Chicago, Dallas Companies Plan Mexico Housing Funds

MEXICO CITY-Mexico Home Capital of Chicago and Dallas-based Hunt-Mexico Inc. have formed a partnership that plans to raise money for an ongoing series of $250-million-plus funds to capitalize on the rapidly growing Mexican housing industry. Among its primary areas of focus will be entity-level transactions involving homebuilders and private mortgage lenders, project financings in partnership with leading developers, loan portfolio acquisitions and special situations. Mexico Home Capital Ltd. is a real estate investment banking boutique with offices in Mexico City. Hunt-Mexico Inc. is a privately funded investment company directed by Ray Hunt, chairman of Hunt Consolidated Inc. and CEO of Hunt Oil Company. The new partnership, Mexico Home Capital Holdings LP, will operate as a specialized merchant bank with in the industry on behalf of third-party investors and also as a principal. The funds will target transactions with a minimum investment size of $20 million.Mexico, the world’s ninth largest economy, suffers from a severe housing shortage estimated by the Mexican government and independent analysts to be in excess of 5 million units. The shortage–a result of demand outstripping supply by 500,000 units annually–represents a revenue backlog of more than $100 billion, according to John Ganschow, the founder and CEO of Mexico Home Capital and the CEO of the new partnership. Ganschow was not immediately available Thursday morning for comment. “This voracious appetite for housing will continue far into the foreseeable future,” he says in a prepared statement. “With nearly three quarters of Mexico’s 100 million residents under the age of 35, this intense level of demand is almost certain to be sustained over the next two decades and beyond.”The joint venture will benefit from an alliance formed last year between Mexico Home Capital and Sociedad de la Vivienda Mexicana, the housing affiliate of Grupo Bursátil Mexicano, Mexico’s largest independent investment bank. Hunt-Mexico president Max Yzaguirre says the joint venture will be successful because Mexico’s domestic financial system, particularly on the equity side, is not adequate to provide homebuilders, private mortgage lenders and other participants with the funds they require to meet this demand. “There is an enormous amount of institutional capital sitting on the sidelines today because quality investment opportunities are increasingly difficult to find in the traditional geographic areas and asset categories,” adds Ganschow. “We intend to position our new partnership with Hunt-Mexico as one of the dominant conduits for global institutional capital seeking to invest in Mexico’s housing sector.”