About

I worked as a fund manager/ analyst for 25 years until May 2022. I started in Fixed Income and Currency, but most recently led an award-winning Global Asset Allocation investment team of 26 professionals, based across four time-zones, managing c$160bn AuM for a range of institutional and retail clients at Columbia Threadneedle Investments. You can find my LinkedIn profile here. On Twitter I am @toby_n. On Mastadon I am @tobyn@econtwitter.net.

While stuff I post may look quite worky, this is actually a non-work blog. I’m that nerdy.

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If you’re here for an archive of all the UK pensions/ LDI posts, here you go:

• 13 Oct 22: piece for FT Alphaville discussing why the doom loop is operational, but how there are features in place that could lead to demand for gilts from DB schemes.
• Here’s a chat I had with Joe Weisenthal and Tracy Alloway on their great Bloomberg podcast Oddlots getting geeky about the mechanisms etc. The link might be paywalled, but you can listen free wherever you get your podcasts. I also contributed to less technical audio pieces for Radio 4‘s The Briefing Room and NPR‘s Planet Money here and here.
• 30 Sept 2022: piece for FT Alphaville explaining that the Bank of England had not bailed out managers or pension funds with their interventions, but had likely created large winners and losers; the Bank intervened to preserve the bond market. The piece goes into pooled fund develeraging events.
• 28 Sept 2022: blog on this site doing a basic explainer about what (leveraged) LDI is and how it works.
• 28 Sept 2022: piece for FT Alphaville in September 2022 explaining what the Bank of England was doing in its intervention, breaking the LDI doom-loop.
• 21 July 2022: opinion piece in the FT about the collateral call facing UK defined benefit pension schemes after the rise in bond yields in H1 2022 – explaining why it was exposed, etc.
• 20 April 2017: Matt Tickle (a partner at Barnett Waddingham – and Investment Consultant) and I wrote on VoxEU all the way back in 2017 looking at shadow borrowing from defined benefit pension schemes. It sort of asks whether we can think about unfunded DB scheme deficits as long-term ‘funding’ given the UK fixed income and banking market structure. So it’s not strictly speaking on LDI, but it sort of is.
• 11 March 2016: longish blog on this site discussing the history and rationale for LDI, before exploring whether it made sense to ever *not* do LDI. My angle was basically that from a practical perspective there was insufficient UK rate duration in physical instruments to do this collectively, but that there was for schemes to do this individually. And this was problematic.

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Here are some links to stuff I’ve written that is not on this blog:

Stuff I’ve suggested and the government has done:

• That HM Treasury sweep the positive carry from BoE QE back to prevent the over-statement of the fiscal deficit, hence reducing it by c.£9bn a year (in late 2012). Nicely covered by The Times (pay-walled), and FTAV here. (To be fair, they swept all coupons rather than just positive carry, meaning that there will be payments flowing from HMT back to BoE if the QE assets are held to maturity.)
• Suggesting that HM Treasury call the War Loan, to deliver a c.£300m present value debt reduction in October 2014.

Stuff I’ve suggested but the government hasn’t done:

• Neville Hill and I suggested a change to fiscal rules that would remove from them pro-cyclicality in Alphaville by linking understanding of debt sustainability to debt service costs (in November 2019). The piece went out shortly after a major report from the Resolution Foundation that included a similar line of argument, amidst a more comprehensive framework (government net worth targets etc) which all UK political parties adopted.
• Solve the UK pension crisis by funding the unfunded public sector pension schemes with tradable inflation-linked gilts so as to strengthen the public-sector employee claim, reversing a market distortion that I believed was killing the private sector defined benefit pension, and deepen capital markets. (I think that this idea might be passed its sell-by date as the public-sector union support may have shut down as they have seen their claims cut already, and pretty much all the remaining large private sector defined benefit pension schemes have closed.)

