From his humble tent in the south of Tripoli, Libya’s currently embattled leader Colonel Muammar al-Qadhafi had under his control at least $210 billion — almost three times the worth of Carlos Slim, the world’s richest man according to Forbes. The United States, Canada and the European Union had, since the Libyan uprising began in mid February until the end of March, frozen approximately $70 billion in assets controlled by Qadhafi, through the Libyan central bank, 18 family members and at least 16 companies and investment vehicles, but the search for additional assets continues.
Executive has scoured data and reports from governments, financial institutions and media outlets around the globe to compile what is perhaps the most comprehensive, publically available listing to date of Libya’s direct foreign asset holdings [see page 50]. Given the sheer enormity of the size and spread of these assets, and the opaque nature of Qadhafi’s secretive investment vehicles, there are likely significant assets unaccounted for in this listing — indeed, it is speculated that the web of investments is so far flung that the Colonel himself cannot account for all his billions.
Weaving the web
Since the lifting of sanctions on Libya in 2004 and the subsequent increase in oil exports and global prices, Qadhafi collected hundreds of billions of dollars in oil revenues, a large part of which were transferred to personal foreign accounts and to a complex web of Libyan sovereign wealth funds. Key individuals identified by Western authorities to be acting on behalf of Qadhafi or at his direction include his wife, Safia, his seven sons, most prominently Saif al-Islam al-Qadhafi, and his only daughter Aisha. Other senior government officials were also targeted by the US sanctions, but their roles are limited to security aspects and do not appear to hold any notable foreign assets.
Libya’s main foreign investment vehicle is the Libyan Investment Authority (LIA), a holding company founded in 2006 to oversee and manage the country’s various investment funds. The authority was created with capital of $40 billion, but is now estimated to hold $70 billion in assets with private investments in real estate, banking, agriculture, infrastructure and oil and gas, in addition to bonds and equity stakes in publicly listed companies around the world.
More than seven investment funds with foreign assets fall under the umbrella of the LIA, with the $8 billion Libyan African Investment Portfolio (LAP), established in 2006, perhaps the most prominent, if not the largest. LAP focuses on direct investments across the African continent, partly through its telecom holding company LAP Green Networks. LAP Green Networks’ portfolio comprises investments in Chad, Niger, Ivory Coast, Nigeria, Rwanda, Sudan, Togo, Uganda and Zambia.
LAP’s other subsidiaries include Libya Oil Holding Company (OiLibya, previously Tamoil Africa), which manages the country’s oil-related investments in Africa, and the Libyan Arab African Investment Company (LAAIC) which manages holdings in virtually every African country and sector ranging from the Rainbow Tourism Group in Zimbabwe to the Democratic Republic of Congo’s Oryx Natural Resources diamond mining company.
Also under the LIA is the Libyan Arab Foreign Investment Company (LAFICO), founded in 1981 and boasting $2 billion in assets as of the end of 2009. LAFICO was the main investment arm of the Libyan government, focused on international equities and fixed income holdings, before the establishment of the LIA.
LAFICO’s regional investments include stakes in United Arab Emirates-based Kingdom Hotel Investments, Jordan’s Arab Potash Company and Bahrain’s First Energy Bank.
At the same time, the LIA oversees the $10 billion Long Term Investment Portfolio (LTIP), which owns several real estate and banking foreign assets. In effect, the holdings of LTIP would be classified under the LIA, similar to foreign holdings by the National Investment Company, so it is difficult to separate the portfolios of every investment fund under the LIA.
In Europe, Libya established Dalia Advisory Limited in 2009 at a property on Upper Brook Street in London — valued at approximately $9.8 million — with the aim of managing Libyan investments in the UK and the rest of Europe. During the same year, LAP reportedly poured hundreds of millions of dollars into a newly-established London-based hedge fund, FM Capital Partners. On the other side of the Atlantic, in a 2010 diplomatic cable released by WikiLeaks, LIA’s Chairman Mohamad Layas spoke to the US ambassador in Tripoli of $32 billion in liquidity held by several American banks, each managing $300-500 million. These amounts have now been reportedly frozen.
On the banking side, the Central Bank of Libya (CBL), which is fully-owned by the Libyan government, held $139 billion in foreign exchange as of the middle of 2010, according to a CBL Director, though it is not clear how much of the foreign exchange assets are physically available in Libya and how much are part of the assets frozen by foreign governments. (For example, the International Monetary Fund reported last month that the CBL had on hand roughly 144 tons of gold, currently worth some $6.5 billion.)
The CBL also holds equity stakes in regional financial institutions, including Bahrain’s Arab Banking Corporation and ALUBAF Arab International Bank, either directly or through its subsidiary, the $2 billion Libyan Foreign Bank.
In addition to Libya’s official investment vehicles, Qadhafi and his family members are estimated to hold several billions of dollars in secret personal accounts.
Speaking to British-based newspaper The Guardian, Professor Tim Niblock, a Libya specialist at the University of Exeter in the UK, said, “The bulk of that wealth is distributed between bank accounts and liquid assets in banks in Dubai, United Arab Emirates and other Gulf states, as well as in the countries of Southeast Asia.”
Despite the variety of Libyan investment fund names, Libya’s known direct assets in more than 60 countries are ultimately all under the control of Qadhafi and his sons. As Western governments push ahead with their military and financial offensive, the coming weeks will likely bring more light to bear on Libyan elite’s secret assets around the world.
