This is from the documentation:
LaunchBar uses a very powerful, adaptive abbreviation search algorithm that allows you to use arbitrary abbreviations to locate those items whose name matches the entered abbreviation.
Say you want to open "Adobe Photoshop", you may use AP, ADO, PHO, ADPS, and so on. Please note that LaunchBar not only searches for items with matching initial characters (ADOB -> Adobe Photoshop) or contained character sequences (PHOTO -> Adobe Photoshop), but you can use any combination of characters, provided that they appear in the same order (ADPS -> Adobe Photoshop).
This tells me that if I type 'ie' it should list Internet Explorer. What you suggested doesn't work either. I emailed the developer, but haven't heard back yet.