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THE CORONAVIRUS: Impact on business and markets

FEG is actively monitoring the global spread of novel Coronavirus (COVID-19), and its potential impact on the markets and our business operations. Our priority is the safety of employees, our clients, and business partners, as well as ensuring we provide continuous service to our clients.  

Below please find FEG commentary, business resources, and a quick update on our business procedures.

Impact on Markets 

The past weeks saw the fastest decline into a bear market, a dramatic increase in market volatility, falling interest rates, and plummeting oil prices. We continue to provide our insights as they develop and are constantly evaluating economic and market conditions. To that end, below are our three most recent articles related to COVID-19. The full list of our commentary is at the bottom of the page. 

 

Business Resources for COVID

LEGISLATIVE CHANGES AND ECONOMIC SUPPORT

 

ENTERPRISE RISK CONSIDERATIONS

  • Questions to ask of your board
    • Has there been any change to the organization's mission/objectives/financial condition that would require a revision of the investment goals?
    • Has there been any change to the way in  which the portfolio supports the organization?  
    • Are there non-market external or internal factors that created changes in the investment objectives? 
    • Is the current asset allocation aligned with the risk profile of the organization?
    • Are there any material cash in/outflows (beyond what had been planned) projected within the next 24 months?
  • Contact Your Lender/Banker
    • With expected decrease in cash flows and lower asset balances, are debt covenants at risk? Can your institution benefit from loans through the CARES Act? Your lender or banker may be able to help.
  • Cash  Flow Uncertainty
    • Many institutions face uncertain cash flows at the enterprise level. Does this uncertainty suggest a change in asset allocation be considered, or that “normal” rebalancing may not be appropriate at the current time? Your consultant can help you assess your institution’s situation.
  • Spending Rates/Policies
    • Dollars available for spending are likely to decline. The rate of decline will depend on your spending policy. It may be time to update your spending model and reassess if changes may be needed. Your consultant can help.
  • What Nonprofit board members should be doing right now (Boardsource)
  • Donor Engagement:Below are several strategies and ways to engage individual donors and giving organizations adapted from a Dallas Morning News story (click here for full article):
    • Encourage donors to make monthly or sustaining gifts to provide long-range support.
    • Take the long view on your endowed assets, despite current market performance. Pulling back on giving could have dire consequences for our community.
    • If you are an organizational funder, such as a foundation or corporation, convert existing grants to general operating support to give nonprofit partners the flexibility they need in this moment.
    • Mobilize new funding, suspend burdensome application processes, and make new general operating gifts to your most trusted partners.

 

INSTITUTIONAL SEGMENTS

 

INFORMATION ON THE VIRUS


 

FEG Business Continuity

The risks posed by the COVID-19 outbreak, most importantly the potential for loss of life on top of the economic consequences, require a thoughtful approach to managing our firm and our engagement with clients.

On March 22, the Governor of Ohio (our headquarters), issued a stay-at-home order. Our business will remain open with all employees working remotely and available to help clients via phone, email, and video conference.

“We understand this is a time full of anxiety and uncertainty,” said Becky Wood, CEO.  “Our thoughts are with everyone affected by COVID-19, and we hope that everyone will be safe.  We are grateful that FEG’s preparedness through our business continuity plan allows our team to be safe while working proactively on behalf of our clients.” 

Additionally, we are postponing the FEG 2020 Dallas Investment Symposium which was scheduled for May 12. We will reach out to clients with updates on FEG’s future plans to provide this educational content in the coming weeks.

If you have any questions, please reach out to your primary FEG contact or email us here.

 

Please note: Third-party links and COVID-19 resources provided above are for informational purposes only and should not be construed as a recommendation or advise by FEG. This information is in no way a solicitation or offer to sell securities or investment advisory services. Clicking on external links means you will be leaving this Web site and you assume total responsibility and risk for your use of the site(s) you are visiting.

FEG News & Media Contacts

Sarah Wessling-Web 2.4.19-1

Sarah Wessling

Manager of Marketing

Strategic Communications

513.719.5088