2019 and 2020 were torrid times for businesses across the world as the coronavirus pandemic took hold.
Many companies had to put staff on furlough, shut their doors and nervously sit and wait whilst their incomes dried up and balance sheets took a hammering.
To put it into context, Britain’s economy experienced its biggest annual decline in 300 years in 2020 amid the fallout from the coronavirus pandemic
Fortunately, it seems that in the UK at least, that there may be light at the end of the tunnel and that business can gradually start to get back to normal, but it will be a long haul.
Businesses are reporting an ongoing surge in demand as the economy reopens, led by the hospitality sector, meaning the second quarter of 2020 looks to have seen economic growth rebound very sharply.
Whenever there is a crisis—be it war, pandemic, or financial meltdown—the demand for innovation and increased productivity intensifies.
During these periods, the processes of change and innovation tends to accelerate.
We’re in one of those periods right now. COVID-19 has forced businesses to hit the change accelerator to ensure their business model works in the current climate to deliver growth and on target shareholder returns.
Businesses are already picking themselves up off the floor and embracing the opportunities each presents to invest and build for the future.
At the beginning of the year, the consensus among economists was that activity would not return to its pre-pandemic peak until the third quarter of 2022, with the UK lagging behind its peers.
However, more recent business surveys suggest that the recovery is far more rapid and will be reached at least a year sooner, partly due to the successful rollout of the Covid vaccines and the reduction in Brexit uncertainty.
An astute time to invest
With share prices of many businesses much lower than before covid struck, there is a real opportunity for fund managers to exploit the current market conditions and get excellent value for money for their clients.
Fund managers will need to work extra hard to understand how the pandemic has changed established profitable businesses.
There may have been a major shift towards online sales, meaning additional IT costs but less need for high street premises, so the balance sheet and profit and loss forecasts may look radically different to those just 18 months earlier.
Investors can benefit from specialist, innovative investment strategies which seek to maximise returns to investors over the long-term.
By using a fund manager with an excellent track record and the ability to spot new opportunities in a range of markets, consumers will be able to invest in businesses that can achieve above average returns on capital, based on some of the latest post covid business models.
The last couple of years have been testing for investors but the outlook now looks increasingly positive with many opportunities for better growth for those using a fund manager who is switched on and understands the markets as they stand today.