Summit News

Investment fund workers crave company, but work-from-home here-to-stay

NEW YORK (Reuters) - The alphabet soup in the finance industry, which already lives off EBITDA and AUM, may get a new addition in the form of WFH4EVA as work-from-home becomes the new post-pandemic normal.

A woman prepares a coffee as she works in a house while workers are forced to work from home and demand payback for extra home office costs during the coronavirus disease (COVID-19) outbreak in Sassenheim, Netherlands October 2, 2020. Picture taken October 2, 2020. REUTERS/Eva Plevier

After nine months of working remotely to escape the dangers of crowded offices and mass transit, blamed for spreading the coronavirus, bankers, traders and investors await a vaccine they hope will usher in a return to normal.

But for many, a new normal may look a lot like what they’ve been experiencing for months: days hunched over computers at home and meetings on Zoom, bankers and investors told the Reuters Global Investment Outlook Summit this week.

The pandemic has pushed how people work into the future by about a decade, they said, adding that there will be benefits ranging from increased flexibility for employees and cost savings for employers. But there may also be negatives that could dent productivity and spark health crises.

“We are increasingly seeing white-collar companies realize that the flexibility employees wanted for some time doesn’t come with any real drawbacks,” said Max Gokhman, who oversees $32 billion as head of asset allocation at Pacific Life Fund Advisors and quipped that he coined the new acronym WFH4EVA.

Dozens of employees at New York-based investment firms decamped to California, Florida and Texas to escape colder temperatures, using the time they save commuting to exercise or cook, several said.

Many plan to stay put, with their bosses’ blessings.

Not battling for seats on commuter trains, saving on dry cleaning and taking a midday walk are positives that may guard against burnout.

For employers renting millions of square feet in the heart of some of the world’s most expensive cities, more flexible office setups could spell big savings.

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Trading floors will remain staffed in person, but analysts and others do not have to be in every day, which could reduce office rents. “We will have less of a physical footprint in dense cities,” said Jeffrey Solomon, chairman and chief executive officer at investment bank Cowen Inc.

He also credits more working from home with widening firms’ talent pools through what he says will be more diverse staff recruitment. “There will be significantly more fluidity in hiring.”

Once a vaccine is broadly available, workers who are desperate for a vacation away from home are likely to seize the opportunity to travel. But after the first rush to travel is satisfied, investors said longer-term, business travel, for example, may not boom.

“I don’t have to be in the office physically every minute of every day, but I don’t have to travel so much going forward,” said Rick Rieder, chief investment officer of Global Fixed Income and head of the Global Allocation Team at BlackRock. BlackRock manages $2.5 trillion in fixed income assets.

The flip side of making remote work more permanent could spell fresh pain for retailers and fast food establishments in cities drained of office workers, investors said.

“That probably does mean that is a sector that won’t come back as quickly as we thought it would,” said Jim Leaviss, chief investment officer for fixed income at M&G Investments.

It might also be potentially negative for employees who crave human contact and say productivity depends on teams throwing mathematical formulas on a white board, which does not work on Zoom, several said.

“My concerns have been more on the mental health side, the longer this gets,” said Jose Minaya, chief executive officer of Nuveen, the $1.1 trillion investment manager owned by TIAA.

“As we get into winter months I do worry about the fatigue of it,” he said.

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Reporting by Svea Herbst-Bayliss; additional reporting by Ross Kerber, Dhara Ranasinghe, Sujata Rao-Coverley and Megan Davies; editing by Megan Davies and Dan Grebler