Equity International in first Brazil exit

The Chicago-based firm co-founded by Sam Zell and Gary Garrabrant concludes its investment in São Paulo-based homebuilder Gafisa, leaving the firm the only Brazilian company listed on the New York Stock Exchange.

Equity International has sold its remaining stake in Brazilian homebuilder Gafisa for an undisclosed amount, marking an end to the Chicago-based firm’s six-year relationship with the company and concluding its first investment in Brazil. 

Equity International, the real estate investment firm co-founded by Sam Zell and Gary Garrabrant, said in a statement it had sold its remaining 2.7 percent interest in Gafisa after originally taking a 23.4 percent stake in the national homebuilder. Equity International began selling off its stake in Gafisa in a series of sales starting in 2007, selling 13.2 million shares in the company last October.

“Gafisa represents Equity International’s first investment in Brazil and we have been exceedingly pleased with the success of our investment and our partnership,” said chief executive officer Gary Garrabrant in a statement.

Equity International made its first investment in Gafisa in 2005 and with the help of GP Investimentos, shepherded Gafisa into becoming a publicly-traded company and Brazil's first national homebuilder. Following the Gafisa sale, Equity International will have five Brazilian portfolio companies – BR Malls, Brazilian Finance & Real Estate, AGV Logística, GuardeAqui and Bracor, according to a spokesperson. “We look forward to expanding our Brazilian portfolio in current as well as new sectors,” Garrabrant added in the statement.

In May, Garrabrant told PERE the firm was eyeing five or six new investments in Brazil’s regional homebuilding sector, as well as potential deals in the domestic hospitality sector. He also added at the time that Equity International was set to announce another deal with Brazilian entrepreneur Carlos Betancourt. In 2006, the firm, together with Betancourt, Banco Itaú and Capital Trust, founded São Paulo-based developer Bracor Investimentos. In January, Bracor sold 30 of its 42 properties to private equity real estate firm Prosperitas Investimentos for R$2.2 billion (around US$1.3 billion at the time).

Gafisa has an equity market capitalisation of US$2.1 billion and $70 million on the Bovespa and New York Stock Exchange. Gafisa remains the only company in Brazil listed in the NYSE.