Investors Adjusting Their Travel Practices Due to Coronavirus

The coronavirus that has been stoking increasing volatility across global markets has begun to give rise to travel concerns among large domestic institutional investors.

The Alaska Permanent Fund Corporation and the Pennsylvania Public School Employees’ Retirement System (PSERS) have both disallowed their employees from engaging in business-related international travel due to concerns of their staff becoming exposed to the virus, according to a report from The Wall Street Journal.

The ban will last for the remainder of March for Alaska Permanent’s employees, and until April 17 for Pennsylvania’s employees. While the rule remains in effect, employees are asked to engage in meetings through teleconference and video calls.

“The COVID-19 coronavirus situation remains very fluid and is rapidly evolving,” PSERS Chief Investment Officer Jim Grossman wrote in a memo, which was reviewed by The Wall Street Journal. “For the safety of the investment professionals, their families, and others at PSERS, we feel it is prudent at this time to ban international business travel.”

The Wall Street Journal reported that in the memo, Grossman asked staff to confirm any meetings they’re holding must first undergo a cursory check to determine if the individuals they’re to meet with have traveled to any regions that have witnessed a relatively high number of coronavirus diagnoses.

According to Johns Hopkins University, the countries outside of China with the highest counts of people infected with the virus are South Korea, Italy, and Iran, with several thousand cases each as of the time of publication.

A recent survey conducted by the Investment Management Due Diligence Association found that 29% of respondents, representing investment due diligence officers, have temporarily ceased conducting on-site due diligence meetings with investment managers.

One method they advised to circumvent any productivity losses due to health concerns was to conduct due diligence meetings through videoconference calls, citing that reading body language is a very important aspect of conducting due diligence and is accessible through videoconference.