Just 10 months after closing on $300 million for its existing fund, Chicago’s Equity International is approaching investors about a next fund with a cap of $500 million.
Equity International, led by its chief executive Gary Garrabrant and part of Sam Zell’s investment empire, has recently seen spectacular success with investments in homebuilding companies based in emerging economies. The firm acquired stakes in Homex, a leading Mexican homebuilder and Brazilian homebuilder Gafisa. Both are now publicly traded. The firm also has stakes in Chinese and Egyptian homebuilders.
Although Zell, Equity International’s chairman, is known primarily as a real estate investor, Equity International does not pursue direct real estate transactions, instead focusing on businesses that benefit from rising activity in real estate ownership and development around the world. Among the countries drawing attention from the Equity International team is Libya, which Zell and Garrabrant have said they believe to be on the cusp of a wave of development.
The firm’s second fund, raised in early 2006, has returned more than 200 percent to investors, according to a recent Reuters report. According to an Equity International press release, the prior fund secured commitments from university endowments, pension plans, insurance companies, family foundations and private investors.