What Alternative Investment Managers Should Avoid When Working from Home

COVID-19 and Considerations for Alternative Investment Funds

More than a decade ago, following the 2008 global financial crisis, it would have been unappealing to investors if alternative investment managers worked from their basement solely with a Bloomberg Terminal. However, as a result of COVID-19 giving managers no other option but to work from home (WFH), alternative investment funds have had to adapt accordingly and quickly to maintain their alpha and investor trust.

There are unending lists and guidelines about best practices – security, hardware and software, communications – available for that protocol. We at EisnerAmper have put together a few tips for alternative investment managers to avoid when WFH.  

Working in your Pajamas

“Working from home is a luxury with many potential pitfalls. The goal is to get into a productive routine and that starts the moment you wake up,” said one fund manager who ran his fund out of his home office for many years.

Everyone has done it -- when spending the day working from home there is nothing easier than doing the lazy thing and staying in your pajamas. The problem is the lack of separation between personal time and work time. By physically preparing for work, whether it be shaving, doing one’s hair or putting on semiprofessional work clothes (being fully suited and booted is probably overkill, but to each their own), one’s mind is triggered to focus on the work tasks ahead.

Working from the Couch or -- Even Worse -- the Bed

With a large portion of hedge fund managers living in close quarters in cities like New York City and San Francisco, many do not have the luxuries of a home office or separate room to work. Therefore, they have to be creative and find a quiet area to work. EisnerAmper learned of one manager with space constraints working from his laundry room.

Working from the couch, or even the bed, should be avoided for two reasons. First, it is important for managers to understand that their work area and relaxation/home areas are separate. When managers are at their home desk, their minds should be focused on ‘work’ and when they are in non-work areas they want their mind to be thinking ‘rest/personal time.’ 

Second, as with working in pajamas, it is hard for the mind to shift gears into work mode if lounging on the couch. 

Staying by the Computer at All Times

Given the recent market volatility, for many hedge fund managers it has been normal for them to keep their eyes on the market. However, whether managers are running their own fund or someone is a junior analyst starting their career in alternative investments, it is important not to spend every minute in front of the computer.  For operations professionals at funds, this can be a tricky issue to get right. The best thing to do here is to communicate with superiors to make sure everyone is on the same page.

Indeed, when working from home, alternative investment professionals, just like all professionals, often feel pressure to be at their screens at all times to ‘prove’ that they are working. This is not productive. 

Just as in the office, fund professionals do not need to reply to every internal chat within seconds and it is not a competition to be the first to respond to that group email. 

When in a dedicated home work area (ideally a desk that is only used for work), it is important to be focused and productive. Don’t just be at the screen to prove your presence. It is vital to take breaks as one would in the office and get into the habit of ensuring screen time is structured and efficient. Ultimately, this will ensure alternative investment professionals remain motivated whilst at home.

Not Exercising –

EisnerAmper has previously heard from alternative investment clients that as a result of exercising regularly, their investment performance increased. With gyms and boutique fitness studios being closed during this pandemic in many hedge fund centers, alternative investment professionals are naturally seeing a reduction on the number of daily ‘steps’ normally taken.

By not consciously addressing the issue, it is only a matter of time before overall health may begin to suffer. To counter this, there are several things fund managers can do. Go for a walk, take the dog out, go for a run or a bike ride, spend the first half of lunchtime doing yoga or a virtual exercise class. Not only will this keep daily activity levels up, but it will also allow managers  to focus and refresh the mind and work harder to generate more alpha.

Not Being Organized: Create a Shared Calendar

School closures across the globe have created another level of complexities for alternative investment professionals who now need to juggle their professional life, personal time and, at the same time, keep their children occupied.

Fund managers should consider creating a shared calendar with their partners to inform each other when the other is busy with work calls/webinars/virtual coffees (see next point) etc. (This will help also avoid an issue where both parents are busy at the same time and nobody is free to look after the children.)

Becoming too Isolated

Most fund managers are facing their first extended period of working from home. They are used to being around colleagues and communicating with their networks (both internally and externally). It is hard transitioning from an office environment to a more isolated home environment. Isolation can become stifling quickly and affect both production and health. There are two easy ways to fix this. 

First, it is important to maintain contact with the colleagues one interacts with on a daily basis (most fund managers have internal chat systems now; set up groups internally). 

Second, for many alternative investment professionals, networking is a large part of the job. Arrange ‘virtual coffee’ meet ups, reach out and check how they are doing (organize a video call – this will also ensure you are not on the couch in your pajamas.), check in with service providers and others in the industry. 

Indeed, this is now a time for funds to leverage their larger service providers for information and support. Basically for now, the best thing alternative investment industry professionals can do to keep themselves from being isolated is to move their relationships onto the virtual world.