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Libyan wealth fund mulls hiring external managers



London: Abdulmagid Breish, the chairman of Libya's $66 billion sovereign wealth fund, said it plans to hire external companies to manage about $11 billion of its assets under a restructuring plan.

The Libyan Investment Authority (LIA), valued at about $66 billion by Deloitte, will split its assets into three distinct funds starting as soon as next year, Breish said in an interview in London on Thursday.

"The LIA is preparing itself to come back to the international fold," he said. "We will use best-of-breed fund managers, advisers and consultants," he said, without specifying which companies will be invited to bid for the work.

The fund, established under former Libyan ruler Muammar Gaddafi, grew to be Africa's second-largest sovereign wealth fund by the time he was deposed and killed in 2011. Some of the firm's investments proved disastrous, leading to attempts to restructure deals, regulatory investigations and multi-billion dollar lawsuits.

The LIA is suing Societe Generale and Goldman Sachs Group in the UK for a total of about $2.5 billion over investments that lost as much as 80 per cent. Both lawsuits were filed in London this year.

Breish said he was considering filing other lawsuits "of a smaller magnitude, perhaps of a similar nature." One potential target is Dutch hedge fund Palladyne International Asset Management, according to Breish. In March, a former employee sued Palladyne in the US alleging the firm laundered funds for Gaddafi.

'Spare no effort'
"We have to get back what's owed back to us, and what was wrongfully taken away," he said. "We will spare no effort and no cost in achieving this objective."

Palladyne's press office declined to immediately comment in an e-mail.

The US Justice Department is investigating whether financial firms, including Goldman Sachs, that sought business from the LIA before addafi's regime was toppled in 2011 made improper payments to secure investments, people familiar with the case have said. The probe grew out of a US Securities and Exchange Commission (SEC) investigation into payments to sovereign wealth funds.

Breish said the LIA has hired law firms and advisers, including forensic accountants at Deloitte, to handle an internal investigation into corruption.

"Whatever the SEC and Department of Justice do will only enhance our own investigation," he said.
Three funds

Breish, a Libyan national, spent nearly 30 years at Arab Banking, rising to deputy chief executive officer, before joining the LIA in 2013.

Under the restructuring, LIA's assets will be divided between three funds. The Future Generation Fund will receive oil revenue. The government can tap into the Budget Stabilisation Fund and the Local
Development Fund will invest in Libyan infrastructure including medical facilities, transport and education, Breish said.

The LIA directly owns about 550 companies, making up about half its assets, Breish said. Some of those will be wound down or sold, while profitable ventures will eventually be added to the Future

Generation Fund.
Breish said the LIA was also overhauling its risk management, decision making, information technology and other internal systems.

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