LDI crisis highlights leverage risk for Asian asset owners

The controversy in the UK surrounding liability driven investing (LDI) should not overshadow the genuine uses to which the strategy can be put. But there are lessons for Asia Pacific institutions, according to experts spoken to by AsianInvestor. The UK government bond (gilt) market came under severe pressure when gilt yields spiked upwards following the government’s disastrous ‘mini budget’ on 23 September. A lack of liquidity pushed yields up so sharply that the gilt market becam…