Committee hears from industry on liability-driven investment
The Industry and Regulators Committee will hold a session with the Chief Executive and Chair of Legal & General (L&G), one of the UK’s largest investment managers, on the use of liability-driven investment (LDI) strategies by defined benefit pension schemes following their role in recent market turbulence. L&G are one of the biggest providers of LDI funds to UK defined benefit pension schemes. The Committee will be questioning L&G on their role in the increasing prominence of LDI strategies and the recent market issues faced by the sector. The Committee will also ask how L&G is regulated in relation to LDI and consider what solutions are needed to avoid a repeat of recent events.
Meeting details
At 10:30am: Oral evidence
Work
The use of LDI by pension funds (Non-inquiry session)
Chair at Legal and General
Chief Executive at Legal and General
Possible questions include:
- What changes will L&G make to its and operation of LDI funds, particularly those that involve significant leverage?
- Do regulators have a good level of oversight of the investment strategies used by asset managers, particularly in relation to LDI funds?
- Who holds responsibility for overseeing systemic risks in the pensions sector? Do the relevant regulators work closely together to ensure that nothing falls between the cracks?
- What actions should be taken to avoid a repeat of recent turbulence in the gilt market due to LDI exposures?