BlackRock executive defends pensions strategy that fuelled UK crisis
A top BlackRock executive defended an investing strategy that has plunged UK pension funds into crisis, blaming “turbulence induced by policy decisions” for the disruption.
Mark Wiedman, head of international and corporate strategy at BlackRock, said so-called liability-driven investing was going though “adolescent pains” after the UK mini-Budget last week.
A sell-off in the gilts market sparked by Kwasi Kwarteng’s tax cuts brought pensions funds to the brink of default because of LDI strategies that include the use of derivatives.
He said that BlackRock had higher levels of capital reserves than many of its peers, which “for a long time seemed too big”. An important question now, he added, is how much capital asset managers have allocated for covering margin.
This story originally appeared on: Financial Times - Author:Harriet Agnew
