Chicago-based Equity International, a privately-held investment company focused on real estate-related businesses operating outside the US, has formally dissolved its first fund, having ac
Chicago-based Equity International, a privately-held investment company focused on real estate-related businesses operating outside the US, has formally dissolved its first fund, having achieved a 24.4 per cent annual return on investment over nine years. The fund generated total gross proceeds of USD991m, representing a 3.1 times return on invested capital.
‘From Equity International’s inception, our objective has been to generate superior investment returns by applying our competitive strengths as an investor, operator and professional opportunist,’ says chief executive Gary Garrabrant. ‘We are thrilled with these results and, equally important, the establishment of our international investment company.’
Created in 1999, Fund I was the first in a series of Equity International funds dedicated to investment in real estate operating platforms outside the US with a strategic focus on trends such as growth of the middle class in emerging markets, monetisation of corporate property, and broadening equity and debt securitisation.
The fund was characterised by a concentration of investments in Mexico, where Equity International invested in four companies: Homex, a homebuilder listed on the New York Stock Exchange, Mexico Retail Properties, a developer and operator of shopping centres, Corporate Properties of the Americas, the country’s largest industrial property firm, and Credito Inmobiliario, a real estate specialty finance company.
Fund I was also a co-investor with and ultimately a shareholder in Madrid-based NH Hotels and an investor in Fondo de Valores Inmobiliaros, a Caracas-based owner and operator of office and retail properties.
Equity International and Homex achieved international recognition with the initial public offering of Homex in June 2004 on the NYSE and the Mexican Bolsa, helping to propel the company from an initial equity value of USD100m to more than USD3bn today.
‘Equity International has been a highly valued partner of Homex and the company’s founders,’ says the Mexican company’s chief executive Gerardo de Nicolas. ‘We appreciate their vision, capital markets expertise and commitment.’
Equity International focuses exclusively on real estate-related businesses, co-investing with local operating partners, focusing on scalable platforms, and creating multiple exit options. ‘We have replicated both our focused strategy and our investment approach from Fund I as we’ve subsequently raised funds II, III and IV and expanded into markets such as Brazil, China and Egypt,’ Garrabrant says.
‘We are extremely pleased with the returns generated for our investors in Fund I,’ says chief financial officer Diane Morefield. ‘Our accomplishments in Fund I have helped establish Equity International as a leading international investor, and we are delighted to have a distinguished group of investors who have supported us in these efforts,’ including university endowments, pension plans, insurance companies, family foundations and private investors.
Founded in 1999 by Sam Zell and Garrabrant, Equity International has raised and invested USD1.5bn in 16 portfolio companies to date. The firm is affiliated with Equity Group Investments, an investment company founded and headed by Zell that holds a wide range of corporate and real estate interests.
