Libyan Investment Authority (LIA) Definition

What Is the Libyan Investment Authority (LIA)?

The Libyan Investment Authority (LIA) is a government-controlled entity that manages Libya's sovereign wealth fund (SWF). The LIA's goal is to achieve investment returns to provide for future generations by investing revenues derived from Libya's oil reserves.

The LIA was established in 2006 and has more than $67 billion in assets. Its investment portfolio spans a number of asset classes, including real estate. Investment activity was suspended because of the ongoing internal conflicts and economic sanctions placed on Libya, which the country has fought to overturn.

Key Takeaways

  • The Libyan Investment Authority is Libya's sovereign wealth fund
  • The fund administers and invests revenues from the nation's oil reserves.
  • The LIA aims to diversify the Libyan economy and invest in the nation's future.
  • The Authority has been thwarted in its aims by years of war, political turmoil, and international sanctions.

Understanding the Libyan Investment Authority (LIA)

The Libyan Investment Authority was established by government decree in August 2006 after international economic sanctions that precluded foreign investment in Libya were lifted. According to the fund's website, it is considered the largest SWF in Africa. As noted above, the fund has $67 billion in net assets and is the largest fund of its kind in Africa.

The goals of the Libyan Investment Authority are to make investments that are derived from Libya's oil reserve revenue. This money is invested and is used to preserve capital and generate returns for future generations. It aims to achieve these goals by ensuring stability against volatile oil prices and shortfalls in the federal government's budget while developing and diversifying the national economy.

LIA investments span a variety of sectors and asset classes, including (but not limited to):

Financial services  Agriculture  Oil and gas Real estate 
Hospitality  Transportation  Technology Media and communications 
Consulting  Automobiles  Entertainment  Chemicals 
Source: Libyan Investment Authority

Special Considerations

Libya went through a grueling period of war and upheaval beginning in the NATO- and U.S.-supported Libyan Revolution of 2011. The conflict culminated with the capture and torture-murder of its long-reigning autocratic leader, Muammar Gaddafi. Gaddafi's removal and death subsequently led to chaos and ongoing civil war. Since 2014, the nation was wracked by conflicts among several rival factions seeking control of Libya.

The LIA underwent a period of suspension due to the conflicts arising from the Libyan Civil War, and many of its assets remained frozen by international sanctions for years. At one point, two rival management teams claimed ownership of the Libyan Investment Authority. In 2016, a five-member caretaker committee that included representatives from two of the factions had control of the LIA.

The head of the fund continues to appeal to the United Nations (UN) Security Council to loosen restrictions so it can invest some of the cash in its reserves. The council hasn't moved on granting an exemption on the sanctions and doesn't plan on doing so until there's proof of a stable government.

Several creditors, including Tunisia's Siba Plast and Al-Kharafi Group of Kuwait, sued the LIA in an attempt to seize assets that were frozen as a result of the suspension. France's highest court issued rulings against the seizures as the assets were non-transferable and could not be subject to seizures.

The Libyan Investment Authority also manages the Economic and Social Development Fund, which is designed to benefit Libya’s low-income citizens.

Structure of the Libyan Investment Authority (LIA)

The vast majority of LIA assets are managed outside of Libya, although a portion is reserved for domestic investment through its Internal Investment Development Fund. Since the Libyan Investment Authority is a government entity, it answers to the Libyan prime minister and is managed under governance processes. The LIA is governed by a board of trustees that consists of a mix of government officials and Libyan banking experts.

Article Sources
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