CEO Update and Outlook
Dan Chung : The fundamental work is actually kind of the same. The analysts and portfolio managers are always talking to the management teams, but, even more important, talking to the industry environment. This includes their competitors, suppliers, customers and experts. They are trying to get non-consensus insight onto what is happening with companies and industries. And we're, again, very fortunate that a lot of that is easily done remotely. And today, even more so than in the past, because companies can't go to a conference, because they don't want to welcome visitors to their office, as we often like to go travel to them, they're hosting more conference calls with analysts and portfolio managers. That is quite good for us. We have a big team – there's 55 people on the Alger team -- which is actually one of the larger teams, I think, per AUM dollar. It actually allows us to do a lot of these calls and it allows us to be very efficient in covering, if you will, the terrain. The one thing I think I'm directing everybody to make sure they're focused on is on what positive changes are occurring. What is being accelerated, and also the longer term, like what new changes may arise out of this pandemic and its resolution, and what industries and companies might be benefited by it. We're also looking out for the reverse. We're challenging ourselves to make sure that trends that we thought were good growth trends in the past, when the economy recovers, will those still remain good growth trends, or perhaps will this somehow change, either businesses’ or consumers’ perspective on those. There's not much change in the process, but there is of course an adjustment to the nature and context of the current crisis. And that's always unfortunately different. Every crisis has its own characteristics. Brad Neuman : I noticed in a lot of your remarks thus far that you've kind of hinted at this pandemic accelerating, potentially, themes that we may have invested in, or creating new themes, and how that crisis is actually creating changes in the economy and what I'm guessing is opportunities for the investment team. Maybe can you talk a little bit about what some of those themes are that you think may have been accelerated or created as a result of the global pandemic?
Dan Chung : Sure. Well, remote working. Companies everywhere are being forced to try it on a massive scale with all of their employees, something that many had not foreseen. We're all going to be measuring what kind of productivity that we see from this. And some companies may see more productivity than they anticipated. After this is done, we are likely to see more flexible policies about remote working, and we'll see very probably investments in communication platforms, in virtualization software and things like that. Now, as we're doing all this remote working, of course, there are new concerns that arise. Cybersecurity has been one of our themes – a concern for companies and consumers. But now it's proving to be not only more non- discretionary than ever, but it's also having a shift. In particular, cloud-based cybersecurity providers are very well positioned for the needs of enterprises with more and more endpoints, more and more remote workers. I'll particularly note that the traditional security vendors were largely targeted around protecting the hardware, the corporate network, right? The on-premises attacks. Now we're dealing with a very different thing with workers working from their homes and apartments and working on cell phones, as I happen to be right now. The cybersecurity needs and the vendors are different than the traditional ones. Cloud adoption – clearly a big growth trend. But what we're seeing now is just a skyrocketing growth in cloud usage, both consumer and business. And for example, internet usage in Italy's up 90%. Comcast reported internet usage up 32% month to month in March. Verizon is seeing video gaming online up 100% and office connections up 50%. The cloud adoption continues, but also the need for both the platforms, like Microsoft, but also the hardware companies that provide and power the infrastructure to ramp up and meet that demand. We were already fairly excited about the upcoming 5G higher mobile speeds, but that combined with the increased usage today is going to be very big opportunity for a lot of providers in our opinion.
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