Clube tries to bridge the Persian gulf

A youthful population -- half the citizens are under 20 -- makes for vitality. And the typical stock trades at a price-earnings ratio of just 9. It’s one of the last great undiscovered emerging markets.

The trouble is, it’s Iran. U.S. President George W. Bush has included the country in his “axis of evil,” and the U.S. State Department has declared it the world’s biggest state sponsor of terrorism. American troops are camped on Iran’s western border, and some believe that an invasion is inevitable.

Those nettlesome risk factors aside, Iran presents a terrific opportunity, contends Tristan Clube, senior investment adviser to the $50 million First Iran Fund, the only Iran vehicle for foreigners. A onetime geophysicist, Clube, 42, works from Edinburgh for Egyptian private bank EFG-Hermes, which runs Middle Eastern and North African equity funds.

“For all of the saber rattling of the neocons in Washington,” Clube says, “Iran remains an important regional player that they have to do business with, especially if the U.S. wants stability in Iraq.”

EFG-Hermes raised money for the fund from London-based emerging-markets specialists, Gulf institutions and rich Iranians. (The fund closed last month.) “For obvious reasons, we didn’t really market in the U.S.,” Clube says.