Coronavirus Round-up: “Now is the time for courageous decisions” – Wellcome Trust

Investment news and the global pandemic

“Now is not the time to make cautious investments: now is the time for courageous decisions.” The words of Alex Harris, Head of Global Policy and Advocacy at the Wellcome Trust, the UK foundation with a £26.8bn portfolio. “In the short term, at least $8 billion is needed to fund research, development and supply of treatments for all, and support for public health measures in countries with the weakest health systems,” Harris wrote.

Edward Mason, head of responsible investment at the UK’s £8.3bn Church Commissioners, has told the Guardian that the outbreak would renew calls for responsible capitalism and make companies reconsider issues like high pay. He was quoted saying: “Some of the post-financial crisis themes we’ve seen around corporate tax, not having excessive executive remuneration, treating people fairly, treating staff fairly – I think all these issues are already part of the public discourse on coronavirus.”

London Heathrow airport, where UK academic fund Universities Superannuation Scheme has a stake and a board seat, is scaling back its operations in response to the “seismic challenge” of the pandemic. “Whilst we remain committed to remaining open, Heathrow’s financial performance will be significantly impacted by this unprecedented situation. We are taking a number of immediate actions to safeguard the financial resilience of the business. Initial steps we have already taken include reducing operating costs, cancelling executive pay, freezing recruitment and reviewing all capital projects.”

CalPERS’ portfolio has shed around $69bn amid the coronavirus crisis, according to a Sacramento Bee story citing officials at the largest US pension fund. It said CalPERS’ assets were down to c.$335bn last week – down from a record high of $404bn a month ago. The SacBee quoted CalPERS’ CEO Marcie Frost as saying the fund is better positioned to weather a downturn than it was at the time of the financial crisis; it quoted her as saying CalPERS was “planning for a market downturn or correction in the market for the last couple years”. The paper said fellow California fund CalSTRS “likely experienced similar losses” though the $243bn teachers’ fund doesn’t report as often

The Caisse de dépôt et placement du Québec’s real estate arm, Ivanhoé Cambridge, said it is closing all of its shopping centres in Québec from March 23 – May 1. The C$64bn (€41bn) firm is granting a deferral of the rent payable by tenants “until a later date to be identified”.

Management consulting firm Arthur D. Little has initiated an international pro bono platform for CEOs to exchange COVID-19 crisis management experiences while dealing with COVID-19.

The Financial Conduct Authority, the UK regulator, “strongly requests” all listed companies observe a moratorium on the publication of preliminary financial statements for at least two weeks. It said the “unprecedented events” mean that the basis on which companies are reporting and planning is changing rapidly.

The pandemic will hit the global economy “for years to come”, Organisation for Economic Co-operation and Development (OECD) Secretary General Angel Gurria told the BBC. He said it was “wishful thinking” that economies could bounce back quickly from the outbreak.

An “overwhelming majority” of institutional investors surveyed by advisory firm Eaton Partners say the outbreak is already having an impact on their investing activity. The survey of 69 private equity limited partners (clients) questioned them about how COVID-19 could influence their investment strategies in the private capital market. Despite the apprehension, 78% said they would not reduce or pull capital out of specific geographic regions because of coronavirus. Eaton Partners said there was a “general feeling that private equity could be a well-positioned, steady-hand investor” during the volatility.

Goldman Sachs has put more than $1bn into two of its prime money-market portfolios due to heavy investor withdrawals, according to a Reuters report citing a regulatory filing made by the Wall Street banking giant. The report said Goldman bought $722m in assets from its Goldman Sachs Financial Square Money Market Fund and $301m from its Goldman Sachs Fund Square Prime Obligations Fund. Reuters added the company “did not have an immediate comment”.