For what you've described, you can do it without nesting:
{IF{MERGEFIELD AR}= "*e" {MERGEFIELD AR \* Charformat} {MERGEFIELD AR}}

Note: The field brace pairs (i.e. '{ }') for the above example are all created in the document itself, via Ctrl-F9 (Cmd-F9 on a Mac); you can't simply type them or copy & paste them from this message. Nor is it practicable to add them via any of the standard Word dialogues.

__________________
Cheers,
Paul Edstein
[Fmr MS MVP - Word]