Highlights from our Webinar: Meet the Fund Manager
This week we were delighted to be joined by three highly experienced fund managers from Fidelity International, Wellington Asset Management and MAN GLG, sharing their advice and views on COVID-related issues, and answering questions from the audience.
The webinar touched on a number of issues, in particular around corporate reporting and communications, which are addressed in our report ‘COVID-19: Snap poll of IROs’. This survey of our IRO members provides valuable insights into how companies are adapting to the crisis, and also includes a look at some of the near-term measures that have been taken to preserve corporate balance sheets. To read a full copy of the report click here.
A replay of the webinar is available to members in our events archive.
- Throughout the crisis so far, access to corporates and the frequency of communications has been very good and this is welcomed by the buyside
- Smaller virtual roadshows are preferred e.g. 1:1 or small group meetings
- Meetings using either audio or video are both fine
- Within buyside firms, internal coordination around company meetings and the sharing of information is important for effective corporate access
- Access to investor materials and other key information on the corporate website is imperative and avoids extra requests for an already busy IR team
- Direct contract from the IRO is welcomed. In these times, they applauded the responsiveness of IR and appreciate that management has difficult challenges and demands on time. Therefore, a brief update with the CEO/CFO is sufficient if IR is communicating regularly
- As an IRO don’t be afraid to say that you don’t know the answers to some questions – these are unprecedented times
- Companies that were successful going into the crisis are very likely to come out of the crisis successful, whereas those that were already structurally challenged rarely come out well
- Valuations (sales, earnings and cash flows) for 2022 rather than 2021 are now the focus. These are based on very conservative, and difficult to make, assumptions - what will the company look like post-COVID-19 and is the right management team in place?
- Until a vaccine is found, the future is very uncertain. Therefore, above all else, balance sheet strength is extremely important
- Fund managers are keen to understand not just the challenges presented by the crisis but also, in some instances, the opportunities that arise in these dislocations, for example to take market share
- They are still looking at potential investments. Market dislocation is providing an opportunity for fund managers to add new companies with strong fundamentals to the portfolio at attractive valuations
- Sector-wise, those where there has been supply disruption are attractive on a medium-term view. This includes airlines, where we are seeing significant reductions in capacity, and global cyclicals
- Additionally, technology and healthcare are very resilient sectors that were strong before COVIID-19 and will continue to be strong after the crisis
- ESG will have even greater importance post COVID-19. Companies are going to be measured not just on the treatment of shareholders but all stakeholders. Moving forward, companies will need a motivated workforce in order to succeed
- Fund managers are generally supportive of companies raising new equity as long as there is a strong case for why they are raising it and why they need it
Thank you to our guest speakers:
Anna Lundén – Wellington Asset Management
William Kennedy – Fidelity Investments
James Houlden – MAN GLG
Thanks also to Orient Capital, our sponsor for this event.
Published 14 May, 2020