A hedge fund with Carlyle Group LP, the world’s second-largest private equity firm, has lost $400 million it invested in 2015 in a Moroccan oil refinery deal, according to a securities filing and people familiar with the matter, Wall Street Journal reported.

U.S-based private equity firm Carlyle claims to be one of the largest and most diversified corporate PE firms in the world.

The Vermillion hedge fund was supposed to get a share of revenue at the refinery, which subsequently ran into financial trouble and was seized by Moroccan authorities in 2015, according to WSJ. The refinery, known as Samir — Societe Anonyme Marocaine de l’Industrie du Raffinage — went into liquidation in 2016.

Saudi billionaire Mohammed al-Amoudi has a 67.26 percent stake in Samir through his Corral Holdings, Reuters reported in June. Samir has been battling creditors ranging from oil traders to banks who are owed millions. The Moroccan government says Samir owes it $1.33 billion in taxes.

In the firm’s quarterly filing last week, Carlyle said in a note it believes $400 million in petroleum commodities were “misappropriated by third parties outside the U.S.” It didn’t identify the third parties. The note refers to Samir.

This deal highlights the risks U.S. investors face in emerging markets that have unfamiliar investor-protection laws, WSJ reported.

Still, investors continue to find the lure of higher growth in emerging markets attractive despite the risks, according to a Barrons blog.

The Washington, D.C.-based private equity firm said in September it planned to buy a majority stake in South African promotional products and clothing supplier Amrod. It said it plans to expand the business in other markets, according to a prepared statement, AFKInsider reported.

Carlyle said it will fund the investment through its Carlyle Sub-Saharan Africa Fund, with the three Amrod founders reinvesting alongside it. The transaction is expected to close in 2016 but Carlyle gave no further financial details at the time.

Carlyle was expected to lodge a joint bid for Barclays Africa with former Barclays boss Bob Diamond, but pulled out of a three-member consortium.

Diamond told Bloomberg that Carlyle had pulled out of the consortium, partly over the South African central bank’s reluctance to support an offer from a private equity firm.

As of September, the Carlyle Sub-Saharan Africa Fund had almost $300 million invested in logistics, agribusiness, mining, retail and financial services. Markets included Nigeria, Mozambique, Zambia, Tanzania and South Africa.

The fund makes buyouts and growth-capital investments in private and public companies. It has offices in Johannesburg and Lagos.

In July, Carlyle made its first-ever exit in Africa, and sought to increase its investments on the continent after exiting Export Trading Group, a Tanzanian-based continental supply chain manager, according to a Further Africa report.

The private equity firm – one of the largest operating in Africa – usually targets firms in consumer goods, financial services, agribusiness, and energy.

In August, Marlon Chigwende made waves when he left his job as managing director and co-head of Carlyle sub-Saharan Africa. He had headed the U.S. firm’s Africa division since it entered the continent in April 2014 after an initial fund raising of US $698 million, Financial Mail reported.

Carlyle said it has spent $5 million in legal and professional fees trying to get its money back in the Moroccan oil refinery deal, WSJ reported. An unnamed investor has asked for redemption as a result of the incident:

Carlyle expects to join a group similar to creditors committees that are formed in U.S. chapter 11 cases, (people familiar with the matter said). But the prospects for a recovery of its investment are less clear than they would be in a U.S. bankruptcy proceeding. Other creditors include BP PLC and Glencore PLC.

The loss represents the latest misstep in Carlyle’s hedge-fund business, which has suffered declines in commodity and credit investments and investor withdrawals. Carlyle is pulling back from the business and plans to focus more on corporate lending. Co-founder William Conway said on an earnings call last month that Carlyle is decreasing its “exposure to shorter-term trading businesses, areas where, frankly, we have not performed well.” Carlyle expects to have about $1 billion of hedge-fund assets by year-end, down from $14.7 billion as of the third quarter of 2014.

Carlyle and other big private-equity firms moved into hedge funds to diversify beyond their corporate buyout businesses.