August 31, 2009 / 5:34 PM / 10 years ago

Libya fund eyes European utilities, health stocks

TRIPOLI (Reuters) - Libya’s $65 billion sovereign wealth fund aims to buy into European utilities, drugmakers and other companies with technology that may be useful for the country, the head of the Libyan Investment Authority said.

The fund, which holds around 60 percent of its assets in cash, is in talks to buy stakes in major European companies, LIA chief executive Mohammed Layas told Reuters in an interview.

“We bought utilities and think it’s a promising sector, and pharma as well. We are seeking even to have joint ventures with them in Libya — we need to bring their technology here,” he said. “We still feel Europe is the major partner... Our trade is 90 percent with Europe and that applies to investment.”

The LIA was set up in 2006 to manage Libya’s fast-growing surplus oil revenue and oversee the assets of the Libyan Foreign Investment Company (LAFICO) and Oilinvest.

Funds have been channelled mostly towards investments in European countries, such as Italy, which count among Libya’s biggest trading partners.

The LIA has been snapping up stakes in major Italian companies, which it said were purely long-term financial investments.

It holds a 4.6 percent stake in Italy’s second-biggest bank, UniCredit (CRDI.MI), and came to the bank’s rescue earlier this year by helping plug a shortfall in capital-raising efforts. It has a stake of less than 2 percent in carmaker Fiat.

Layas declined to name specific investments or countries being studied by the LIA.

“Italy has good potential but not all our investment will go to Italy, as is suggested sometimes by the media.”

He said the LIA was looking at commercial opportunities inside Libya and had recently established a joint investment fund with the Libyan Central Bank that would have $20 billion to invest. “There is great potential in the local market. Real estate collapsed except in Libya, and those who invested here made a fortune.”

The local fund’s projects could include foreign companies as major shareholders, Layas said, but would focus on commercial ventures rather than large-scale infrastructure.

“For example, there is a tremendous shortage of health services. You can build hospitals and provide services here and get very good returns.”

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