Western managers, Libyan funds: very high fees for no value

Prominent American and European investment funds managed hundreds of millions of dollars in Gaddafi regime assets poorly, charging tens of millions of dollars in fees and producing low returns, according to a document obtained by the advocacy group Global Witness.

The banks appeared to have taken advantage of a Libyan investment fund that was poorly managed and “a mess,” according to a western official.

Libyan Investment Authority officials complained that a $1.7 billion investment they made in six different funds generated returns far below the industry benchmark.

“To date, we have paid in excess of $18 million in fees, for losing us $30 million,” the report says at one point, referring to a fund reportedly managed by the son-in-law of the head of Libya’s state oil company.

The report, prepared by the London office of consulting firm KPMG, shows that a $300 million Libyan investment in Permal, a hedge fund, lost 40% of its value from January 2009 to September 2010. At the same time, Permal received $27 million in fees.

“Very high fees for no value.” Libyan officials said in the report

Similarly, Dutch firm Palladyne received $19 million in fees, BNP Paribas earned $18 million, Credit Suisse took $7.6 million and the Swiss firm Notz Stucki had $5 million in fees despite producing low returns.

Representatives for the firms declined to respond publicly or could not be reached for comment. NYT

ICICI Bank Gaddafi fund yields 38%

Gaddafi may have suffered huge losses on various funds, but his investment in ICICI Bank, the only Indian company in the Libyan Investment Authority portfolio, gave impressive returns. LIA’s ICICI Bank investment appreciated by 38% in June-Sept 2010, the document said. It is not known if LIA is still invested in ICICI. PTI/New Delhi