The COVID Diaries: international investor 1

The following interview is with a UK-based fixed-income investor. It was conducted on 25 March 2020.

Are you working from home? If so, how challenging has the change been and, if not, how likely do you think it is that you will be WFH in the coming weeks?

Yes, I’m working from home, although it is deliberate rather than extraordinary. We are a new and disruptive asset manager and one of the first financial services firms to adopt a fully distributed model. The choice of approach is unrelated to recent developments and started two years ago when we realised technological advancements provided an opportunity by making many legacy organisational structures obsolete.

Before obtaining our regulatory authorisation in early March, we spent six months with our IT partner on setting up a cloud-based infrastructure. We also spent more than a year working on the principles to govern virtual interaction and conduct to closely resemble an in-person professional experience and facilitate people’s personal needs.

More firms will transition to a distributed model over the coming years – not because of COVID-19, but because it is a structural shift that has been in the making for some time. It offers many additional benefits, too – enhanced security features, balanced work and life commitments, and ability to attract the best talent globally, irrespective of the size of the firm.

How close do you think the market will get to business as usual if we are in a period of social distancing for multiple months, including working from home and little or no face-to-face interaction?

If business as usual means valuations and risk expectations to resemble those we saw at the end of 2019, not very soon. Business as usual will also be redefined. Though it is encouraging to see an unprecedented combination of fiscal and monetary stimuli across countries, the social distancing and isolation policies, which are necessary, are already taking a toll on businesses and people’s lives. Capital structures are yet to reflect this.

Besides financial outcomes, social distancing will put the resilience of corporate cultures to the test. Performance will not be solely a function of one’s IT capabilities. It will come down to how well employees interact with one another and the quality of management. Clear communication, shared vision, and the culture of meritocracy and mutual respect supported by a strong leadership will separate winners from losers, in financial and corporate sectors alike.

"This crisis has exposed the vulnerabilities of our societies, more specifically the impermanence of the model in which social standing is exclusively consumer driven. I am closely watching what is happening in the US and in the markets. Most of all, I’m watching the combination of the monetary and government responses."

What other changes are you making in your personal and professional life?

School closure is a major factor. All models, distributed or traditional, will be challenged by having to accommodate for children being at home. Professionals across all industries are not best at balancing full-time schooling with facilitating extracurricular activities and play – it is time for improvisation.

Establishing a routine helps. If kids follow items on the scheduling board and cross them out upon completion, it helps reduce disruptive tantrums. The silver lining is that parents are best placed to cater to children’s mental health during these challenging times. Besides, a shared routine finally gives children a chance to see first-hand what that mysterious workplace that keeps their parents away from home five days a week is all about.

What are you most worried about in this period, personally or professionally – and how worried are you in general?

This crisis has exposed the vulnerabilities of our societies, more specifically the impermanence of the model in which social standing is exclusively consumer driven. I am closely watching what is happening in the US and in the markets. Most of all, I’m watching the combination of the monetary and government responses.

Prices and daily fluctuations across assets offer a lot of information and tell us much about the future. I am most concerned, personally and professionally, about the strength of individual communities – their resilience and ability to stick with a globally synchronised response to contain and combat the spread of the pandemic.

What is the latest article you have read in relation to COVID-19 and what did you like/not like about it? Can you provide a link?

I follow the work of Peter Diamandis closely. He is the founder of XPRIZE Foundation, an MD with additional degrees in molecular genetics and aerospace engineering. He is usually well researched and unbiased.

He recently wrote on the topic of augmenting one’s immunity. The article offers useful tips and an update on the efforts to find a vaccine. It also introduces the notion of antiviral therapies.

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