Contingency plans succeed though hardships remain
Two weeks after Hurricane Sandy ravaged swaths of New York, New Jersey and Connecticut, a number of money management firms still are waiting for their offices to be reopened.
Among investment managers and financial service providers that have kept operations up and running through contingency planning but still are waiting for their lower Manhattan offices to become habitable are Prudential Financial Inc., BNY Mellon Corp. and CUSIP Global Services.
OppenheimerFunds Inc.'s office in hard-hit Two World Financial Center was closed at the height of the Oct. 29 hurricane and for several days afterward. Lord Abbett & Co. LLC is back to normal operations in its Jersey City, N.J., office but with New Jersey Transit's train lines still out of service, charter buses are shuttling many employees to work.
Midtown Manhattan investment managers imposed office closures and directed employees to work remotely during, and for a few days after, Sandy's landfall, but most were able to resume regular operations by Nov. 2. Contingency plans that moved essential processes to remote data recovery sites or kept only critical employees in the New York offices were invoked by many companies including BlackRock (BLK) Inc. (BLK), Christian Brothers Investment Services Inc., Goldman Sachs Asset Management, J.P. Morgan Asset Management (JPM), Morgan Stanley (MS) Investment Management and Neuberger Berman Group.
BNY Mellon's downtown offices didn't suffer storm damage but the lack of electricity and heat likely will keep them closed until early this week, said Ronald R. Gruendl, a company spokesman based in Philadelphia. BNY employees based in lower Manhattan have been working remotely or their work was transferred to employees in other locations, Mr. Gruendl said in an e-mail.
The 50 employees of CUSIP Global Services, on the other hand, have no idea when their severely flood-damaged office at 55 Water St. in lower Manhattan will reopen, said Matthew Bastian, director of market and business development.
Because CUSIP issues identification codes for most publicly traded assets in the U.S., it was essential that the company's emergency plan work perfectly so stocks, bonds and other securities could be viewed by potential investors and traded when possible, Mr. Bastian said. The firm is a subsidiary of Standard & Poor's.
CUSIP's contingency plan was implemented on Oct. 29 and it ensured employees could tap into everything they have on their regular desktops remotely. Operations were shifted to an East Windsor, N.J., disaster recovery site owned by S&P's parent company, The McGraw Hill Cos.
CUSIP employees have been working from home, if they have power and web connectivity, or at the disaster center. “Basically, we all are doing whatever we need to do to get to a desk with power,” Mr. Bastian said.
Still a challenge
While most investment companies located in midtown Manhattan were running fairly normally in their headquarters and satellite offices by Nov. 1 or 2, observers said, finding a desk in New Jersey with power and connectivity still is a challenge.
At press time, more than 400,000 New Jersey businesses and residences still were without power. And last week's nor'easter — which dumped snow, sleet and rain in varying amounts across the Garden State on Nov. 7 — exacerbated utility companies' efforts to restore power.
Two storms striking within a 10-day period meant New Jersey money managers faced more challenges in getting back to business as usual than their midtown Manhattan counterparts.
Prudential Financial, based in Newark, lost power at a number of its New Jersey facilities and in its One New York Plaza office in lower Manhattan.
All of Prudential Financial's offices in the area now are open and fully operational except the New York office, which is near the South Street Seaport terminal. Employees based in that office have been working in temporary office space but will relocated to other company offices by early this week, said Karen Moore, a company spokeswoman.
Prudential's business contingency plan transferred operations to recovery sites away from the storm-struck area and allowed employees to work remotely.
Prudential set up and still maintains “warm sites” in New Jersey offices that have heat, electricity, phones and hot meals for employees and their families who don't have power at home.
Lord Abbett & Co.'s Jersey City headquarters lost power and suffered modest flooding during the Oct. 29 storm, but employees were told over the weekend to work from home on Oct. 29 and 30, said James Sansevero, a spokesman.
Operations were transferred to a backup facility on Oct. 31 and then back to headquarters on Nov. 5. But getting employees to the Jersey City office has required company intervention, Mr. Sansevero said.
Charter bus service to and from Manhattan now is available for the 200 Lord Abbett employees who live there; Long Island, Staten Island and Connecticut residents are making their way by public transportation to Hoboken, N.J., where a Lord Abbett shuttle meets them.
Employees at Jacobs Levy Equity Management Inc. in Florham Park, N.J., worked remotely on Oct. 29 and 30 when U.S. stock markets were closed. By a stroke of luck, the half of the office building occupied by Jacob Levy's headquarters had power, so operations were not transferred to a backup site, said Bruce Jacobs, president and principal. About 90% of the firm's employees were able to get into the office on Oct. 31, despite power losses and property and car damage, and the full staff was at work by Nov. 2.
The challenge now is finding gasoline, Mr. Jacobs said. “Our employees are so dedicated and doing what they have to do to find gas so they can get to work, but it is difficult.”
Pine Grove Asset Management LLC is located on the side of a street in downtown Summit, N.J., that did not lose power. Executives opted to transfer operations to outside disaster contingency services to be on the safe side, said Matthew D. Stadtmauer, president. But the office remains open to neighboring businesses that still are without electricity, heat and Internet connectivity.
“Summit is a money management town,” Mr. Stadtmauer said. ”A lot of people work in the industry here or in New York, and we felt like we should do what we can. We certainly have met a lot of our neighbors. You just have to learn to cope and move along under circumstances like this.”
This article originally appeared in the November 12, 2012 print issue as, "Some offices still unusable after superstorm slams East".