Pioneering Markets

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

That’s right, I said Libya – the country best known to Americans as the homeland of Muammar Qaddafi and those VW van drivers who tried to kill Doc Brown. Seems times have changed (except for the part about Qaddafi being in charge).

Libya formally gave up its nuclear ambitions two years ago, and ever since has been on a slow but steady path toward global reintegration. Now, it’s poised to get its first dedicated private equity fund.

The general partner is Taureg Capital, an 8-month-old firm with staffers in Bahrain, London and Tripoli. It currently is pre-marketing the fund with a $100 million target, with initial commitments coming from founding shareholders ASA Consultants and United Gulf Industries Corp. Expect most LPs to come from the MENA (Middle East/Africa) region.

“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.” says Abdulla Boulsien, a Taureg principal who previously spent six years with Merrill Lynch’s UK-based leveraged finance team. “If you understand the country like we do, you’ll see enough deals here for ten private equity funds.”

Boulsien says that the Taureg fund will be sector-agnostic, and already has been scouting out opportunities in areas like oil and gas, real estate, catering, healthcare centers and education.

My initial thought was that these guys are serious outliers, but it’s worth noting that there actually have been some major private equity developments in Libya over the past several weeks.

First, VC Bank (Bahrain) and Global Emerging Markets (New York) recent paid between $40 million and $50 million to acquire a stake in Libyan oil drilling contractor Challenger Ltd.

Second, 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. Also note that Carlyle just hired a new MENA group head.

“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.”