, it is paramount that investment activities can continue to run with minimal disruption, especially when financial markets come under strain at the same time.
Prior to the lockdown, we were already running split-site operations and introduced team rotation to stress the bandwidth on our servers. We were also adapting to online virtual meetings, so the imminent lockdown accelerated the full adoption. We moved more processes that required paper review and wet signatures to digital with clear guidelines.
On the people front, early priority was given to staff with medical conditions and known vulnerabilities to telecommute. We also provided hardware support where feasible – for example, supplementary monitors to improve the work experience and mitigate the inefficiencies associated with technical work on small laptop monitors. Our leaders had to adapt their work style to maintain tighter communication with team members remotely and support collaboration.
According to medical experts, the vaccine will take one to two years to develop and become accessible. Hence, we expect that the majority of staff can only return to the office by 2022. But the reality is that telecommuting will become a key part of our manpower deployment strategy, with the supporting infrastructure and work practices. This is likely to prevail even after the pandemic situation is fully under control.
We have already implemented safe management measures at our premise to safeguard the interest of our staff and visitors, and will progress in-step with the relevant authorities for gradual resumption.
Steve Knabl, chief operation officer and managing partner (Singapore-based)
Swiss-Asia Financial Services
We have seen a considerable increase in trading volumes, and many of the funds that we operate on our platform are actually doing quite well considering the circumstances. This is the same for the wealth management side of our business. So in essence, volumes increasing means that it is still all hands on deck for the support teams.
We have also seen the normal seasonal uptake in new fund setups and launches early in the year – especially the Singapore variable capital company structure.
Our fund formation team is working hard to getting them together as well as adjusting documentation to align with the new Cayman Island regulations.
On the middle and back-office side, things are operating as normal but fully remotely. All our staff have been working from home since early March. This is possible, of course, due to our heavy investment in technology over the past few years. We are reaping the benefits of being tech-focused and striving to automate all our processes from front to back.
We plan fully reopen the office when the authorities allow us to do so, but this is not on the cards until the end of June. All managers have the capability to operate remotely, and this is one of the major strengths of our company.
Bruno Guilloton, chief executive for Asia Pacific (Hong Kong-based)
Axa Investment Managers
Thanks to the resilient framework of our operations team, we have maintained a high level of service, equivalent to that of pre-Covid, to our investors throughout the crisis. It is the same case with our investment platforms, which have remained fully operational, and we are pleased with the performance delivered in this challenging environment.
The interesting part is our interaction with clients, which has moved quite significantly and quickly into virtual. Onsite events have been put on hold or postponed to year end, and travel bans across the region have forced us to rethink our communication model.
We have arranged weekly client webcasts globally to update our investors on the market while sending regular investment updates more frequently. It will be more crucial than ever for asset managers to quickly adapt to technology disruption and evolve our ways of working.
Lastly, from an internal control perspective, guidelines of coming into the office and staying healthy have frequently been circulated among employees, while regular virtual conversations between managers and employees are encouraged. More importantly, working from home was made possible at Axa IM as early as in November 2017, and thanks to that, our staff have been able to work remotely and efficiently during the outbreak.
Our Hong Kong and Shanghai offices returned to normal in early May, and it was done gradually and flexibly to accommodate our staff’s situation and needs. Our Singapore office is still running under a work-from-home policy. We will continue to monitor the situation and make the necessary arrangements.
Patricia Druken, head of information technology (Singapore-based)
The lockdown measures meant that we had to swiftly evolve many typically face-to-face processes and plan for new dynamics. Working within the constraints of lockdowns and meeting bans, our sales team has quickly shifted from a slate of in-person events, such as in-person seminars and meetings, and focused on leveraging technology effectively to communicate and engage with clients.
In all our activities, the safety, health and well-being of all our colleagues is our top priority. In terms of reopening offices, we will adhere to, and strictly follow, the latest government guidance for each office and the measures we need to implement to ensure colleagues can safely return to the office.
Returning to work and the reopening of offices will not be like it was previously. We are anticipating a staggered return to work and introducing a range of measures, including different working hours to allow for various commuting times, strict guidance around social distancing, temperature checks, regular deep cleaning of offices and reminders on personal hygiene, especially around hand washing. We are also working on a reorientation programme to help colleagues adjust to the ‘new normal’ in the office and leveraging digital platforms to engage and communicate with colleagues.
In Singapore (our largest office), we are currently considering the best approach for a phased return once the government announces further easing of circuit-breaker restrictions. In Singapore, we currently have 98% of our employees working from home at any one time. Whereas in Hong Kong, in accordance with the government’s easing of restrictions, 13% of our employees are currently working from home.