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Coronavirus Diligence Briefing

Our briefing for Wednesday March 18, 2020:

Mar 18, 2020 2:58:26 PM

  • In a joint agreement between the United States and Canada, the two countries have confirmed the border between the two countries will soon be closed to all non-essential travel for its citizens. Both sides agreed to preserve the supply chains which ensure that food, fuel, and life-saving medicines will continue to reach people on either side of the border.

  • Also in the United States, President Donald Trump invoked the Defense Production Act to help expand production of hospital masks and other medical supplies to help battle shortages as the US deals with the pandemic.

  • Two hospital ships that help with overseas emergencies are preparing to deploy with one that will dock off the coast of New York City, which Governor Andrew Cuomo noted could soon run out of hospital beds.

  • In Canada, Prime Minster Justin Trudeau announced a $82B stimulus package and concessions to support the economy during the coronavirus pandemic. The package includes money to help Canadian citizens, businesses given a temporary wage subsidy for up to three months to allow workers to stay on the payroll, and taxpayers having until August 2020 to pay their taxes.

  • In the United Kingdom, the pound dropped five percent against the dollar to levels not seen since the 1980’s. Prime Minister Boris Johnson, along with his education secretary, noted all schools will close from Friday until further notice. Exemptions will be made to children of key workers and the most vulnerable. The PM is also ruling nothing out when it comes to stricter measures for London and for travel.

  • United Arab Emirates’ attorney general made clear anyone arriving in the country that does not quarantine themselves for 14 days could face legal action. Emiratis and expatriates caught leaving their home and risking contact with others would be prosecuted. Starting Thursday, the UAE will close entries to tourists arriving. Diplomats are exempt.

  • Australia’s Prime Minster Scott Morrison declared a “human biosecurity emergency”, which gives the government the power to close off cities or regions, impose curfews and order people to quarantine, if deemed necessary.

  • The government also raised its travel advice to an unprecedented Level 4, which means no travel to any country in the world, while banning any non-essential indoor gatherings of more than 100 people.

Coronavirus – Due Diligence And Asset Management

Seven Ways the Effects of the Coronavirus Will Impact the Hedge Fund Industry

Brief: The changing landscape caused by the Coronavirus will lead to the largest shake out in the hedge fund industry since the 2008 market crash. Below are some of the ways we believe the Coronavirus will impact the hedge fund industry.

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CFTC Issues Second Wave of Relief to Market Participants in Response to Covid-19

Brief: The Commodity Futures Trading Commission's Division of Market Oversight (DMO) has issued three no-action letters providing temporary, targeted relief to swap execution facilities (SEFs) and certain designated contract markets (DCMs) in response to the COVID-19 (coronavirus) pandemic. The spread of coronavirus has caused compliance with certain CFTC requirements to be particularly challenging or impossible because of displacement of personnel from normal business sites due to social distancing and other measures.

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Janus Henderson and Kames Suspend Property Funds as Covid-19 Takes Toll

Brief: Janus Henderson has suspended its £2bn (€2.19bn)UK Propertyfund, becoming the second such mandate to be gated over uncertainty of the valuation of its holdings as Coronavirus takes its toll. It comes after Kames Capital suspended its £501m (€548m)Property Incomefund and its feeder funds yesterday citing ‘difficult market conditions’ on the face of the pandemic. Both the Janus Henderson and Kames funds have the same independent property valuer, CBRE.

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Financial Agencies Urged to Halt All Non-COVID Rulemakings

Brief: A top Senate Democrat is calling for federal financial regulators to shelve all their rulemaking projects that aren't directly related to the COVID-19 pandemic, saying their attentions right now need to be on protecting the financial system and mitigating economic fallout from the outbreak. In a letter dated Tuesday, the Senate Banking Committee's ranking member Sherrod Brown, D-Ohio, urged the Federal Reserve Board to halt its pre-existing rulemaking work and "instead focus and prioritize actions on activities related to the economic risks posed to markets" by the novel coronavirus.

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Billionaire Activist Investor Bill Ackman Calls on Trump to ‘Shut Down’ the U.S. for the Next 30 Days

Brief: Billionaire activist investor Bill Ackman, the CEO of $11 billion Pershing Square Capital, called on President Trump to shut the U.S. down for the next month to save lives as the coronavirus (COVID-19) spreads.  “Mr. President, the only answer is to shut down the country for the next 30 days and close the borders. Tell All Americans that you are putting us on an extended Spring Break at home with family. Keep only essential services open. The government pays wages until we reopen,” Ackman Tweeted. 

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Goldman Tells Most Staff in Americas, EMEA to Work from Home

Brief: Goldman Sachs (GS.N) said it has instructed most of its staff in the Americas, Europe, the Middle East and Africa to work from home from Wednesday until further notice, according to an internal notice the bank posted on its website late on Tuesday. The announcement comes after the bank said two employees at one of its Salt Lake City, Utah, office buildings tested positive for COVID-19 on Monday. 

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Contact Castle Hall to discuss due diligence

Castle Hall has a range of due diligence solutions to support asset owners and managers as our industry collectively faces unheralded challenges. This is not a time for "gotcha" due diligence - rather this is a time where investors and asset managers can and should work together to share best practices and protect assets. Please contact us if you'd like to discuss any aspect of how coronavirus may impact your business.

Topics:Coronaviruscovid-19