LDI managers disagree on credit collateralised gilt repo

BlackRock and Schroders execute first trades, but others favour different ways to source liquidity


A change of practice from two asset managers promises to help pension funds weather a repeat of the UK’s gilt crisis in 2022. Some in the industry, though, won’t be following suit.

BlackRock and Schroders last month began to use corporate bonds as margin for pension schemes’ leveraged gilt positions, a step first considered by asset managers last year. The two firms claim the practice could save schemes from having to sell assets rapidly in a stress event in future. 

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