Publications
Publications
- June 2025
- HBS Case Collection
TfL Pension Fund and the 2022 Gilt Market Crisis
By: Emil N. Siriwardane, Vincent Dessain, Emer Moloney and Carlota Moniz
Abstract
On September 27, 2022, Padmesh Shukla, CIO of the Transport for London (TfL) Pension Fund, was keeping a careful eye on the turmoil in the U.K. sovereign bond (or gilt) market. When the new government announced the largest tax cuts the U.K. had seen in half a century, gilts saw an historic sell-off. Gilt yields soared and many pension funds faced urgent margin calls on their leveraged liability-driven investment (LDI) strategies to maintain collateral. As he watched the crisis unfold, he wondered if it was a reflection of structural flaws in the market or the result of simply short-term panic? While the TfL Pension Fund had a smaller LDI book than its peers, Shukla watched the crisis unfold with interest. Should the TfL Pension Fund act quickly to buy cheap gilts while the window was open, or was it time to rethink the fund’s approach to hedging and risk?
Keywords
Financial Crisis; Macroeconomics; Assets; Asset Management; Borrowing and Debt; Corporate Finance; Capital Markets; Equity; Public Equity; Private Equity; Financial Liquidity; Financial Instruments; Debt Securities; Credit Derivatives and Swaps; Bonds; Stocks; Financial Strategy; Interest Rates; Governance; Governing and Advisory Boards; Crisis Management; Resource Allocation; Investment; Financial Services Industry; United Kingdom; England; London; Europe
Citation
Siriwardane, Emil N., Vincent Dessain, Emer Moloney, and Carlota Moniz. "TfL Pension Fund and the 2022 Gilt Market Crisis." Harvard Business School Case 225-098, June 2025.