Invest AD, an investment company owned by the Abu Dhabi Government, is launching a fund to invest in Libya's young stock market.
The fund, seeded with Invest AD's own money, aims to take advantage of growth in Libya's oil-based economy and the development of a stock market founded only four years ago.
"Libya has taken positive steps to open its economy and is reaping the rewards, with very high rates of economic growth," said Nazem Fawwaz al Kudsi, Invest AD's chief executive. "We're glad to be there at an early stage of this process, and are very much long-term investors.
"This fund will contribute capital to some of the country's most promising businesses to help them grow for years to come," he said.
Only 25 stocks are listed in Libya, and the combined value of shares is only about US$2.2 billion (Dh8.08bn). Invest AD did not disclose the size of its fund.
Libya's economic growth has been volatile in recent years, with a 2.3 per cent fall in 2009 followed by a 10.6 per cent climb last year, according to IMF estimates.
But the country is Africa's largest oil producer - it produces about 1.8 million barrels per day - and is building up its energy infrastructure, which Invest AD is hoping will inject more money into the local economy and lead to a rise in stock-market activity.
More than 10 stock listings are already in the pipeline, Invest AD said. Part of the strategy for the new fund is to invest in initial public offerings and take stakes in private companies that are preparing to list.
The Libya fund adds to a growing portfolio of investment offerings from Invest AD in underdeveloped frontier markets. The company launched funds focused on Iraq and emerging African markets last year, adding to a suite of funds targeting the MENA region, the GCC and the UAE.
"We are very bullish on frontier markets, which have lagged [behind] the global markets recovery in the last couple of years but display some of the highest rates of economic growth in the world," said Mohammed al Hashemi, the head of asset management at Invest AD.