Before its assets were frozen in 2011 due to the civil war, LIA made groundbreaking investments across Africa worth about $10billion spanning hotel, real estate, agriculture and energy sectors.
The Libya Investment Authority (LIA), which, is Africa’s largest SWF by AUM (currently valued at $67 billion), had its foreign assets frozen under the UN’s Security Council resolutions No. 1970 of 2011 for the purpose of safeguarding the assets. This was at the request of the Libyan authorities during the revolution in 2011. In 2018, the scope of the freeze was extended to incorporate all interest earned on frozen assets.
Since LIA’s assets were frozen, several attempts have been made by stakeholders to revamp fund operations and have the sanctions eased. These include the appointment of a 5-member interim steering committee in 2016 by the government to oversee the management of the Fund, and an application to the United Nations (U.N.) to modify its current sanctions regime to prevent losses to some of LIA’s investments. The following are some specific notable feats undertaken to restructure the Fund:
- appointed EY as its external auditor, to audit the Fund’s financial statements for the financial year 2019
- LIA launched its Transformation Strategy in 2020 that seeks to reposition the Fund for greater impact by promoting robust governance, disclosure, openness, and accountability standards, as well as ensure pragmatic investment decisions
- LIA concluded the first phase of the transformation program by implementing a strong organizational structure, governance, and compliance frameworks in alignment with the Santiago Principles; to adequately accommodate implementation of the new strategic roadmap.
- Conducted a valuation of all LIA’s assets, portfolios, funds, and affiliated companies for the years 2017, 2018, and 2019.
Meanwhile, the Fund remains embroiled in multiple legal proceedings such as the following:
- In 2019, a ruling by the London Commercial Court ordered the discharge of receiverships over some of LIA’s UK assets.
- In early 2020, the English Commercial Court and Court of Appeal ruled in favor of Ali Mahmoud Hassan Mohamed as chairman, having the authority to represent the Fund. This was followed by his reappointment by the Fund’s Board of Trustees for three (3) more years in November 2020.
- In 2020, a Brussels court ruled that assets amounting to a total of $15 billion USD should remain in the Euroclear banks, under the supervision of the Belgian judiciary; and not to be moved to other accounts.
Why a return to active investing would be good for the continent
There are two main reasons why the LIA’s eventual return to active investing will be good for the continent: first, the LIA has a huge share of the continent’s total SWF asset under management. (more than 50% of the total combined African AUM until end of 2022); Second, aside having one of the largest investable asset base, LIA was also the first African SWF to make a series of major pan-African investments in other African economies until the conflict necessitated the asset freeze. LIA’s investments across Africa are worth about $10billion spanning hotel, real estate, agriculture and energy sectors. It is likely that the LIA still has the largest pan-African portfolio among African SWFs despite the asset freeze.
As such, if and when its assets are eventually unfrozen, the LIA’s return to active investing — especially in the pan-African market — could mean very good news for intra-Africa investing. If it were to sustain its track record and appetite for intra-African investing, the LIA could leverage its multi-billion dollar asset base for domestic reconstruction while further deepening its African footprint, possibly via collaboration with other African SWFs.