Last July, Toby Nangle wrote an opinion piece for the Financial Times in which he warned that the British pension fund industry was at risk of margins calls on £1.5 trillion of liabilities hedged with so-called Liability Driven Investment trades.
The scenario described in his prescient piece became a reality last week after the British bond market fell into a so-called “doom loop” of margin calls on these LDI derivatives. The turmoil forced the ...