The US$ 66 billion Libyan Investment Authority (LIA) is looking to allocate US$ 11 billion to external fund managers, nearly 17% of total assets. Behind this, is the LIA pressing suits against Societe Generale and Goldman Sachs in London. Fund management companies are analyzing the potential risks of doing business in Libya. However, to be realistic, there will be no shortage of money managers wanting to manage assets and charge fees over an US$ 11 billion pool of money.
What Types of External Managers Will Receive Allocations?
The LIA will seek fund managers with low fees and transparent investment processes. The majority of the allocations will go to fixed income and public equity managers. Smart beta strategies and passive investing are likely mandates the LIA will take out. The LIA are also seeking consultants to assist in the implementation.
The sovereign wealth fund is going under a major restructuring plan, post-Gaddafi. According to LIA Chairman Abdulmagid Breish, more than 50% of LIA’s current assets are in 550 companies that the SWF currently owns.
3 Separate Funds
The LIA is planning to set up three funds with different purposes. This is similar to how several of Africa’s sovereign wealth funds have been setup. There is usually a fiscal stabilization fund, savings fund and a strategic development focused-fund.
Budget Stabilization Fund (Fiscal Stabilization)
Future Generation Fund (Savings)
Local Development Fund (Strategic Development Domestic)