Investors are making inroads into Iraq but those doing business there say it will take years before large global investors can capitalise on the country's development into a major oil producer.
Having emerged from the violence that has shaken the country since the US invasion in 2003, Iraq is now seen as increasingly ripe for outside investment.
While the country's parliament has yet to form a government from elections in March, the bombings and killings that preceded the vote have largely subsided.
"I would feel less safe in Karachi than I would in Baghdad," said Zaab Sethna, the head of the Baghdad office of Northern Gulf Partners, an investment and advisory company that focuses on Iraq.
"In terms of physical security, violence is down by 95 per cent since the height in Iraq by number of incidents, number of civilian casualties, number of coalition casualties.
"Virtually every Iraqi I speak to … says my brother just moved back, my cousin just came back from Cairo, my daughter's back in university, my uncle reopened his factory. You can feel it."
Against that backdrop, companies such as Northern Gulf are stepping gingerly into investments in Iraq, usually on a one-off basis and mostly involving partnerships with established businesses.
Northern Gulf has advised numerous foreign investors on setting up businesses in Iraq and acquiring parts of private companies there. It has even started its own equipment leasing company with the help of a partner.
As with many of the first forays into Iraq after the occupation, Northern Gulf's idea is to invest in sectors - equipment leasing, oil drilling and fuel storage - that will eventually play a role in developing Iraq's oil fields, which by some estimates are the biggest in the world.
Dr Hussain al Shahristani, the Iraqi oil minister, said this month that crude reserves stood at 143.1 billion barrels, putting the country's untapped stocks of oil ahead of Iran as the world's fourth-largest.
MerchantBridge, an investment company backed by wealthy Gulf interests, has taken a more wide-ranging approach to its smattering of Iraq investments.
It also partnered with Qatar's Qtel in 2007 to form Asiacell, a new telecommunications company, and teamed up with Qatar National Bank to launch Mansour Bank in 2005. Its most recent investment was a US$220 million (Dh808m) partnership with France's Lafarge to lease a cement plant in Karbala from the government.
"The commercial environment is imperfect, there's no doubt," said Eric le Blan, the chief operating officer for MerchantBridge. "You have political uncertainty, which you cannot deny.
"The government has still not been formed and the way you have to operate in Iraq and where MerchantBridge has been very successful - and remember that on an aggregate basis we have since 2003 racked up an 80 per cent return on capital - we have done it on a deal-by-deal basis with best-of-practice partners."
MerchantBridge also last week launched the Mesopotamia Fund, which is aiming to raise about $10m to invest in the fledgling Iraq Stock Exchange.
Invest AD, an investment company indirectly owned by the Abu Dhabi Government, launched its own Iraq stock fund a few weeks ago.
Things might slowly be getting better in Iraq, but virtually all of the players there agree it is far from ready for large pools of institutional money.
Investors are hungry for the returns it offers but the country's businessmen are unused to approaches from foreigners, and the modern management skills and international know-how that western investors see as necessary are largely absent.
Those factors, combined with an underdeveloped legal system and continuing political uncertainty, have staunched investment in Iraq from big private equity investors.
"I have seen people do deals that will make them huge amounts of money in Iraq," said a private equity executive in Dubai who asked not to be identified.
"But I don't buy the idea yet that I can go out and raise a fund from institutional investors and tell them I'm going to go to Iraq. With what legal infrastructure am I going to protect their investments?
"I know people who have made more money in the last three years making investments in Iraq than I will make for the rest of my life.
"The returns are there, no question, but it's not a professional private equity market. It's a deal-maker market. It's a traders' market."
