Daily exchange with portfolio banks in Eastern Europe and Central Asia
Scott Richards, CFA, FRM, oversees responsAbility’s portfolio of private equity investments in financial institutions across Central Asia and Eastern Europe. Covid-19 find him at his Zurich home, glued to his chair for continuous market analysis or on the phone to portfolio companies.
Working from your Zurich home, what does your day look like?
Surprisinlgy busy: I spend a good part of every day following macroeconomic developments and trying to analyze their potential impact on our portfolio. Given that this is a generational-level crisis, the depth of the economic impact is very hard to predict, but I am closely assessing market reactions and best practice to meet the current challenges.
How do you stay in touch with the companies in your portfolio?
We are in constant contact to discuss operational changes, customer outreach, investor communications, and strategy. As investors, we are well-positioned to share best practices from banks across our global platform to support our investees. I serve on the Supervisory Board for one of our banks and maintain very close contact with the shareholders, Boards, and management teams at all of our portfolio companies. This situation calls for even tighter cooperation to ensure that the banks get the board’s full insight and support for challenging decisions regarding liquidity levels, restructuring loans and communicating with customers and lenders.
Which tasks are first on your list for when the situation returns to normal?
Several of our portfolio companies have planned to raise growth capital in 2020, and in other cases we are looking at exit options. These types of projects require a level of in-depth engagement that is very challenging given the current restrictions on travel and in-person meetings. However, we are working closely with our investee banks to prepare – from preparing data rooms and investor decks to formulating draft transaction documentation – so that these processes can proceed immediately once conditions allow.
“The businesses and communities that our banks serve are now facing a unique cocktail of challenges, and it is critical that in difficult times we remain steadfast partners.”
Has this situation brought any positive surprises?
As our portfolio companies’ management teams are facing headwinds, this is precisely the time for us to step up to support them and to illustrate that we are not simply investors, but valuable partners. Engaging more closely than ever with those teams, even from a distance, has been a tremendous lesson in the importance and power of teamwork and communication – I see the teams coming together to deal with challenges and uncertainty and, ultimately, to take off.
Until then, how do you keep up motivation while working remotely?
I try to stay focused on our ultimate objectives – to be diligent stewards of investor capital and to deliver top-class banking services and credit to micro- and small businesses in emerging markets across the world. The businesses and communities that our banks serve are now facing a unique cocktail of challenges and headwinds, and it is critical that in difficult times we remain steadfast, proactive, and transparent partners with those core clients and communities. And – naturally – a nice cuppa joe in the sunshine on the balcony doesn’t hurt.