Equity International seeks $500m for Brazil investment

The Chicago-based private equity real estate firm is reportedly raising up to $500m of equity to beef up its investment in Brazilian real estate, anticipating strong demand in the region due to the economy’s rapid growth.

Equity International is raising $500 million to expand its real estate investments in Brazil, according to a Bloomberg report.

Co-founded in 1999 by billionaire investor Sam Zell and Gary Garrabrant, Equity International will invest as much as two-thirds of the capital in Brazilian companies tied to residential and commercial property, with the rest in other countries outside the US, the report said. The new cash will bring the Chicago-based firm’s total amount invested to a reported $2 billion.

“Our enthusiasm for Brazil could not be higher,” Garrabrant, Equity International’s chief executive officer, told Bloomberg on Wednesday. “You’ve got this local demand that’s unparalleled.”

In May 2009, Garrabrant dismissed the idea that Equity International had a Latin America-centric strategy looking forward, telling PERE: “We are agnostic, we don't have a Latin theme. We have just seen such great opportunities in the region … We love Brazil and we will continue to pursue opportunities in Brazil.”

Garrabrant said at the time he wanted to grow the number of Equity International’s portfolio companies targeting Brazil from five to seven or eight, even if that meant Equity International starting “one or two” operations itself.

In 2006, the firm did just that by creating real estate investment management company Bracor together with Carlos Betancourt, Banco Itaú and Capital Trust, the latter of which has since exited its position.

Equity International has raised four real estate funds to date, closing on a total of $1.45 billion of equity commitments between 1999 and 2008.

In December 2009, Equity International bought an 8.5 percent interest in São Paulo-based finance company, Brazilian Finance & Real Estate.