Pension schemes prep facilities to ‘repo’ fund units
Schroders, State Street and Cardano plan new way to shore up pension portfolios against repeat of 2022 gilt crisis
Three asset managers are exploring ways to use corporate bond fund units owned by pension schemes as collateral for emergency borrowing, in a bid to avoid a repeat of the 2022 gilt crisis.
Schroders, State Street Global Advisors and Cardano are planning to allow pension scheme clients to pledge the units as collateral for short-term loans from banks. The arrangement – comparable to traditional repo – is designed to help schemes meet margin calls on their leveraged gilt positions in a crisis.
Jerem
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