Investment - Articles - LGIM Clears Interest Rate Swaps in Pooled LDI Range

 Legal & General Investment Management is pleased to announce that its 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 £187 billion 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,” said 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.”

 
 LGIM is continuing to work with industry bodies and other parties to provide the best solutions for clients.
 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.

 
 Simon Thompson, Chief Operating Officer, commented that, “Matching Plus was launched to provide clients with affordable risk-aware hedging solutions, but we also designed the structure with an eye to meeting future changes in regulation. By enabling these funds to centrally clear OTC derivatives ahead of the regulation, we can help our clients meet their fiduciary responsibilities and ultimately help them provide better protection to their scheme members.”