Libya To Launch Hedge Fund In London

Jun 16 2010 | 1:18pm ET

More than two decades after a former Libyan intelligence officer bombed an airplane over Scotland, killing 270 people, Libya has established a hedge fund in London to nurture its nascent financial services industry.

The formerly rogue state—which began normalizing relations with Western countries after accepting responsibility for the 1988 bombing and agreeing to compensate victims’ families—established FM Capital Partners a year ago. The firm, which will operate out of London’s Knightsbridge neighborhood, will both manage money for Libyan sovereign wealth funds and serve as a kind of hands-on academy to train Libyans in the financial markets.

The new firm is headed by Frederic Marino, formerly of Merrill Lynch, Bear Stearns, and JPMorgan Chase.

“We are not doing any politics,” Marino told The Independent. “There is a lot of business being done with Libya today. Large U.K., French and Italian companies are doing business. Investment banks in the U.K. and U.S. have been doing business with Libya for three or four years. What happened in the past does not reflect what is happening now.”

FM Capital has applied for registration with the U.K. Financial Services Authority and plans to launch its fund in the summer. It is unclear how much the firm will manage; it is expected to garner several hundred million dollars from the Libyan Investment Authorities and others, with a decision expected in the next few weeks. FM also aspires to manage money for other Arab governments, as well.

Marino hopes to have 40 staffers at FM by the fall, and was in Paris this week seeking mathematicians to train his charges.

“What we are developing is not just an investment fund,” he explained. “What we will give back to our clients is not just the returns on their investment that we generate. This is also about the transfer of investment technology and creating a generation of people who, in four or five years, will have a good level of technical international financial knowledge.”

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