Brief : Wall Street's big investment banks are sending a message to their employees this summer: Get back into the office and bring your vaccination card. New York-based Morgan Stanley said this week that all employees will be required to attest to their vaccination status. Those who are not vaccinated will be required to work remotely, which could potentially put their jobs at risk, since the bank's top executives have said they want everyone back in the office by September. “If you can go into a restaurant in New York City, you can come into the office,” said Morgan Stanley CEO James Gorman at an industry conference earlier this month. Morgan Stanley is one of several big banks requiring employees to return to the office and also provide documentation of having received a coronavirus vaccine or making a formal declaration confirming vaccination. Goldman Sachs required most of its employees to return to the office on June 14, with some exceptions extending that deadline to Sept. 30. It requires every employee to state their vaccine status, but does not require proof. JPMorgan is asking employees to submit their vaccination records as well, in the form of an internal portal. The return-to-office push has its roots in banking-industry culture.
Brief: The pandemic has created a once-in-a-generation buying opportunity for investors willing to bet on the long-term prospects of workers returning to the hearts of global cities. That’s the view of real estate titans including Tishman Speyer Properties President Rob Speyer and Brookfield Asset Management Inc. Chief Executive Officer Bruce Flatt, who have invested billions snapping up discounted offices and other commercial buildings since the start of the pandemic. “There are extraordinary opportunistic things to buy in major cities around the world,” Speyer said during a panel at the Qatar Economic Forum Wednesday. “We have been active during Covid in Paris, in Washington D.C., in San Francisco, in London and people are just selling off real estate at 25%, 30%, 40% discounts.” Even as others fret about the future demand for workspace, Tishman has spent about $12 billion since March last year on deals it expects “to be some of the best investments we have ever made,” Speyer said. “If you have a long-term view of things reverting anywhere near where they were pre-Covid, these are generational buying opportunities.”
Brief: Brevan Howard Asset Management has stopped accepting new cash into its two biggest multi-manager funds after the firm’s record year of performance swelled the money pools. Assets in the Brevan Howard Master Fund, its main strategy, have more than doubled since the start of last year to more than $7 billion, and the money manager wants to control the size to maintain returns, according to people with knowledge of the matter. The firm has also closed the Brevan Howard Alpha Strategies Master Fund to new investment for similar reasons, said the people, who asked not to be identified as the information is private. The move marks a change of fortunes for the macro trading firm, which up until three years ago was fighting to stem an exodus of client money after several years of mediocre returns. Total assets had collapsed to about $6 billion from more than $40 billion in 2013. They have since risen to about $16 billion, one of the people said. A spokesman for the Jersey, Channel Islands-based investment firm declined to comment.
Brief : COVID-19 remained a top concern for chief compliance officers in the first half of 2021 as they continued to confront the challenges of monitoring a remote work environment. In March, industry experts cautioned that compliance officers were stretched desperately thin amid the pandemic, a sentiment that was backed by industry research showing that compliance and legal teams were having trouble keeping pace with investigations and audits. The challenges felt no less daunting as President Joe Biden issued a series of orders and memos that outlined a stiffer regulatory agenda, beginning in January with his calls for "regulations that promote the public interest." Conservatives warned this could lead to "hyper-regulation." Experts suggested compliance departments undertake a wholesale review of compliance policies and procedures to consider the new president's priorities, a recommendation that was renewed more recently as sweeping new anti-money-laundering rules edged closer to reality and Biden issued a memo signaling an even tougher U.S. stance on anti-corruption. Experts say there has been a perfect storm of challenges for compliance teams to juggle. And there's been no shortage of compliance news so far this year as companies seek to navigate a radically different risk and regulatory environment.
Brief: Net Inflows of USD23.3 billion in April signaled a continued vote of investor confidence in the hedge fund industry. This result represented an increase in industry AUM of .6 per cent on the month and built momentum on the previous month’s USD19.1 billion increase in assets, according to the Barclay Fund Flow Indicator published by BarclayHedge. Industry trading profits exceeded USD55.5 billion in April and carried the industry’s aggregate AUM figure past the USD4.18 trillion mark. “In the midst of a brightening economic outlook across the globe, it might be easy to miss the fact that hedge funds have delivered four strong quarters in a row and through a pandemic, no less,” says Ben Crawford, Head of Research at Backstop BarclayHedge. “Yet when you put that fact into conversation with the stories about glowing economic forecasts, new equity market records and the arrival of an additional USD1.9 trillion in US stimulus — then you have a representative set of factors playing out.” The increase in net inflows was broad-based, with most fund sectors attracting new assets in April. The strongest activity was among Fixed Income hedge funds which reaped an estimated USD8.2 billion, followed closely by Multi-Strategy funds which added another USD7.1 billion.
Brief: The benefits of diversification have been highlighted in the past 18 months and in this context, institutional investor appetite for emerging markets has increased. As they hunt for returns in a low interest environment and seek to take advantage of dislocations resulting from the Covid-19 turbulence, investors and asset managers have underscored the role an allocation to developing markets can play within portfolios. Although investment in emerging markets typically represents greater levels of risk, the opportunity identified is currently considered worthwhile, according to managers and institutional investors. “Conditions for emerging market debt outperformance in 2021 appear to be in place. First, a global backdrop of steady, extended monetary accommodation, prospects of a large-scale deployment of Covid-19 vaccines, and, to a lesser extent, expectations of fiscal stimulus in the US, should boost the growth-sensitive segments of the asset class,” wrote the Morgan Stanley global fixed income team in an outlook briefing. “Therefore, high yield credit, emerging market FX and local currency high-yielders should outperform investment grade, which has less of a valuation cushion, and is vulnerable to potentially steepening yield curves in our opinion.”