Brief : BlackRock Inc. is adjusting its plans for U.S. employees to return to the office, allowing only fully-vaccinated staff to come back to work starting next month. The world’s biggest asset manager said that U.S.-based employees who’ve been inoculated against Covid-19 can resume in-person work in July and August if they’d like to, according to a memo from the New York-based company. Non-vaccinated staffers are not allowed in the office, the memo said. All employees will be required to report their vaccination status by June 30. The company said it will provide an update for non-vaccinated employees later this summer. The company already announced plans to bring employees back to the office in September while allowing some remote work. Firms across Wall Street are experimenting with how to bring back workers, with some companies -- like Goldman Sachs Group Inc. -- taking a more ambitious stance about workers coming back, and others -- like BlackRock -- pursuing a hybrid approach. BlackRock changed its policy after receiving feedback from employees who said they would feel better about returning to work if their colleagues in the office were vaccinated.
Brief: Bank of America Corp. expects all of its vaccinated employees to return to the office after Labor Day in early September, and will then focus on developing plans for returning unvaccinated workers to its sites. More than 70,000 of the firm’s employees have voluntarily disclosed their vaccine status to the bank, Chief Executive Officer Brian Moynihan said in a Bloomberg Television interview Thursday. The firm, which has more than 210,000 employees globally, has already invited those who have received their shots to begin returning. “Right now we’re moving people back who are vaccinated,” Moynihan said. “We’re concentrating on getting them back to work because that allows people to move about under the CDC guidelines without masks and thing like that.” Bank of America and its rivals have begun unveiling plans in recent weeks to return thousands of workers to towers in New York and elsewhere in coming months as vaccines abound across the U.S. Goldman Sachs Group Inc. asked its New York staff to begin returning this week, marking the most ambitious plan among major Wall Street firms.
Brief: Despite any headwinds caused by the pandemic, the private equity industry has remained strong, with investor demand and planned allocations continuing to grow. However, with high levels of dry powder and increasing regulator scrutiny, startup private equity funds have much to contend with. “There is currently more money available in private equity. The among of dry powder has exploded and is the highest it’s been in 10 years,” remarks Alain Kinsch, co-chairman of the Association of the Luxembourg Fund Industry (ALFI) Private Equity Committee and Vice-President of the Luxembourg Private Equity and Venture Capital Association. According to Hugh MacArthur, Partner, Bain & Co: “Total investment value last year was supported by ever-larger deals, not more deals. This fact is important because it means many GPs did not get the deals done that they had intended to in 2020. “With soaring levels of dry powder, robust credit markets and recovering economies, 2021 deal markets promise to be incredibly busy.”
Brief: If there is a prolonged shift in sentiment towards UK equities, the likelihood is that just as the negative view dragged the valuation of all companies down, so a rally in UK equities has the potential to place many stocks, good and mediocre alike, at elevated valuations. This creates a challenge for UK fund managers, as they seek to create portfolios without owning over-priced assets. Alexandra Jackson, who runs the Rathbone UK Opportunities fund, says one area to avoid at present is hospitality, despite the present good news surrounding the sector, as much uncertainty remains about the scale of future demand, particularly in London. Her view is that the valuations of many of those stocks already reflect positive news for the sector, but do not necessarily reflect the ongoing uncertainty. With this in mind, her way of gaining exposure to the reopening of the hospitality sector is via Johnson Service Group, a supplier of linen to the hospitality sector. She says the company will benefit from the cyclical recovery, but also may grow structurally in future if the public becomes more focused on hygiene issues as a result of the pandemic.
Brief: As global asset management industry recovers from the Covid-19 pandemic, Moody’s has shifted its outlook for investment managers from negative to stable. In its June 2021 global asset management report, the credit rating company revised its outlook on the asset management industry, attributing the change to the strong market rebound after March 2020, the recovery of organic growth rates, and the resulting recovery in investor risk appetite. The report, which was published Wednesday, also noted that, as a result of strong market performance, asset managers’s revenue and profit margins have recovered from the pandemic crash. “The industry has been resilient through the pandemic,” Rory Callagy, associate managing director at Moody’s Investors Services and lead author of the study, said in an interview. “Private markets provided a lot of that support, but there are also positive trends in the operating fundamentals.” In March 2020, extreme market volatility caused assets under management to fall. Moody’s analysts had expected this decline to send reverberations through the market for the rest of the year, but by the second quarter of 2020, the equity markets had “rebounded sharply,” the report said.