Money managers and institutional investors in the Asia-Pacific region are keeping each other at arm's length in an effort to bring the coronavirus outbreak under control, a trend that could weigh on new business opportunities for managers if it drags on.
That turn — at a time when stepping foot in the virus epicenter of mainland China can result in a 14-day quarantine — has transformed an industry of jet-setters into homebodies, with managers in financial centers such as Hong Kong and Singapore working from home to avoid colleagues as well as clients.
Along the way, road shows, visits to the region by key portfolio managers and all manner of on-site due diligence activities have been canceled or postponed.
There's no evidence to date that the industry's standoffish turn has derailed opportunities to win new business. One example: Aberdeen Standard Investments "just won a large mandate from Greater China" in recent days, noted Andrew Hendry, the firm's Singapore-based head of distribution for the Asia-Pacific region. He declined to name the client. Other managers, who likewise declined to be named, said their firms have also won mandates in February.
Still, some analysts predict a continued lockdown for managers and asset owners could trim the number of long-only mandates in play early this year and have an even greater impact on private markets allocations.
Tariq Ahmad, Singapore-based CEO and director, head of Asia with Brandywine Global Investment Management (Asia) Pte. Ltd., said while the spread of the coronavirus going forward remains uncertain, the outbreak could potentially depress new business activity in the region over the coming five or six months.
China — with more than 98% of the 75,748 confirmed coronavirus cases listed on the World Health Organization website as of Feb. 21 and more than 99% of the 2,129 outbreak-related deaths — remains the market most vulnerable to disruption.
In a fast-growing Asia-Pacific market where in-person meetings have traditionally greased the industry's wheels, market veterans say teleconferencing or videoconferencing should prove essential to getting through the current troubles.
"The use of technology and communication tools are key to keeping business going and growing during this time," said Ken Yap, Singapore-based managing director, Asia, with Cerulli Associates Asia Pte. Ltd.