Why the COVID crisis is consumer crisis

There are many differences between the 2008 financial crisis and the 2020 COVID-19 induced economic crisis, not the least of which is how the policy makers have responded. In 2008 the bailout of the banks was the focus, and in 2020 the bailout of the consumer was the focus. So why have governments been focusing on the consumer, and what does that mean for investment opportunities? Is this a long-term thematic that investors should be navigating in their investment allocations?[vc_quotes layout=”accordion” 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title=”Moderator” el_class=””][vc_empty_space height=”10px”]

Key takeaways

Will

• This is a very weird crisis due to the level of government support being thrown at consumers.
• Consumer risk transfer from banks to asset managers will continue into the future.
• We believe there is still a demand for quality real estate offices in the future however retail will be challenged. Offices will not go away but it is an opportunity to upgrade and reconsider what type of space is needed.
• All private asset markets have their own cycles. The real challenge is to find a market that is not commoditised.

Peter

• The S of ESG is increasing in importance.
• China was strong before the pandemic and even stronger now.
• Physical due diligence is likely to return as soon as possible.
• The extent of de-urbanisation is possibly overstated.

Matt

• We are all in the same COVID storm but we are in two very different boats in terms of how people have been impacted. Young people, those with children and the self-employed are particularly vulnerable.
• There have been many habitual shifts during COVID – Cash usage in the UK has been down c. 60%, and non-cash payment methods are likely to continue in the future. The buy now pay later trend has been greatly accelerated during COVID. There has also been a big shift to supporting local businesses, to investing in one’s home and spending on hobbies.
• Retail has hardship but also pockets of huge opportunity.

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Unanswered questions and answers

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