Asset owners and their money managers are adapting to seeing less of each other when it comes to the day-to-day business of managing institutional portfolios.
The spread of COVID-19 across the globe and the potential threat it represents to human health and disruption to basic business practices in the U.S. have led to significantly curtailed travel and heavier reliance on remote meeting technology by both investors and managers.
"Everyone in the North American investment management industry is watching everything going on across the world very carefully," said Donald A. Steinbrugge, founder and CEO of Agecroft Partners LLC, a hedge fund consulting firm in Richmond, Va.
"While most of the virus cases are in faraway places like northern Italy, Iran, South Korea and other Asian countries, the situation in the U.S. and Europe could escalate significantly in a matter of weeks," Mr. Steinbrugge said in an interview.
More cases of the virus in the U.S. were identified last week as testing increased. As of March 5, U.S. officials had reported 11 deaths from the virus and more than 164 cases.
Given heightened volatility across global markets over COVID-19 fears, asset owners are relying on managers and consultants to stay in touch through conference calls and videoconferences as all parties implement travel restrictions.
Performance of major market indexes has been unnerving in the two weeks ended March 6 with the S&P 500 index down 10.95%; MSCI ACWI index down 10.09%; and Bloomberg Barclays Aggregate U.S. Bond index up 3.16%. The 10-year Treasury rate fell to 0.76% from 1.47% over the period.
Both money managers and asset owners described to Pensions & Investments the curbs they've put on employee travel, especially to Asia, Iran and Italy.
Northern Trust Asset Management, Chicago, has stopped all non-essential international travel and is encouraging staff to minimize non-essential domestic travel, including meetings with investors and visits to the firm's other offices, company spokesman Tom Pinto said in an email.
Northern Trust has "employed social-distancing strategies to limit large-scale, face-to-face meetings and whenever possible to leverage technology and communication tools such as videoconferencing, Skype, etc.," Mr. Pinto said.
Northern Trust managed $1 trillion as of Dec. 31.
Vanguard Group Inc., Malvern, Pa., also has mostly curtailed employee travel overseas and has "limited all large-scale group gatherings and has instructed its crew to cancel any plans to attend non-client or non-business essential events such as industry conferences," said Dana Grosser, a company spokeswoman, in an email.
She said she couldn't share information about how Vanguard is communicating with its institutional investors and investment consultants.
Vanguard managed $6.2 trillion as of Dec. 31.