WHAT IS THE Libyan Investment Authority
The Libyan Investment Authority (LIA) is a government entity that manages the sovereign wealth funds of Libya. The source of the sovereign wealth fund primarily consists of excess oil revenues from Libyan oil reserves. The Libyan Investment Authority also makes local investments through a number of external managers.
BREAKING DOWN Libyan Investment Authority
The Libyan Investment Authority was established by government decree in August 2006 after the end of economic sanctions previously precluding foreign investment in Libya.
The LIA’s primary role is to manage the value of Libya’s oil revenues and diversify its revenue streams as well as its dependence on national income. The LIA is a holding company that manages government investments from the oil and gas industry and other areas of the international finance market.
The LIA oversees the assets of the Libyan Arab Foreign Investment Company, and also manages investment in other areas including real estate, agriculture, shares and bonds, infrastructure and oil and gas. The Libyan Investment Authority is Africa’s largest sovereign wealth fund, and is a member of the International Forum of Sovereign Wealth Funds.
Libyan Investment Authority Structure
As a government entity, the Libyan Investment Authority ultimately answers to the Libyan prime minister, and is managed under strict governance processes. The LIA is governed by a board of trustees that consists of a mix of government officials and Libyan banking experts.
The vast majority of LIA assets are managed outside of Libya, however the Libyan Investment Authority does own a share for the purpose of domestic investment through its Internal Investment Development Fund. In the course of its asset management, the LIA seeks to secure the future of Libyan generations by enhancing financial and economic stability and creating long-term investment prospects.
The LIA also manages the Economic and Social Development Fund (ESDF), which was also established in 2006. The ESDF manages substantial assets in Libya across a number of sectors to benefit Libya’s low-income citizens.
The LIA underwent a period of suspension due to conflicts arising from the Libyan civil war, and many of its assets remained frozen for years due to international sanctions. The civil war lead to the formation of two governments and two rival management teams that both claimed to have ownership of the Libyan Investment Authority. The former LIA chairman stepped down in 2016 due to challenges managing the LIA in a war-torn country. A five-member caretaker committee, including officials from the two factions in conflict, replaced the chairman shortly after he stepped down.