Alternative Investment Industry Outlook on RTO
- Sep 30, 2021
With COVID-19 vaccine mandates now a reality in the U.S., many firms in the financial services and alternative investment industry have required their employees to return to the office (RTO), at least on a hybrid basis, while others have delayed the anticipated post-Labor Day return due to the Delta variant.
In August, Goldman Sachs mandated vaccines for its U.S. employees, clients and visitors into its offices, effective September 7, setting the tone for many financial services firms. Morgan Stanley and Citigroup are also a couple of investment banks that require vaccines.
EisnerAmper spoke to a few alternative investment managers to get their outlook on whether vaccine requirements impacted RTO and their views were mixed.
Manhattan West, a Los Angeles-based alternative investments and wealth manager, has instated a mandatory vaccine requirement for its employees and everyone has been back to the office full-time, and that plan will remain. In addition, the firm isn’t allowing people into the office that have not been vaccinated.
“As strong advocates of getting vaccinated, if the answer is no to vaccination, then you can’t work at Manhattan West,” said Lorenzo Esparza, Founder & CEO.
He added: “As advisors, it is our responsibility to look at all this [medical research] while examining the data and we made a prediction, at the start, about the potential deaths. It turns out it [the prediction] was severely understated. Once again, they are predicting we will never get rid of this virus and the country will not reach herd immunity.”
Meanwhile, Star Mountain Capital, a New York-based asset management firm with origination teams in over 20 cities across the U.S. focused exclusively on the lower middle-market, has not required employees to RTO.
“Since the start of the pandemic, our approach has been employee-centric and we are proud to offer everyone flexible schedules,” said CEO Brett Hickey.
He added: “Flexible schedules allow you to have more face time with family, optimizes life and health, family and work. Society is evolving and there is a greater focus on health and wellness.”
Star Mountain has also invested in setting up proper home offices for their workforce.
“Paying to furnish a proper home office allows for a flexible schedule, and can allow for time both in the office as well as outside the office,” Hickey added.
Finally, other firms were not impacted by the vaccine rollout. Maximus Long Short Equity Management, a New York City-based hedge fund manager, is one firm that has allowed employees to work virtually and come in only if they were comfortable.
“The new mandate has not changed our firm’s view on our return to office policy,” said Greg Royce, founder and CEO, who has been in the office since January. “I believe that as soon as the bigger organizations are open to a full return, Maximus is ready and willing to embrace the opportunities that will come along with it. Those missed opportunities have been one of the challenges of operating in a mainly virtual environment. It lacks the interpersonal touch both internally and externally. While trying to grow a business and cultivate relationships, the inability to meet in person can have an effect on being able to raise new capital. However, my outlook on this matter is extremely positive as we have already seen the industry trending towards this direction, with invites to conferences starting to change the location settings from ‘A Virtual Event’ to ‘In Person Optional.’”
EisnerAmper has observed that since the start of the COVID-19 pandemic, very few, if any new New York City-based fund managers have said they would open a physical office.
“In speaking with new fund managers in New York, over the last 18 months I have not spoken with many that plan to open a physical office in the City any time soon,” said David Goldstein, an EisnerAmper Financial Services Group employee. “Many are opting instead for an office in Stamford, Fairfield, out on Long Island, New Jersey, etc. One option has been to contract with a shared office space provider, so they have that physical presence in the City as required for investor and service provider meetings.”
Just as with the landscape and the virus, discussions surrounding RTO will continue to evolve. While flexibility and fluidity are both positive and necessary attributes, overall, there appears to be a longing for in person interactions and collaborations. Ultimately each firm will have its own different policies and procedures addressing its own set of challenges, in order to meet expectations. These policies are reflective of the beliefs and outlook of the individuals who create these polices as well as the image and firm culture they wish to cultivate at their respective firms.
The views and opinions expressed above are of the respective interviewees only, and do not/are not intended to reflect the views of EisnerAmper.
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Thomas Murdoch is a Partner in the firm specializing in financial statement audits serving private equity clients, hedge funds and funds of funds.
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