as its a mat problem try back up and delete these files from UDKGame\Content then running the sdk again it will rebuild all the shaders for stuff that gets loaded (may take some time)
GlobalShaderCache-PC-D3D-SM3.bin
GlobalShaderCache-PC-D3D-SM5.bin
GlobalShaderCache-PC-OpenGL.bin
LocalShaderCache-PC-D3D-SM3.upk
LocalShaderCache-PC-D3D-SM5.upk
LocalShaderCache-PC-OpenGL.upk
RefShaderCache-PC-D3D-SM3.upk
RefShaderCache-PC-D3D-SM5.upk
RefShaderCache-PC-OpenGL.upk