Private equity turns to Iraq
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Private equity turns to Iraq

Government seeks foreign investors; Opportunities in real estate, cement and power

mln dollars: Trade Bank of Iraq’s private equity fund

For some, Iraq is one of the world’s few markets where prospects seem brighter than a year ago. With violence having subsided somewhat, lower oil revenue has encouraged the government to seek foreign investment more actively. Private equity practitioners in particular seem to think they have a better chance to assist in the reconstruction requirements of the country, with its young and relatively well-educated population, and the Middle East’s third-largest oil reserves. A number of western fund managers are setting up new private equity funds focusing on Iraq. London-based private equity firm Merchant Bridge already derives about a third of its revenue from Iraq. Chief executive Basil Al Rahim says it is getting easier to gather funds for projects in his home country from his predominantly Gulf financial backers.

"Two years ago no one wanted to talk about Iraq. Today people will listen. There’s an appetite," says Al Rahim. Given that there is only about $2 billion in Iraq-listed public stock, the focus on private equity is understandable. Merchant Bridge is setting up an open-ended mutual fund with a seed capital of $10 million to invest in Iraq’s equity market, where banking is the most important sector.

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