Q&A with asset manager Flossbach von Storch: COVID-19 as a catalyst for transformation
With COVID-19 having a profound impact on the global markets, investment managers around the world are having to adapt to market volatility and increasingly shift back towards active trading strategies. Alongside volatility in the markets, the pandemic has also forced asset managers everywhere to work from home. This has created additional challenges, with workflows swiftly being transitioned to almost entirely operating in the cloud.
Asset managers that fail to harness this COVID-19 induced drive towards technology will be left in lockdown; those that have will be thriving in this new normal and future-proofing their businesses for whatever 2021 has in store.
TradingScreen sat down with German asset management firm, Michael Barsuhn, Head of Trading at Flossbach von Storch, to discuss how they have been adapting to the impact of COVID-19 and what the asset management industry might look like in future.
How has your strategy and/or your messaging to customers shifted as a result of COVID-19?
While COVID-19 has obviously had a huge impact on businesses everywhere, we haven’t had to make any changes to our Portfolio Management strategy. In terms of communication and messaging, this has partly shifted from personal meetings and investor conferences to video presentations and other digital channels.
What actions are you taking to continue to provide value to your current customer base?
We’ve been focusing on sticking to our investment guidelines and delivering absolute returns to our investors. In addition to this, we have intensified active communications with investors amid the current market situation to help set expectations for the future.
What do you see as the most significant challenge to traders in the short-term?
The most significant challenge for traders in the short-term is how to react to the rapid changes in market conditions such as volumes and volatility, as well as reacting to the changes in market structure in a flexible manner that strictly focuses on investor needs and Portfolio Management requirements.
What advice would you give to fellow traders in the industry?
Don´t try to beat benchmarks that don´t serve the investor. Instead, focus on your investors´ needs and add real value to the trading process.
Market volatility - how has it impacted you?
The market volatility has mainly impacted us as we’ve had to source liquidity. The challenging market conditions have meant that traders are always balancing this with market impact, timing, and pricing.
How has workflow been impacted on a day-to-day basis?
Since the beginning of March, all of our traders have been working from home. This has made quick and effective communication between traders much more complicated than in a regular office setup. In one day, we changed our workflow from paper tickets handed over by Portfolio Management, to 100% digital workflow, which has added an enormous amount of efficiency to the process.
Do you believe any new ideas, approaches, or opportunities will come out of this crisis?
Hopefully, digitalisation will stay and further evolve in several areas, including workflow and communication. Further, having more employees work partly from home in the future will add flexibility for employees and employers. We expect that this will be a positive influence on their work-life-balance.