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Opinion: Managing the cashflow squeeze

13 May 2020
Picture of graph on screen showing progress over time

Trustees and sponsors will now have a clear view of the impact of the COVID-19 crisis on their scheme’s funding position. But there’s a potential cashflow squeeze ahead which creates dangers for schemes that aren’t well prepared.

Schemes are facing a squeeze on cashflows from both directions:

Trustees should be addressing these risks now and planning ahead. Otherwise schemes could become forced sellers of assets at depressed prices or face reductions in hedge ratios if they can’t meet LDI collateral calls.

In this short video Nick Evans, our Head of Investment Advisory, discusses this cashflow squeeze and also looks ahead to what market changes mean for LDI strategies.

Please contact us if you would like to discuss further.