Money management firms delay plans to return to office

Money managers are taking a close look at their work practices, with some delaying employee re-entry dates for physical offices and many implementing new hybrid work practices.

The sharp uptick in the rate of cases tied to the delta variant of the coronavirus has convinced some money managers to delay the full opening of their U.S. offices for safety's sake.

Among firms that pushed their initial early fall U.S. return-to-office dates to October are BlackRock Inc., Pacific Investment Management Co. LLC, Putnam Investment Management LLC and T. Rowe Price Associates Inc.

Most managers are bringing their employees back to work on hybrid schedules that allow them to work remotely for part of each week, industry sources said. One firm that isn't bringing its employees back into existing offices in New York is State Street Corp., Boston, which said Aug. 16 that it is closing its two offices in the city as part of its move to a hybrid working model.

"The vast majority of the investment industry will move to hybrid models as quickly as possible from conversations we've had with managers. The aim is to have employees in the office three days a week," said Yariv Itah, a Stamford, Conn.-based managing principal of Casey Quirk, a practice of Deloitte Consulting LLC.

New York-based BlackRock pushed back its employees' return to U.S. offices to Oct. 1 from the beginning of September because of the delta variant threat and will start its new hybrid working arrangement afterward.

The variant "raises concerns about returning to the office, even for those who are vaccinated and particularly for those of you with dependents at home who are currently ineligible for the vaccine," BlackRock told its employees in an Aug. 5 internal memo obtained by Pensions & Investments.

BlackRock is allowing only vaccinated employees in its U.S. offices until Oct. 1, said Devon Burgess, a BlackRock spokesman, in an email.

BlackRock will implement its new "future of work" hybrid model — three days in the office and two flexible days — after Oct. 1.

BlackRock managed $9.5 trillion as of June 30.

Baltimore-based T. Rowe Price postponed its return to the office to Oct. 18 from Sept. 13, a company spokesman said in an email. "We made this decision to help reduce the potential for continued community spread of the delta variant and to support a safer working environment," he said.

T. Rowe Price is "encouraging" employees to get vaccinated but won't require vaccination, the spokesman added.

The firm is rolling out a more flexible work-from-home policy for most associates and is working across business units and locations to design the appropriate level of flexibility to align different jobs and locations, the spokesman said.

T. Rowe Price managed $1.62 trillion as of June 30.

Putnam Investment Management also delayed the reopening of its U.S. offices until Oct. 4 from Sept. 7, said company spokeswoman Laura McNamara in an email.

The Boston-based firm is moving to a flexible environment that will allow its operating units to design their own work models, which could include a hybrid mix or fully remote working, she added.

Putnam also is requiring vaccinations for all employees in U.S. offices, Ms. McNamara said.

Putnam managed $200 billion as of July 31.

Alternative asset manager Bridgewater Associates LP, Westport, Conn., is closely monitoring the delta variant of the coronavirus and will reopen its offices in mid-October at earliest, said Nir Bar Dea, deputy CEO, in an email.

"The firm has learned a lot about the benefits of remote work and still is learning, but this also has been a good reminder of how meaningful time together in the office is to the company and to employees' lives," he said.

The plan as of now will see most Bridgewater employees working in the office two or three days a week (Tuesday, Wednesday or Thursday) with one "all-company" day when all employees will be on site, Mr. Bar Dea said.

Mr. Bar Dea said the firm plans to use in-office time strategically to focus on "interactions that are hard to replicate remotely" including collaboration, creative brainstorming, development and building relationships.

Bridgewater requires that employees be vaccinated but allows exceptions for religious or medical reasons.

Bridgewater managed $150 billion in hedge funds and risk-parity strategies as of July 31.

The new model for Vanguard, Malvern, Pa., will "blend increased flexibility with the known benefits of in-person collaboration" in its U.S. offices, said company spokeswoman Emily Farrell in an email.

The firm is taking a three-pronged approach, with employees able to work predominantly at the office, predominantly from home and "for the vast majority" of employees, a hybrid model, Ms. Farrell said.

October is the soonest Vanguard's U.S. employees will return to their offices, she said.

Ms. Farrell said Vanguard is strongly encouraging employees to be vaccinated but is not mandating that they do so.

Vanguard managed $8.1 trillion as of July 31.

Fidelity Investments, Boston, has yet to set a date for employees to return to its U.S. offices, said spokesman Michael Aalto in an email.

Retail investment employees have been working at store-front offices throughout the pandemic and a small number of employees in investment management, operations, marketing and other roles now are participating in voluntary in-office pilot programs; the majority of other U.S. employees are continuing to work remotely, Mr. Aalto said.

Fidelity is not mandating vaccinations for its employees, Mr. Aalto said.

"We are still evaluating our return-to-office plans, and no dates or firm decisions have been made," he said.

He said the firm is evaluating hybrid models, adding that "the amount of time in the office will be determined by an employee's job role and responsibilities. It will not be the same model for every single business unit or employee."

Fidelity Investments managed $4.2 trillion in discretionary assets and had $11.1 trillion in assets under administration as of June 30.

PIMCO and Goldman Sachs Group Inc. are maintaining current working practices and are not adopting hybrid or remote models.

PIMCO, Newport Beach, Calif., plans a full return to full-time work in its U.S. office with a phased-in approach throughout October, said a spokeswoman in an email. PIMCO originally set a back-to-work date of Sept. 7. It managed $2.2 trillion as of June 30.

Most of New York-based Goldman Sachs' employees have returned to their offices and will continue to work there full time with no plans for any hybrid model, a company spokeswoman said. The U.S. offices were reopened on June 10.

Employees are required to disclose their vaccination status, and those not vaccinated must be tested regularly, the spokeswoman said.

Goldman Sachs managed $2.31 trillion as of June 30.

In terms of where employees will work in company offices, Casey Quirk's Mr. Itah said the majority of managers the firm has spoken with since the COVID-19 pandemic began aren't reducing their office space because they don't need to from a cost perspective.

"Cutbacks in real estate won't be a significant source of cost reduction for most managers," Mr. Itah said, adding that while some managers may "move people around," most managers will not be closing or moving their offices.

So far, State Street – the parent company of money manager State Street Global Advisors – is one of the few managers that is making a significant reduction of its office space through the closure of two New York offices as part of its transition to a hybrid work model.

"To accommodate our hybrid workforce, we have taken a diligent look at our real estate footprint in NYC and ensuring that our realty needs are in line with where our employees will be working," State Street said in a statement.

Employees who worked in New York offices will have access to a shared workspace in Manhattan as well as in Stamford, Conn., Clifton, N.J., and Princeton, N.J.

As of June 30, State Street had $3.9 trillion in assets under management and assets under custody and/or administration totaled $2.6 trillion.

"Many money management companies are adapting to the new normal," said Laura L. Levesque, associate director of the institutional practice at Cerulli Associates Inc., Boston, in an interview.

"After the COVID situation got better earlier this year, there was more flexibility in work arrangements and travel slowly resumed. But with the recent emergence of the delta variant, there is a lot of fear. Managers brought out their plan Bs, adapted and remained pretty flexible regarding work conditions in or out of the office," she added.

"Managers want a sense of normalcy but it may not be a straight line to achieve it," Ms. Levesque said, adding that plan Bs this fall likely will involve more virtual meetings with clients than many managers expected earlier in the year.