Equity International makes 3x on first fund

The emerging market specialist has delivered annual returns of 24% from its first fund, Equity International Fund I, following successful forays into Mexico in particular.

Equity International, the US private equity real estate firm, has made annual returns of 24.4 percent and a multiple of 3.1x on invested capital from its first fund, Equity International Fund I.

The gross return of $991 million (€646 million) over the nine year life of the fund was helped in particular by exits from investments in developers in Mexico. 

In April, the Chicago-based firm sold its remaining stake in Mexico’s largest homebuilder, Homex, six years after first investing in the company. EI was one of the main investors in Homex in 2002, helping the company list on the New York and Mexican Stock Exchanges two years later. The 2004 IPO priced Homex at $15.80 per American Depositary Share, as traded on the NYSE. Homex’s share price at the time of EI's exit was $62.17.

Gary Garrabrant, EI chief executive officer, said in a statement: “We are thrilled with these results.”

The firm, established by Sam Zell, launched its first fund in 1999 to invest in real estate operating platforms outside of the US.

Other investments included Mexico Retail Properties, a developer and operator of shopping centers anchored by major international retailers, Corporate Properties of the Americas, Mexico’s largest industrial property company; and Credito Inmobiliario, a real estate specialty finance company.

Fund I was also a co-investor with and, shareholder in NH Hotels, headquartered in Madrid, and an investor in Fondo de Valores Inmobiliaros, a Caracas-based owner and operator of first-class office and retail properties. The firm has subsequently expanded into new territories Brazil, China and Egypt for follow-up funds.