Legal & General Investment Management’s (LGIM) pooled LDI range – the LGIM Matching Plus Funds – has cleared its first interest rate swaps well ahead of clearing becoming compulsory under the new central clearing regulations next year.
LGIM manages GBP187bn in exposure for its LDI clients. The changing regulatory environment for derivatives is a concern for pension schemes who use these markets to hedge their liabilities.
“We know that central clearing is an additional source of stress for pension scheme trustees,” says Simon Thompson, chief operating officer. “We’ve therefore made it a priority to prepare for the new environment as quickly and efficiently as possible. The successful implementation of the operational infrastructure and legal framework to support central clearing means our clients have one less thing to worry about.”
The LGIM Matching Plus range was launched in 2011 and consists of over 40 funds with maturities ranging from 2015 to 2062. These funds use swaps and leveraged gilts to hedge interest rate and inflation risks for pension schemes. The range has been designed to provide schemes with as much flexibility as possible to help them meet their own individual requirements.