Growth in the age of coronavirus

Wednesday 29th April 2020 Justin Cleveland

With the amount of general contraction happening in the broader economy, it’s easy to fall into a trap assuming that there are no opportunities for growth in the market.

The positive news stories we’re seeing are coming from companies who are taking a longitudinal approach to their business, either executing on strategic plans developed over the last year or new plans based on sudden needs.

Frontier Advisors, for example, has added nine mid-to-senior management positions in recent weeks. CEO Andrew Polson said the new people give them the flexibility to take on new challenges. “Our staff numbers have been growing strongly for some time and it’s exciting to be able to start the year with some more highly credentialled people across our entire business.

“In particular, we are adding valuable technical depth and many years of experience to our sector research teams, which will deliver a lot of value to our clients. And, it’s no secret we have ambitious plans to build our already strong technology capability out even further so it’s pleasing to be able to add more bandwith in this part of the firm,” he said.

Vamp is an Australian start-up that connects brands with influencers and content creators. They’ve appointed a CEO, Gill Findlay, and are looking to continue to grow their customer base.

“High-performing social advertising is more important than ever,” said Findlay. “Brands need to respond to the impact of COVID-19 on their customers, who are spending more time engaging with social content and buying online.”

The funding for Vamp was led by Investec Emerging Companies.

Riding the ESG train

There’s a startling image that’s been circulating on social media, showing oil tankers along the coast of the US that are not being allowed to offload their cargo because there’s no place for it to go.

With the prices below zero and the pressure that has put on traditional investments, ESG has become more attractive than ever.

Nigel Green, chief executive and founder of deVere Group, says, “Even before the start of the Covid-19 pandemic, ESG investments often outperformed the market and had lower volatility over the long-run.

"What is perhaps more impressive is that those investments with robust ESG credentials are still typically continuing to outperform throughout the coronavirus-triggered stock market crashes where major indices were extremely volatile, with some plummeting 20 per cent.

"Clearly this is going to increasingly attract both retail and institutional investors seeking decent returns in turbulent times."

Will this interest in ESG last? Just because it’s top of mind right now, First Sentier Investors responsible investment specialist Kate Turner isn’t sure. “We have seen temporary benefits, but it will be interesting to see whether there is a rush to get ‘back to normal’ as we emerge from this crisis, whatever the cost to the environment. Or will we see an acceptance that our old definition of ‘normal’ is out of date, and that we should try to re-build our society and economy in a more suitable way.

"Hopefully this pandemic will shine a light on the importance of identifying and mitigating the risks of other potential, high-impact global events triggered by forces like climate change. Even when we don’t know exactly when or how they will hit, we need to accept that they are likely to happen and plan appropriately," Turner said.

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