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$11 Billion at Stake as External Managers Line Up for Libya

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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.

See Libyan Investment Authority profile

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.

Fund Names:

    Budget Stabilization Fund (Fiscal Stabilization)
    Future Generation Fund (Savings)
    Local Development Fund (Strategic Development Domestic)

Funds and Ownership, KKR Partners with Shinhan Financial

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South Korean financial giant Shinhan Financial Group Co., Ltd. reached a preliminary agreement with KKR & Co. to form a series of global buyout funds that could raise up to 5 trillion KRW. KKR and Shinhan signed a Memorandum of Understanding (MoU) in Seoul in early October. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Norwegian Government Recommends SWF Remains at Central Bank

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There was speculation that Norway Government Pension Fund Global (GPFG) could be managed outside of Norges Bank. The Norwegian government shot down this idea and recommended Norway’s GPFG remain in Norges Bank. This recommendation came in the form of a white paper submitted to the Norwegian Parliament, Stortinget.

Norway’s Minister of Finance Siv Jensen, commented in a press release, “The Government proposes a new and modernised governance structure for Norges Bank. Moving forward, this new structure lays the foundations for the sound management of the central bank and of the GPFG.”

Some Central Bank Recommendations

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Invesco Buys OppenheimerFunds for $5.7 Billion

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Invesco Ltd. signed a deal to acquire OppenheimerFunds, Inc. from Massachusetts Mutual Life Insurance Company (MassMutual). In turn, MassMutual and the OppenheimerFunds employee shareholders will receive a combination of common and preferred equity consideration, and MassMutual will become a significant shareholder in Invesco, with an approximate 15.5% stake. This strategic transaction will bring Invesco’s total assets under management (AUM) to more than US$ 1.2 trillion. The transaction is expected to close in the second quarter of 2019, pending necessary regulatory and other third-party approvals. The transaction gives Invesco access to more third-party distribution platforms.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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