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Building boom: Libya is funnelling oil cash into a number of projects, including hotel construction in the capital Tripoli

Libya set to shop with oil fund cash

Libya's oil fund controls assets worth more than $65 billion but has only up to 23% of its available cash funnelled into investments, fund chairman, former National Oil Corporation executive Abdulhafid Zlitni said.

The Libyan fund had a positive albeit small return on investment last year, after enjoying roughly a 15% return on investment in 2007, Zlitni said.

"We're very liquid," Zlitni, who is also Libya's planning minister, told Reuters at a dinner in Rome.

"And when you have cash now, you're king."

He said the Libyan fund has less than 10% percent of its portfolio invested in Italy, where Libya has taken the business world by storm by snapping up stakes in major companies like bank UniCredit and major oil player Eni.

Zlitni declined to specify what other countries the fund was looking to invest in or the sectors it considered most appealing but said he found the battered banking sector less attractive than other sectors for investment.

He acknowledged the recent slide in oil prices would hurt the amount of money flowing into the fund, and predicted turmoil would rock the markets for rest of the year.

"It's going to be a bad 2009 for everyone," he said. "Now the market is very delicate, and investors are looking for the situation where the markets clear up."

The fund is mainly guided by fair returns for its investments over the long term but will take board seats in companies when entitled due to the size of the shareholding built up, said Zlitni.

"We're not short-term investors, we're not buying and selling stocks," he said. "We need to get a fair return on our investment and have security of our investment. If we're entitled to a (board) seat we'll take it."

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