Wall Street flees coronavirus and glimpses its mortality
Gregg Lemkau is having a difficult time in paradise. The co-head of investment banking at Goldman Sachs had come to Hawaii with his wife and four kids for a family vacation. Then the coronavirus spread. So the Lemkaus decided to stick around rather than return to New York.
From his island retreat, Mr Lemkau starts work at 1am each day to keep pace with the folks on Wall Street. The phone and video calls with chief executives thirsting for information and colleagues keen to keep in touch run late into the night. Soon, his children will be following the same topsy-turvy schedule as they begin “distance-learning” with their schools back east.
“Being in Hawaii sounds better than it actually is,” said a sleep-deprived Mr Lemkau, who made himself a target of mockery this week by posting a photo on Twitter of his improvised office, complete with a view of a sun-kissed Hawaiian dune. (“God’s work knows no time zones,” wrote Eric Weiss, the founder of a blockchain company. Mr Lemkau’s sister, Holly, offered to send candles and launched the hashtag #helpBrotherGregg).
Wall Street is in lockdown. Like Mr Lemkau, many of its troops have taken flight from their natural habitat in Manhattan to ride out the pandemic in second homes and vacation properties in Southampton, Palm Beach, the Hudson River Valley and other fashionable locales.
What has resulted is a clash of worlds: the sound of barking dogs and wayward children has become commonplace on conference calls. People who are accustomed to late nights in the office and marathon travel schedules are now spending unusual amounts of time with that unfamiliar group of people known as their families.
“You wake up, you have a cup of coffee with your family, check your emails and maybe exercise,” said Ori Winitzer, a private equity investor, who has taken refuge with his wife and children in New York’s Dutchess County, some 100 miles north of Wall Street. But for essential business, he added, “The general sense I have is that people are slipping a little into isolation. It takes a little longer for emails to come back. It’s OK if a call gets pushed to the next day, instead of happening at 8:30pm. I personally wonder how many people still set an alarm every day.”
George Muzinich, the veteran bond fund manager, expressed a twinge of guilt that he had been at his weekend home in Palm Beach, when the outbreak gathered pace, and was actually getting on quite well — but for the lack of liquidity in the market. “Life isn’t too bad,” he confessed. “I feel terrible saying that!”
Amid the idyll, there are reminders of mortality: As with the aftermath of the September 11 terror attacks, all calls begin with a discussion of the unfolding tragedy. Everyone, Mr Lemkau and Mr Winitzer included, seems to know someone stricken with the virus — in some cases critically.
“We are trying to stay strong and positive while having to deal with the reality of our own cases of people testing positive,” Mr Lemkau said, noting that it was “more than just a disruption to our business.”
There is also financial mortality. As the markets have shifted in recent weeks, often violently, some hedge funds have buckled, and there is speculation about who is in danger. Of course, fortunes have also been made. Bill Ackman’s Pershing Square Capital said it had booked a $2.6bn profit on a derivatives trade this week after correctly judging days ago that coronavirus “hell” was coming.
For now, the sense among many Wall Streeters that this crisis is not as dire as the one they endured in 2008. In that case, Wall Street was the epicentre, and the threat was existential for financial institutions. This time, Wall Street is yet another industry that is suffering collateral damage and hoping that life — and work — will resume when the outbreak ends.
“The general feeling is that we will bounce back faster than we did after the financial crisis so everyone wants to be ready for that,” said Leon Kalvaria, the chairman of the institutional clients group at Citigroup, who has taken refuge with his family in Southampton.
In the meantime, there is the challenge of working remotely, and a business life now conducted almost entirely by virtual means. For Ros L’Esperance, the global co-head of banking at UBS, who was accustomed to working weekends from her home in Locust Valley, on the north shore of Long Island, the technical set-up was already in place. Her day is a blur of video and conference calls that begins with a 6am check-in with Europe and Asia.
“Being connected with all of the bankers in the division is incredibly important as we need to keep internal communication as seamless as we can with both senior and junior bankers,” she said. Down the hall, two of her adult children are working from their bedrooms, while two younger ones are studying.
“What I love [on zoom calls] is looking at people’s book cases — the amount of John Grisham . . . they have on there. And these are educated people!” one senior banker said of the glimpse he has had into his colleagues’ personal space.
For others, accustomed to the adrenalin rush of Wall Street, the quietude of quarantine is a struggle. “It’s very monotonous. You get up and you read emails and you keep going,” a hedge fund executive said. “Even in ‘08 there was a little bit of excitement. You were watching the news, you were in the middle of it. This is different.”
Eric Schiele, a top corporate lawyer at Kirkland & Ellis, initially hunkered down at his home in Rye, New York, in Westchester County — only to discover there was a cluster of cases in neighbouring New Rochelle. So he and his wife and three kids fled to a remote area on the Georgia-South Carolina border where “social distancing” is the norm.
Mr Schiele has brought his frenetic life with him. “It’s crazy. It’s one call after the other with boards and executives,” he said. “For exercising, I’ve sent pictures of the equipment I have access to down here to my personal trainer and he puts together a training plan for me each week, which is awesome.”
Not everything can be hacked with video technology, clever workarounds or financial resources — even for a Wall Street bigwig. “What has been harder is keeping my six-year-old coming into my office with our three dogs behind him and interrupting a conference call with a CEO or a board of directors,” Mr Schiele acknowledged. Then he reflected: “But the truth is that everyone is going through this.”
Take heart, BrotherGregg.