The Libyan Investment Authority, Tripoli, has made recommendations to help parts of its investment portfolio get through the remainder of the coronavirus pandemic.
The sovereign wealth fund, which has $60 billion in assets according to the Sovereign Wealth Fund Institute, recently completed a series of stress and liquidity tests to assess the potential impact of COVID-19 on its portfolio.
Executives at the fund worked with strategic adviser Oliver Wyman and financial adviser Deloitte to conduct a benchmarking analysis. The impact of the coronavirus pandemic on the LIA was compared with that of other sovereign wealth funds, it said in a news release Tuesday.
Following the analysis, the LIA and its advisers then “undertook a comprehensive portfolio liquidity assessment, with the primary intention of better understanding the impact of COVID-19 on its operating subsidiaries,” the release said. This assessment focused in particular on hospitality and oil and gas portfolio companies.
The in-depth assessment identified 18 “priority assets” that needed further liquidity assessments, evaluating the impact of COVID-19 over the short term, to September; over the near term, to December; and over the medium term, to April 2021. This series of studies resulted in “tailored recommendations for each subsidiary as to how best to operate through the remainder of the COVID-19 restrictions,” the LIA said.
Among the recommendations are calls for improvements to working capital, cost reduction, debt restructuring, short-term liquidity management and recapitalization.
“The recommendations detailed in the study are now being implemented by our subsidiary management teams,” Ali Mahmoud Hassan Mohamed, chairman of the LIA, said in the release. “The LIA’s leadership team will closely monitor these actions in the coming months ahead.”
The study and communication of it are part of LIA’s “comprehensive transformation program,” working to bring it in line with best-in-class sovereign wealth funds, the release said.