Stuff about economics/ markets

• FT Alphaville piece in October 2022 discussing why the pensions LDI doom loop is operational (rather than linked to solvency), and how there are features in place that could lead to demand for gilts from DB schemes.
• Ed Conway had me on Sky News chatting super-quickly about why the bond market might matter to ordinary people in this report in October 2022.
• I love NPR’s Planet Money podcast series so was psyched to chat with Mary Childs and Alexi Horowitz-Ghazi on this show covering the UK’s Financial miniCrisis™.
• Here’s a chat I had with Joe Weisenthal and Tracy Alloway on their great Bloomberg podcast Oddlots getting geeky about the mechanisms etc. The link might be paywalled, but you can listen free wherever you get your podcasts.
• *Another* piece for FT Alphaville in September 2022 explaining that the Bank of England had not bailed out managers or pension funds with their interventions, but had likely created large winners and losers; the Bank intervened to preserve the bond market.
• David Aaronovitch did a nice Briefing Room BBC Radio 4 programme on the Kwarteng Fiscal Event and subsequent Bank of England intervention in September 2022, and kindly had me involved here.
• A piece for FT Alphaville in September 2022 explaining what the Bank of England was doing in its intervention, breaking the LDI doom-loop.
• Ben Chu did a package on the Kwarteng Fiscal Event and market reaction for BBC Newsnight, and kindly involved me here.
• An opinion column in the FT in September 2022 about the market reaction to Chancellor Kwarteng’s Budget Fiscal Statement.
• A quick blog for FT Alphaville in July 2022 looking at the shortfall at the Bank of England’s Asset Purchase Fund Facility, and asking what this might mean politically given the Conservative leadership election.
• An opinion column in the FT in July 2022 about the collateral call facing UK defined benefit pension schemes engaged in levered-LDI after the rise in bond yields in H1 2022.
• A piece that Tony Yates and I wrote for FT Alphaville in June 2022 criticising the NIESR and NEF proposals to change Bank of England monetary policy operations aimed at reducing the fiscal costs attached to QE in a higher rate environment. The wonderful people on Radio Four‘s More or Less talked to me about this and the resulting programme can be found here.
• Neville Hill and I wrote this opinion piece for FT Alphaville arguing that the UK should adapt its fiscal rules to account for signals from the bond market. This was a short-form version of a longer piece that was a finalist in the Society of Professional Economists’ 2019/20 Rybczynski Prize which can be found on this site here.
• Another piece that Tony Yates and I wrote, this time for VoxEU in October 2017 examining the Bank of Japan’s ETF purchase programme, estimating market impact.
• A comment piece in the FT in June 2017 about how investors have done well by investing in inflation-linked bonds because we have experienced disinflation.
• A piece that Matt Tickle and I wrote on VoxEU in 2017 examining a previously undiscussed transmission channel for QE in the UK: shadow borrowing from defined benefit pension schemes.
• A submission made to the UK Parliamentary Treasury Select Committee on post-2008 monetary policy in early 2017.
• David Aaronovitch did a nice Briefing Room Radio 4 programme on QE in September 2016, and kindly had me involved here.
• A piece on How money works that I wrote up for colleagues and clients, which was generously examined by The Economist in June 2016 here.
• A blog on FT Alphaville about labour power, productivity and robots in 2016.
• A piece I wrote on VoxEU in May 2015 arguing that the natural rate of interest is determined by labour power. An extended and slightly more developed version won the Society of Professional Economists’ 2015/16 Rybczynski Prize, here. And probably the most succinct and least geeky version that I wrote for Juncture in 2016, here.
• My MPhil dissertation that I wrote about the political economy of the Southern Cone currency and debt crisis of 1998-2002. I’d managed the EM bond portfolios at my old firm during the latter half of this period (I wrote this piece on a brief sabbatical), and this is pretty much a practitioner’s perspective, informed by a bunch of anonymous policymaker and practitioner interviews, a whole lot of reading, and the supervision of Michael Kuczynski.
• If you want to see my professional views on my old employer’s website, have a look here and here. There is usually one or two things a quarter, plus videos of the investment outlook, fund reviews etc.

Finally, not content with one non-work blog, my Ello is here. This has little blogs that I used to write from time to time on tube journeys home.

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