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Analysis & opinionNovember 9 2022

Could the UK pension fund crisis lead to litigation?

Following September’s jump in gilt yields, overleveraged LDI strategies are potentially exposing certain funds to litigation. Analysis by Elaina Bailes and Tom Otter of UK law firm Stewarts.
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Could the UK pension fund crisis lead to litigation?Image: Getty Images

An uncomfortable question is being asked around offices in the City of London at the moment: “Is it all feeling a bit 2008-y to you?” 

It is easy to see why the current economic turmoil echoes the prelude to the 2008 financial crisis: sudden changes to market conditions are beginning to expose issues with investment strategies previously considered safe.

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