A new factor is developing among consultants in their assessments of money managers due to the coronavirus pandemic.
While the culture and operational measures of a firm have been highly important for investment consultants when putting ratings on money management firms, the way these managers are handling the COVID-19 environment, lockdown and remote-working situation is under scrutiny.
"Consultants have always done very elaborate operational due diligence, but the focus on business continuity planning is heightened," said Paget MacColl, New York-based managing director and co-head of the Americas institutional client business at Goldman Sachs Asset Management. "We have seen a lot of formal questionnaires from consultants asking about the operational impact, and almost weekly update calls — how has the BCP been implemented, how is it going; and they are trying to figure out metrics to measure that. There is also a big focus on culture — what they are finding and probing is that certain cultures are more conducive to working from home," Ms. MacColl said.
For Mercer Ltd., a firm's culture remains important "and we would argue at times like this you do see the true culture of a firm coming through," said Debbie Clarke, London-based global head of investment research. "We have asked organizations about how they have treated their human capital during this time." Questions include whether firms have put the health and safety of their employees first, whether they have reduced their workforces and what their return-to-work policies look like. They are also looking at whether firms have taken money from governments — something they would not expect managers to do.
