Founded in 1999, Equity International (EI) has been at the vanguard of institutionalizing developing markets, identifying and partnering with leading operating companies, and attracting both equity and debt capital.
Our investment philosophy is founded on the premise and conviction that the most compelling real estate-related opportunities outside of the United States are operating platforms with the potential to achieve scale and realize significant enterprise value beyond the value of the underlying assets.
EI’s history is distinguished by our strategic focus on identifying markets shaped by significant macroeconomic trends such as the emergence of the middle class, capital inefficiencies and other high barriers to entry, and establishing an early and substantial presence in those markets. We are early in a market, if not first, and we plan our exits accordingly.
We were among the first and most active real estate investors in Mexico, having invested in four companies in the country. This portfolio included Homex, Mexico’s leading homebuilder, for which we led a fully registered initial public offering in 2004 (NYSE:HXM); Corporate Properties of the Americas, an industrial property company we created in 2000 and sold to a large U.S. public retirement fund in 2005; Credito Inmobiliario, a finance company we created through a merger in 2003 and sold to a large U.S. finance company in 2005; and Mexico Retail Properties, a retail property company we created in 2003 and sold to our co-founder in 2008.
As an example of replicating our strategy and success in new markets, we identified Brazil as a similar early-stage opportunity given its limited competition, attractive fundamentals and inefficient capital markets. Our investment in leading homebuilder Gafisa in 2005 led to a successful initial public offering on the Brazilian stock exchange in 2006 (Bovespa:GFSA3) and its listing on the New York Stock Exchange in 2007 (NYSE:GFA), the first U.S. listing by a Brazilian homebuilding company. Following our investment in Gafisa, we co-founded BRACOR in 2006, which has become one of Brazil’s leading corporate real estate companies. In 2006, we also invested in BR Malls, now the largest owner and operator of retail properties in Brazil for which we led successful initial and secondary public offerings on the Bovespa in 2007 (Bovespa:BRML3).
We have expanded our Brazil portfolio with investments in logistics, self-storage and specialty finance, all of which capitalize on the explosive growth of Brazil’s middle class and increasing access to consumer credit.
Our entry into China was similarly motivated by macroeconomic and demographic trends, with high rates of urbanization and a growing middle class driving significant demand for housing, particularly in China’s Tier 2 and 3 cities. In 2006, we invested in Xinyuan, a middle income homebuilder, and we played a principal role in the Company’s initial public equity offering on the New York Stock Exchange in 2007 (NYSE:XIN). We have augmented our portfolio in China with additional investments in homebuilding and warehousing/logistics.
Consistent with our disciplined approach, EI identified Colombia as an important country in a strategic region characterized by fundamental demand across a range of property sectors. Long regarded as a regional leader, Colombia is at an early stage of broad-based economic growth and institutionalizing capital markets. EI established a presence Colombia through a 2011 investment in Terranum Corporate Properties, a corporate property company poised to be the industry leader both in Colombia and in the Andean region.
the middle east & beyond
We extended our strategy to the Middle East in 2006 as a co-founder of Orascom Housing Communities, an affordable homebuilder in Egypt, to capitalize on the strong unmet demand for entry-level housing in Egypt and the surrounding region.
We expect continued investment activity in our current as well as new frontier markets where we find inefficiencies and/or distinct competitive advantages, with a continued emphasis on building early and meaningful presence in these markets and chosen industry sectors.