Private Equity Funds Brazil Builders With 23% Returns: Mortgages
Brazil's homebuilders are turning to private-equity firms for financing as banks withdraw lending after cost overruns added to rising debt burdens.
Billionaire Sam Zell's Equity International, Paladin Realty Partners LLC and Prosperitas are offering to fill a funding gap as Brazil's President Dilma Rousseff tries to make good on her promise of 2 million new homes by 2014. The portion of bank deposits used to finance home construction fell 17 percent in the first quarter to 6 billion reais ($3.1 billion) from a year earlier as loans to buy houses rose 32 percent to 11.6 billion, according to Abecip, Brazil's mortgage lenders association.
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