Homex: Investing in Emerging Markets Real Estate
In 2002, Equity International was considering an investment in the family-owned Mexican homebuilder Homex. While Homex had passed EI's due diligence process with flying colors, the US real estate investment company wanted to make sure this was the right investment. In addition to country and political risk, the investment would be taking on execution risk, and there were questions about how a tight-knit family would react to taking direction from a foreign investor. In this case students study the investment's risk factors and opportunities before projecting the investment's annualized internal rate of return and outlining an investment recommendation.
Case id: 081703