Opaque Libyan fund built diverse portfolio
The Libyan Investment Authority, which analysts’ value at $60bn-$80bn, has accumulated stakes in a diverse range of foreign assets, fromnewspapers and football teams to banks and textiles, Tripoli set up the LIA in 2006, after UN sanctions were lifted in 2004, to diversify the north African country’s dependence on its oil wealth.The LIA has to date made many of its portfolio investments through private equity funds, and used banks in Europe and the US to run its investments while it built up the expertise to do soalone.
With much of the fund’s assets still liquid, Libya has been able to take an opportunistic approach to investments in Europe, the US and beyond.
The LIA holds a stake of 2.5 per centin UniCredit, Italy’s largest bank by assets. This is in addition to the 4.9 per cent in the bank held by the Libyan central bank, bringing Tripoli’s total holding to almost 7.5 per cent.Libya agreed to set up a joint fund consisting of as much as $500m with Mediobanca, a rival Italian bank, to invest in distressed Italian companies.
The Libyans have also been dabbling in“trophy assets” overseas. Last year the LIA bought a 3.01 per cent stake in Pearson, the educational publisher and owner of the Financial Times.
As with most of its rivals in neighbouring GulfStates, Libya has been snapping up property assets overseas, such as 11 Upper Brook Street, an office building in Mayfair, London.
Italy’s push to develop ties with Tripoli has also seenco-operation agreements on aerospace and other projects in the Middle East and Africa with Finmeccanica, the Italian company.
Despite seeing the value of their investments fall in the wake ofthe Libyan protests, Ms Wyman said there was unlikely to be any reason for Libya to sell its international investments in the immediate future, given that it had no immediate need for cash.
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