Hedge fund industry split over return to work and client meetings, as lockdown measures ease

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Most hedge fund industry employees have been working remotely during the coronavirus pandemic, but now firms are split over when staff should return to work and when businesses can resume face-to-face contact with investors and other clients, a new study by the Alternative Investment Management Association has found.

The survey data suggests firms with smaller headcounts are more confident on resuming client contact and overseas travel later this year.

But firms with larger staff numbers do not expect to return to normal until 2021, suggesting they face bigger practical challenges in ensuring social distancing among employees. 

AIMA, the trade body for the globally hedge fund industry, recently surveyed 240 members – two-thirds of which were hedge fund management firms, with the remaining third comprising service providers and investors - altogether representing more than 67,000 employees.

The survey found that some 92 per cent of hedge fund industry employees have been working either entirely (67 per cent) or mostly (25 per cent) from home throughout the Covid-19 lockdown.

As countries begin to ease lockdown measures, AIMA’s study has found that the hedge fund industry is divided over how to proceed back to work.

Roughly 30 per cent are keen to continue working remotely until most other businesses have returned to the office, while 32 per cent favour a return to the office as part of a follow-up wave. More than a fifth (21 per cent) would prefer to continue to work from home until the Covid-19 threat has passed, though just 17 per cent want to be one of the first firms to return to work.

When it comes to resuming face-to-face contact with investors and other clients, AIMA’s study also found sharply different perspectives among firms according to their size.

In an industry known for its private nature, success has often hinged on hedge fund managers’ ability to foster close relationships with clients through discrete networking and one-to-one meetings.

But while smaller firms are more confident of resuming in-person meetings this year, larger companies reckon visits to and from clients are unlikely to begin until 2021.  

Half of all firms surveyed who employ between 11 and 50 people expect to start receiving visitors from Q4 later this year onwards. Larger firms who employ more than 50 people are less optimistic: half of these managers do not expect to receive any visitors until Q1 2021 or after.

Similarly, roughly half of firms across each of the 11-50, 51-250, 251-1,000 and 1,000+ employee brackets do not expect to visit investors or clients until Q1 2021 or later. In contrast, 44 per cent of smaller firms employing between 1 and 10 people expect to be able to visit clients in Q4 this year, with 32 per cent saying it will be Q1 2021 at the earliest.

Among investment managers, 73 per cent do not expect to conduct any overseas travel this year. Out of all firms polled, smaller managers are again more optimistic on overseas travel: 54 per cent of firms with between 1-10 employees say they expect overseas travel this year. In contrast, 72 per cent of firms in the 11-50 staff bracket do not expect any overseas travel, with this number rising to 87 per cent among firms sized at 51-250 employees.

As a result, 58 per cent of hedge fund managers quizzed expect to adopt more liberal work-from-home policies in future, with a further 34 per cent considering it a ‘maybe’. Just 9 per cent are ruling out more flexible home-working.

As the Covid-19 lockdown measures are eased, the top three concerns among respondents are crowded public transport, followed by a second wave of Covid-19, and “overly restrictive” measures imposed by government and local authorities.