Systemic risk of strategy alignment caused LDI crisis, committee hears

UK pension funds were ‘like a tuna fish in a paddling pool’ in relation to gilt markets

Jonathan Stapleton
clock • 6 min read
Nangle said the sheer size of scheme LDI positions had unsettled the market
Image:

Nangle said the sheer size of scheme LDI positions had unsettled the market

The systematic risk of pension funds all investing in similar liability-driven investment (LDI) strategies was the cause of last year’s crisis in markets, the Work and Pensions Committee (WPC) has heard.

In the first session of the fourth formal meeting of the WPC's inquiry into defined benefit pensions with LDI - held this morning (1 February) - the committee heard evidence from people including B...

To continue reading this article...

Join Professional Pensions

Become a Professional Pensions Lite Member today

  • Three complimentary articles per month covering the latest real-time news, analysis and opinion from the industry
  • Receive important and breaking news stories via our two daily news alerts
  • Hear from industry experts and other forward-thinking leaders

Are you a trustee, investment consultant or in-house pension and benefit scheme professional? You can apply for full complimentary access here

Join now

 

Already a Professional Pensions
member?

Login

Jonathan Stapleton
Author spotlight

Jonathan Stapleton

View profile
More from Jonathan Stapleton

DB funding improves despite drop in yields

ACA members say low dependency the minimum level for surplus release

More on Investment

Now Pensions makes first private markets investment
Investment

Now Pensions makes first private markets investment

Supports ambition to invest at least 10% of its default fund in private market assets

Holly Roach
Holly Roach
clock 07 July 2025 • 1 min read
Partner Insight: PIMCO Outlook - The fragmentation era
Investment

Partner Insight: PIMCO Outlook - The fragmentation era

With the world order in flux, investors can look to fortify portfolios by diversifying across global markets and capitalising on attractive, high-quality yields.

Richard Clarida, Andrew Balls and Daniel Ivascyn at PIMCO
clock 07 July 2025 • 10 min read
Partner Insight: Managing investment risks in retirement
Investment

Partner Insight: Managing investment risks in retirement

The need to manage investment risks in retirement is more acute now than ever before. Recent stock market volatility and upside inflation risks from tariffs are once again focusing minds on the phenomenon known as sequencing risk.

Trevor Greetham, Head of Multi Asset at Royal London Asset Management
clock 07 July 2025 • 2 min read
Trustpilot