Regulators issue guidance on Liability Driven Investment funds

 On 24 April 2023, the FCA and The Pensions Regulator (TPR) published new guidance on how Liability Driven Investment (LDI) strategies in pooled, leveraged funds should be managed by asset managers and pension schemes. This follows the volatility in the gilt markets in 2022, which resulted in the fire sale of assets by many pension funds in order to maintain their LDI arrangements. The TPR guidance includes a new expectation that a cash (or cash equivalent) buffer of 250 basis points is held, in addition to an operational buffer. 

Download this At a glance briefing for a detailed summary of the guidance and what it means for firms.