Lucas Amorim - Revista EXAME 02/01/2015

It is the right time to invest in Brazil says American investor Sam Zell to EXAME magazine - São Paulo - At 73 years, the American investor Sam Zell, the world specialist in buying and selling real estate, spends more than 200 days a year away from his office in Chicago. He received EXAME in the suite of a São Paulo hotel Tuesday morning, only 1 hour after arriving in the United States and a few days to embark again. Recently been in countries that are far from the radar of the main investors in the world, such as Libya and Mongolia. For Zell, thiscuriosity is essential when it comes to sniffing out good opportunities and, especially, to swim against the current. He specializes in buying companies neglected by competition and jump off at the right time. In 2007, on the eve of the US crisis, closed the largest deal in the history of the property market to sell commercial real estate company Equity Office Properties for 39 billion dollars. It was so in its largest investment in Brazil, Gafisa construction - as it was in 2012, months before the company plummet in the bag. Now his biggest bet is the storage company Store Here, it operates in a still little relevant market in the country. While large funds look at Brazil with suspicion, he says that this is the right time for new investments here. EXAME - Two years ago you told EXAME that Brazil would live difficult years ahead. Now what? Sam Zell - The fact that Brazil is going through a difficult period. But I believe that the country's forces will ultimately prevail. President Lula was successful because it combined social activities with economic prudence. The current administration forgot prudence. This is clear to the nationalization policies, such as in the oil sector. Instead of using known technologies across the world, preferred to construct the own country. This is unwise from any perspective. With the choice of the new finance minister, no chance of a return to rationality. EXAME - So you're optimistic about the next few years in Brazil? Sam Zell - Yes. You have scale. There are 200 million people. This creates opportunities. This is a society very "aspirational". Our original motivation to invest here was the belief that the movement of the lower classes to the middle class and the upper class would be very positive for Brazil. Of course it's much more difficult now than five years ago. On the other hand, five years ago all my competitors were here. Today, as far as I know, I'm the only one. In our history, there is a direct correlation between success and degree of competition. With intense competition, it is very difficult to do good business. EXAME - The question that everyone is here: the price of real estate will fall? Sam Zell - If I had to bet, bet against falling prices. In the residential side there may have been an oversupply in some regions. But there was no excess supply in offices, retail, in sheds. It is different from what happened in the United States, where everything stopped. Banks stopped. In Brazil, banks are well. And do not think you have the toxic financial instruments that contributed to the problems in the United States. EXAME - You're known for great investments. But today, in Brazil, has small investments in Paraná construction Thá and storage company Save Here. Plans big hits? Sam Zell - We are ready to make big or small investments in accordance with the size of the opportunities. Do not worry about the size of the investment, but with the growth potential and the possibility to make a difference in a particular market.

The Store Here meets rising middle class. She wants to build things. And the apartments are smaller and smaller. Here we are already market leaders, but we have tremendous opportunities to grow. I see no limits. In Thá Group, we are much more dependent on the residential market health. EXAME - Brazil lagged behind in comparison with its neighbors? Sam Zell - Colombia and Peru are the stars of the continent now. When we came to Brazil for the first time, we would never have invested in Colombia. Now we have large investments there. If I had to pick a favourite country in the world today would be Colombia. Peru is on our radar. Probably the elephant in the room is Argentina, which is a total mess. They will have an opportunity with a change of government next year. Argentina has a long history of fiscal irresponsibility, which makes investing their very challenging. EXAME - You care about the political environment in the region? Sam Zell - Of course. Look at the real, which was 1.75 to 2.60. It is a very large devaluation. And it will obviously cause difficulties for the country, will create inflation. Political decisions directly impact our investments. EXAME - Politics is the most important factor when you decide whether to invest in certain markets? Sam Zell - Starts with the policy. Then comes the economy. But if the policy is not reasonable, the economy does not matter. We learn this in countries such as Venezuela. Another important issue is demographics. In Japan and most of Europe, there are fewer people in December than it had in January. As an investor, what I do is to try to determine where the demand is and see how I will be able meet this demand. If the population is shrinking, the demand will be also. So I prefer to invest in Brazil or India, where the population and the demand will grow. EXAME - How do you study your potential market? Sam Zell - I read all the time. And also travel a lot. Some time ago, I started reading about Mongolia. Li that Gucci was opening a store in Ulan Bator, the capital. I thought that was crazy. I flew and went there. There was nothing there for me to do, but it's all part of the learning process. You can not be a successful entrepreneur if not a keen observer. This is crucial to see things simply. Today, buildings account for about 30% of my investments. The other 70% are distributed in several areas. But that does not bring complexity. We do not invest in high technology, for example, because they do not know. But we invested a lot in areas such as energy and logistics, we can make a difference. EXAME - How to differentiate a good chance of a deal with excessive risk? Sam Zell - My analysis begins not with how much I earn, but how much can I lose in business. I dedicate 80% of my attention to it. In the 90s, for example, closed a huge purchase in California. Our analysis showed that if everything went wrong, we would lose $ 50 million. And indeed go through fires, earthquakes, and these things that happen there. We lost just 50 million. For me, it is a success story. 

Sam Zell