28 May 2020
Whilst the title of this article may be a little tongue-in-cheek, there have been some genuine conversations within the RSMR team about how the future of fund manager research may change as a result of the current social and business restrictions and how the duration of lockdown could lead to permanent changes.
At RSMR, one of the key factors within our qualitative research process is to identify what the main drivers of a fund’s performance have been and what they are likely to be in the future, including the fund manager/fund management team and the resources at their disposal. An essential part of this process is to meet the fund managers/management team, seeing the ‘whites of their eyes’, as they explain what they do, how they do it and the surrounding support structures. Current social and business restrictions have meant that face to face meetings have stopped, but what does this mean for the RSMR process?
Group calls and video conferencing facilities have always been available to us and have been particularly useful when researching funds where managers are based overseas. Recent weeks have certainly enhanced the reputation of video conferencing (shares of Zoom and Microsoft Teams have been very popular), in both a social and business context, and it is highly likely that the RSMR team will use this functionality more and more within our research process.
In what circumstances is it best used? Could you rate/invest in a fund without physically meeting the fund manager/fund management team, particularly when they are UK-based? With anecdotal evidence that some fund management groups are keeping their offices closed until September, these are very poignant questions.
My personal view is that video conferencing and group calls are most useful when you already know the fund well and are looking for a relatively quick update on the team, process, performance and positioning, including specific questions about more recent events and views on the economic and market outlook, but there is more uncertainty when considering a fund for the first time. Ideally, you would meet the fund manager, wider team and other key people at least once, as face to face contact can often provide little nuggets of information that are very difficult to obtain otherwise; judging a manager’s character and how they react to certain questions. As meetings in person are not currently possible and may not be for some time, perhaps a little more flexibility is required.
Over the past few weeks, the scope and frequency of information available to organisations like ours has been evident, with most fund management groups increasing their levels of communication and providing good access to fund managers through webinars, group calls and video conferencing. This has enabled us to catch up with fund managers in a short space of time which, ordinarily, would have taken much longer face to face. Whilst this is likely to reduce over the coming weeks, it has set a precedent for the levels of access and support going forward.
So, what does this mean overall? A greater use of video conferencing and group calls from the office or from home and less face to face meetings in the short-term, but perhaps this will become the norm, with meetings in person solely for the initial introduction and contact. Does this affect the future of fund management group conferences? The larger conferences offer a variety of fund managers and topics of discussion and there is certainly a networking benefit, talking to your peers, getting a range of views/outlooks and picking up the odd snippet of industry news or gossip, but this type of event may not be an option for some time. This is all likely to mean less travelling, by car, by train and by air, which can only be a good thing, particularly for the environment but also potentially for mental wellbeing.
I don’t know about you but working from home does present its challenges. One of the main problems has been dedicating time to switch off and give the working brain a rest. Another has been dealing with the demands and questions of a young child, most of which, but not all, have been very cute and welcome.
Stewart Smith, Investment Research Manager, RSMR
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