Pension funds turn to credit to bolster LDI trades
Last month Citigroup began accepting corporate credit from BlackRock and Schroders as collateral for trades in the repurchase — or repo — market to build their defences against future shocks.
Phil Smith, head of Emea LDI research at BlackRock, said: “This is about broadening out the pool of assets that can be used as collateral, increasing that resilience and trying to avoid losses from having to sell assets at times when markets are potentially stressed, spreads are high and transaction costs are high.”
The full article is available at https://www.ft.com/content/e7faae72-4d9d-4286-afba-528d4e49ecfc