2020 was a turbulent year and the investment community has certainly not been spared. We all must learn how to manage through a crisis, and this is also the most profound test of leadership. The quote: “Keep your head when others lose theirs” is a good metaphor for navigating during uncertainty. But COVID-19, in its severity, scope and duration, has challenged us to make good decisions for the long term, while we cope with uncertainty in the short term.
In launching Erigo during this confounding period, we saw an opportunity to distinguish our firm as a highly-selective capital formation boutique that can find the beacons of light in the darkness. We’ve identified a number of positive trends that have emerged from this disruption:
Alternatives are looking more appealing to investment companies that are being whipsawed by stock market volatility and irrationality. “Stability” has become a relative term when judging risk. The global pandemic has amplified the need for Alternatives and the corresponding benefits of non-correlation and downside protection compared with traditional asset classes.
Sectors Ripe for Rebound
There are emerging opportunities to invest in industries that have been hit hard by the pandemic but have the inherent strength to rebound. Real estate, travel, retail and finance—together with healthcare, technology and green businesses—are all in accelerated flux, offering interesting possibilities right now.
An Appetite for Re-evaluation
The global pandemic has scrambled many financial parameters and business principles and resulted in a prime time for reassessment. Understandably, investors and capital managers are reexamining priorities and looking for new and better ways to engage. They’re deepening their analysis, including paying more attention to crisis management, business continuity and downside protection.
Another adage: “We’re all in this together.” A true partnership is built on mutual trust and respect. Our experience has taught us that trust is earned over time through honest communication, managing expectations and delivering value.
Although the investment picture has never been murkier, we think the strategy for our company and our business partners is clear: Be smart, be focused and effectively navigate a disruptive time.