Portfolio and Investment
The Libyan Investment Authority (LIA) controls assets worth approximately US$67 billion.
These assets were last valued in December 2012. Since then, their value has, by some estimates, increased, and we are currently preparing an updated audit.
Around half are investments in funds and portfolios belonging to the Libyan Foreign Investment Company (LAFICO), the Libyan African Investment Portfolio (LAP), the Long Term Portfolio (LTP), the Oilinvest Group and the Libyan Local Investment & Development Fund (LLIDF).
The remaining assets are held as investments in cash, fixed income and equities internationally, and as bank deposits.
A NEW INVESTMENT APPROACH
The former regime left many challenges in its wake. The Libyan Investment Authority is resolved to address these challenges.
A comprehensive study, conducted alongside international management consultants has established a clear picture of the current state of the institution. The Board now intends to embark on a transformation program to strengthen the LIA, enhance its corporate governance in accordance with best practices, and enable it to invest wisely for the future.
The requirements of the new strategy must be supported by appropriate legislation and work is under way to review Law 13 of 2010, which underpins and regulates the operations of the LIA in order to enshrine the new strategy in law.
In line with the proposed new structure of the LIA, all new investment activities will be carried out through specific funds. Each investment must be attached to a clear purpose that guides each fund’s governance, strategy and investment approach. This will allow for the efficient management of assets and effectively contribute to the sustainable development and diversification of sources of income.
The funds currently envisaged, pending appropriate discussions, are:
Future Generations Fund
Seeded by liquid assets, the fund will receive a fixed annual share of Libya’s oil proceeds to protect and grow it for future generations. Once established, the fund will only invest internationally and outside the oil and gas sector, taking a sustainable, long-term view that is independent of political cycles.
Investments will not be made directly but only through best-in-class international fund managers, as identified by leading investment consultants and recommended to the Investment Committee for subsequent approval by the Board of Directors and Board of Trustees.
LIA’s investment approach will no longer be based on the decisions of individuals, as was the case in the past.
Budget Stabilization Fund
The fund will provide stability for Libya against volatile oil revenues and government budget shortfalls. Once approved, this fund will receive surplus funds remaining from annual oil proceeds.
Libyan Local Investment & Development Fund
The fund will develop and diversify Libya’s non-oil economy by investing in and supporting major projects which impact Libyans directly and support growth across all of Libya. The fund will provide an appropriate environment for the growth and participation of the private sector, bringing in foreign expertise and technology through the use of public-private partnerships.
LIA’s current subsidiaries and their holdings will be addressed within the framework of the new strategy, with a more detailed plan to be announced once the review of assets has been completed.