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Survey finds New York investment managers bullish on return to office in 2020

Thursday, June 25, 2020
Opalesque Industry Update - A majority of alternative investment managers (54%) expect to fully return to their offices by the end of the calendar year, according to The Seward & Kissel Alternative Investment Manager COVID-19 Survey, a survey of managers of hedge funds, private equity funds, and other alternative investment vehicles performed by the leading law firm to the hedge fund industry.

Respondents from New York City expressed even more optimism than those outside the city; 90% of New York-based respondents felt that half of their workforces would be back in the office by the end of 2020, compared to 75% for respondents based elsewhere.

While survey respondents based in New York City were more optimistic than others about how quickly they would return to the office, they also felt that the pandemic would have a greater impact on their firms' physical footprint. Nearly a third of respondents (28%) in New York City felt that their firms would reduce their office space, while only 5% of respondents working outside of New York City felt that their firms would do the same.

Respondents also indicated a widespread belief that the pandemic would have a significant impact on the way alternative investment managers work. After months in which participants performed their jobs from home, 72% believe that their firms are going to change their work-from-home policies. A substantial majority (69%) also felt that their office layout would change going forward.

Other key findings include:

Before the pandemic, the adoption of work-from-home policies correlated with firm size. Firms with 1-10 employees had the highest rate of adoption (63%) and firms with more than 100 employees had the lowest rate of adoption (33%).

Among all participants, 40% believe their firm is likely to consider hiring remote operations/accounting/IT personnel and 34% believe their firm is likely to consider hiring remote investment professionals. New York City respondents believed that their firms were more likely to consider remote professionals post-pandemic than those not in New York City.

Less than 10% of survey participants granted investor-friendly concessions on fee, liquidity, or reporting terms during the pandemic.

To conduct investor due diligence, respondents during the pandemic have relied more heavily on conference calls, video conferencing, and screen sharing; respondents increased their use of those tools by 63%, 60%, and 34%, respectively.

Firms with $5B+ in AUM experienced an increase in investor demand for both new and existing strategies at a higher rate than firms with less than $5B in AUM.

Seward & Kissel Investment Management Group partner, Steve Nadel, the lead author of The Seward & Kissel Alternative Investment Manager COVID-19 Survey:

"The survey highlights interesting disparities in policies and expectations for the future among funds with different workforce sizes and main office locations. Clearly, the ability to pivot effectively with respect to infrastructure, fundraising, and investment strategy will be a major differentiator for managers."

"Technology tools have obviously made it possible to work remotely more seamlessly than ever before, but certain survey results-like the relatively small percentage of respondents outside of New York City who believe that their office spaces will be reduced-suggest that physical workspaces still matter, especially for more complex organizations."

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