Equity International closes third fund on $300m

With its new vehicle, San Zell’s private investment firm plans to continue focusing on property-related companies in emerging markets.

Chicago real estate investor Sam Zell’s emerging markets investment firm, Equity International, has closed its third private equity real estate vehicle, EI Fund III, on $300 million (€230 million).

The fund series largely focuses on real estate-related operating companies outside the US, particularly in emerging markets like Brazil and Mexico. The firm has also made recent inroads in China and Egypt.

But the firm’s first two private equity real estate funds have largely targeted Latin America.

“Our initial success in Mexico has been replicated in Brazil by focusing on market inefficiency and the opportunity to create leading operating businesses,” Gary Garrabrant, chief executive officer of the firm, said in a press statement announcing the fund close.

The firm took Mexican builder Homex public in a 2004 IPO and recently did the same with Brazilian company Gafisa, which went public early last year. 

Late last year, Equity International also invested $44.5 million for a 14.4 percent stake in ECISA Group, a Rio de Janeiro-based owner and operator of Brazilian shopping centers. In January, Equity International exercised an option to acquire an additional 13.1 percent of the company. GP Investments, a Brazilian private equity firm that Equity International has worked with in the past, will acquire an equal stake in ECISA.

Outside of Brazil, the firm recently invested $50 million in Santiago, Chile-based retail operator Parque Arauco, which develops and manages malls in Chile, Argentina and Peru.

The first fund in the series closed in 1999 on $370 million, while the firm’s second vehicle closed on $300 million in 2006.