The COVID-19 pandemic has brought unprecedented challenges to how hedge funds work, forcing firms to reimagine the future of offices and work arrangements.
As firms work through planning and possibilities, FundFire Alts sent a survey to the 15 largest hedge funds by assets under management, as counted by Preqin, excluding those housed in larger financial institutions. Bridgewater Associates, Man Group, and Marshall Wace sent back detailed responses giving a window into how leading players in the hedge fund space are thinking about the future of work. All other firms either declined to comment or did not respond to multiple requests.
The transition to working from home for most hedge funds hasn’t been as bad as it could have been had the pandemic hit even five years earlier, says Anthony Keizner, a partner at Odyssey Search Partners, which recently surveyed and spoke with 30 hedge funds with $1 billion or more in assets under management about their experiences working from home. The importance of business continuity plans rose after Hurricane Sandy hit New York City and working remote trials prepared firms, he says.
Firms are taking a “conservative” approach as they think through the next phase. “No one is solving for a date, what they are solving for is when is it the best balance of being safe and productive to return?” Keizner says.
Coping with the ’Rapid Shift’ to Remote Working
Ray Dalio’s Bridgewater Associates began monitoring the COVID-19 outbreak at its onset and by mid-January activated its business continuity plan in its China offices, said Robyn Shepherd, the firm’s head of corporate engagement in an email response to FundFire’s survey. “As a result, we were well prepared from a business continuity standpoint when COVID-19 reached our region, and we have been operating better than we could have expected,” she said.
Bridgewater had already stress-tested its work-from-home and social distancing protocols when COVID-19 swept the U.S. and has for several years equipped employees with laptops, video conferencing, and webinar capabilities. For the Connecticut-headquartered firm, the biggest change has been “being distanced from our friends and colleagues,” which began in early-March when the firm implemented a primarily work-from-home environment.
The firm has been using a variety of methods to stay connected, with CEO David McCormick hosting company-wide virtual townhalls and the firm’s chief administrative officer, Richard Falkenrath, hosting frequent question and answer sessions with infectious disease experts. Bridgewater has also formed a 10-person working group focused on understanding the virus and is developing tools to inform business operations. Additionally, Bridgewater has “enhanced” its benefits offerings including family care and access to medical professionals and testing, the firm said in its survey response.
Marshall Wace has seen nearly 100% of its London and New York staff working remotely and has replaced face-to-face meetings with video chats, document and screen sharing, and virtual meetings, according to a spokesperson. “[T]hese changes have not impacted our ability to manage our funds or to continue to drive our business forward,” the spokesperson said. The firm has also continued to onboard “strategic hires.”
Technology tools have proved key. Marshall Wace’s desktop architecture was designed “specifically for high latency and high jitter connections, which is often found in home internet setups,” the firm said in its survey response. Employees had been “pre-provisioned… with physical cloud-managed teleworker gateways and equipment.”
For Man Group, the biggest change COVID-19 brought was “the rapid shift to working from home for the majority of Man Group employees globally,” the firm said in an emailed response to FundFire’s survey.
Tech tools have been keeping firms connected internally as well as externally with clients. Man has been using WebEx, Slack and Jabber to stay connected, according to survey responses.
Heading Back to Offices?
The prospect of a return to offices raises questions around how to keep employees safe, on many levels, Keizner says. Firms have to consider how to manage risks associated with commuting into offices, using elevators, and sitting at desks, given their location and proximity to others. Firms are also considering deep cleaning, and HVAC systems.
“There’s a lot of uncertainty, and I think people are looking to each other and trying to find a best way through here,” he says.
Firms will need to think about details including having gloves, masks, and antibacterial products available for staff, as well as potentially staggering schedules, says Ernest Badway, a litigation attorney who is co-chair of Fox Rothschild’s securities industry practice. “I’m telling clients [to] first follow all the government regulations, whether federal, state or city,” he says.
All three firms in their responses noted the importance of the safety and well-being of their employees.
Bridgewater has not set a date for staff to return to its main offices. The firm plans to take a “conservative, gradual approach to phasing our staff back into Bridgewater’s physical offices” and is communicating with public health and pandemic experts as well as government and industry groups. The firm is anticipating measures including minimizing the concentration of employees, wearing masks in certain circumstances, additional facility cleanings, and taking other precautions, according to survey responses.
Marshall Wace is currently considering its return-to-work policies and said its return to regional offices will be informed by “government guidance, evolving epidemiological facts and evidence and our employees’ comfort with returning to the office as they manage personal health considerations, childcare commitments and other complications that this crisis has created,” according to a spokesperson for the firm.
The firm expects a “phased return” with the initial phase likely including policies on sanitizing supplies, “health screening in line with government mandates, social distancing within the office, reduced use of communal spaces such as meeting rooms, the temporary elimination of shared meal spaces, a restricted visitor policy governing meetings,” and “a strict ‘clean desk’ policy to aid in nightly cleaning and sanitizing,” according to survey responses.
Man Group has a dedicated COVID-19 response team that is monitoring and reviewing safety measures, policies, and government recommendations. Regarding returning staff to its main office, the firm said, “We are monitoring developments globally as the situation continues to be fluid, and will adjust our plans in line with local government guidance in the various jurisdictions in which we operate.”
The Future of Remote Work
As firms hit different milestones — 50, 60, 70 days — of remote working, the future of what flexible working arrangements will look like has come into question.
Bridgewater says it is “working to visualize what our day-to-day lives and business will be like post-pandemic” and that the pandemic has “given us a lot to think about in terms of workplace flexibility.”
Marshall Wace sees “definitive value” in having employees work alongside each other and said in survey responses, “We are therefore eager to once again see this creative environment come together in our offices.” But the firm noted that the pandemic has changed how employees view commuting and common spaces and that it will “certainly support and in some cases encourage more scheduled working from home as a way to both build additional capacity in the company, without the requirement to increase desk density.”
For Man Group, which has had the majority of its staff globally working from home and is “prepared to continue to operate from home for as long as is necessary,” remote work will likely play a bigger part in the firm’s future.
“In a post-pandemic world we will likely have more of our teams working either full-time or part-time from home, and we are encouraging employees to think about the environment that works best for them,” a spokesperson for the firm said. “We are discussing adapting some of the office structure to help this way of working succeed, with even more video conferencing facilities and flexible group spaces for brainstorming sessions.”