Private equity funds devoted to investing in the Middle East and North Africa grew to $5.2 billion in 2006, from $316 million in 2004, according to Zawya Private Equity Monitor.

Calpers, the California Public Employees’ Retirement System, among other pension funds, is planning to invest in Carlyle’s Middle East fund and is also an investor in Ripplewood. The pension fund opposed Governor Schwarzenegger’s pledge. To comply, the fund expects to sell nearly $2 billion in investments in 10 companies and has estimated it will cost $17 million in transaction fees.

“We don’t have political strains,” said Patricia K. Macht, a spokeswoman for Calpers. “We are agnostic where specific investments are made.”

Some in Washington are not so willing to put politics aside completely. “Public pension funds are public and should respond to democratic forces,” said Representative Brad Sherman, Democrat of California. While he is “not for boycotting the entire Middle East,” he does have concerns about investments in certain countries.

“Syria would not make me happy,” Mr. Sherman said. “We should be trying to change Saudi behavior.”

While Syria or Iran may not be reflective of the rest of the Middle East, buyout chiefs still need to sell investors and politicians on the merits of a region that is politically fraught and, in some cases, still better known to some for terrorism than capitalism.

Image David M. Rubenstein, head of the Carlyle Group, defends his firms Middle East fund. People see that theres going to be a lot of economic activity here and a lot of value creation, he said. Credit... Andrew Councill for The New York Times

“I was on the phone with my mother last night and told her I was in Dubai,” said Mr. Rubenstein, a white-haired 58-year-old with large tortoise-shell-rim glasses, explaining the challenge he faces. “Of course, she asks, ‘Is it safe? There’s always bombs going off and wars,’” he recounted, rolling his eyes for effect. “I told her Dubai is probably a lot safer than Florida.”