Spring 2023 Investor Agenda

Welcome to our Spring Edition of Investor Agenda.

After a tumultuous final quarter of 2022 for many pension schemes, trustees’ investment agendas are starting to return to a more business as usual state. However, the effects of the LDI crisis continue to be felt and many schemes have a renewed focus on liquidity in their portfolios.

As schemes focus on liquidity opportunities, some trustees will be considering whether they can realise liquidity from the sale of some of their most illiquid investments, including closed-ended limited partnerships. In this edition, we explore this opportunity for trustees and comment on the key things for trustees to consider, the process and documents involved and potential tax considerations.

Many schemes will also be looking at the terms of their derivative contracts, and assets available for collateral under those contracts, following the LDI crisis to understand what steps they can take now to reduce their liquidity risks in the future. In this edition, we explore the extent to which trustees may be able to approach their derivative counterparties to amend the terms of their contracts to address future liquidity issues.

Finally, since the Winter Edition of our Investor Agenda, there has been an update on mandatory clearing for pension schemes and it is now expected that an extension to the exemption for pension schemes will be granted. We comment on this expectation and the impact on pension schemes in this edition, and explore how trustees can navigate clearing with their EU bank counterparties given the extension will only apply under UK regulations and not the equivalent EU regulations.

As always, we welcome your views on our publications and topics you would like to see covered – please do contact me or your usual Linklaters contacts if you would like to provide feedback.