PE marches into Libya

Think you’re adventurous because you invest in China or India? Have some courage—go to Libya.

The North African country began an economic resurgence by dismantling its nuclear program in late 2003, and now is poised to get its first-ever private equity fund. The manager is Tuareg Capital, an eight-month-old firm with staffers in Bahrain, London and Tripoli.

The firm is currently pre-marketing a $100 million fund focused on the Libyan market, with initial commitments coming from founding shareholders ASA Consultants and United Gulf Industries Corp.

“Libya came out of the doldrums two years ago, and for the past year has been focused on reintegrating into the world economy,” says Abdulla Boulsien, a Taureg principal who spent six years with Merrill Lynch’s U.K.-based leveraged finance team. “I’d say it’s probably still too early to call it an emerging market—maybe a pioneering market—but there is an enormous amount of opportunity.”

Taureg might be the first private equity fund dedicated to Libya, but is not the first firm to invest there. Last week, VC Bank (located in Bahrain) and Global Emerging Markets (New York) paid between $40 million and $50 million to acquire a stake in Libyan oil drilling contractor Challenger Ltd. In addition, The Carlyle Group remains in the hunt for $3 billion Libyan oil company Tamoil, although it appears that the winning bidder will instead be Kazakhstan state-owned oil company Kazmunaigaz.

“I was really hoping that Carlyle would buy Tamoil, just because of everything that could help open up,” Boulsien says. “But there is plenty of deal flow, no matter how that turns out.”

Taureg is industry-agnostic, but already has an eye on markets like oil and gas, real estate, catering, health care centers and education. No date has been set yet for a first fund close, but Taureg plans to soon begin formal marketing to prospective limited partners in the Middle East and North Africa. If successful, it then plans to form a fund focused on Algeria. —Dan Primack