Such travel was particularly extensive for managers of international funds, who ventured around the world looking for opportunities and checking up on those they'd found.

This habit was so ingrained, and apparently so valued, that fund company PowerPoint presentations frequently included a page mentioning the 150, or 500, or 1,000-plus (yes) in-person meetings with company managements in the past year. Some took place in the fund firm's home office, but the bulk involved taxis, airport lounges, plane flights, and one hotel room after another.

All that changed in March 2020. Therefore, as part of our regular discussions with fund managers, we've been asking them how eliminating travel and in-person meetings with managements has--or has not--affected their ability to run their funds.

At First, Glowing Reviews

During the first few months, the fund managers generally painted a rosy picture. They said they had no problems interacting frequently with their own comanagers and analysts, even though all were working from their own homes. They maintained the regular meeting schedules that had been established before the pandemic. Some managers noted that as frequent travelers, they and their teams already had much experience connecting remotely with each other regardless of their locations.

Similarly, the managers universally said they had no problem keeping track of the companies in their portfolios. Not only were they experiencing no issues getting in touch with executives via phone or Zoom, many said these executives were actually more accessible than usual. They ascribed this partly to the fact that the companies' stock prices were plummeting, making CEOs and other top execs eager--perhaps desperate--for a chance to burnish the image of their companies. In addition, the managers surmised, the company execs were stuck at home with fewer meetings, no travel, no fancy lunches, and no commutes, so they simply had more time available to talk.

Some fund managers, especially those with fairly compact portfolios and low turnover rates, also said the lack of in-person meetings wasn't detrimental because they had visited these companies so often in the past. Nothing was going to happen in a few months that they couldn't learn over the phone.

The general impression was that the pandemic restrictions hadn't affected their ability to evaluate companies or make stock decisions.

One doesn't have to take this at face value. After all, much like the company CEOs they spoke with, the fund managers had an incentive to promote their efficiency in a crisis and downplay any problems in an effort to calm any worried shareholders. (Communications or public relations people from the fund firms usually join these calls as well.) The term "seamless" came up a bit too often.

Yet it's likely that the managers' description was valid for the most part. In particular, the idea that company CEOs were more accessible last spring rings true. Many fund managers reiterated that tendency, and the reasons make sense. A couple went further, saying the executives seemed more relaxed and a bit more forthright talking from their own living rooms or dens rather than in formal meetings in their downtown offices.

On Second Thought …

As the months went by, though, we started hearing a slightly different tone. The fund managers still painted a positive picture overall, but some conceded that they were missing some nuances they only get from in-person meetings. One noted that he sometimes picks up hints of worker satisfaction just from looking around the office and seeing if people are enthusiastic and engaged, or if they look like they're simply going through the motions. An international-fund manager said he misses acquiring subtle cues afforded by experiencing the culture of the country in which the firm operates.

Another drawback mentioned by more than one manager was the difficulty--or in some cases, they said, the impossibility--of training newly hired analysts by remote means. One manager revoked a job offer for that reason. Another said an analyst accepted an offer but then reversed his decision when the pandemic struck and his spouse wanted to move close to her family instead.

Evaluating companies thus became more challenging as the months went by. The familiarity with the firm and its executives, and the unlikelihood that meaningful change had occurred--the thoughts that carried the managers through the first months--began to fade toward the fall and winter. Even some managers who said they still felt completely comfortable about the companies they owned conceded that it was tougher for them to feel fully confident in evaluating and buying a new holding without meeting a company executive in person first.

The Future of Travel

Will travel schedules return to the pre-pandemic level once society is back to some semblance of normal? The truth is nobody knows. However, what seems most likely is that travel will return but not to the level at which it existed before March 2020. And it could take different forms.

One possibility is that company-specific visits will diminish in frequency from their earlier levels but travel to conferences will rebound more robustly. One manager mentioned that's what he missed the most--the chance to meet with 10 or 15 companies on the sidelines of a two- or three-day industry conference. He found that to be a time-saving and cost-effective way to learn about newer or smaller companies, or firms that had been on his radar for a while but in which he wouldn't feel comfortable investing without meeting in person with someone from the firm.

Managers might also be more likely to combine more visits into one longer trip and thus make just a few per year rather than being constantly on the road. That would give them the benefit of the face-to-face meetings they feel necessary while also incorporating what many managers and analysts mentioned as one of the main benefits of 2020's stay-at-home measures--added time for research and thought.

And some managers might decide that all that travel really was a waste of time and restrict future visits to a minimum. In addition, there's the likelihood that in some cases the fund companies--not the managers or analysts--will be making such decisions. A few firms have already said they plan to reduce travel in the future. For example, at a Goldman Sachs Financial Services conference in December, BlackRock CFO Gary Shedlin said, "I don't think we'll ever get back to those same historical levels" of spending on travel and related activities … "right now, we're repurposing those dollars."

All told, one thing is almost certain: Fund managers' travel habits will not simply return to the exact status quo ante. Things rarely do after a prolonged crisis. There's no reason to think this time will be different.