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New York Life backs ex-Zell partner in emerging markets bet

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(Bloomberg) — New York Life Insurance Co. is turning to billionaire Sam Zell’s former partner to make bets on emerging-market real estate.

The insurer took a stake in Jaguar Growth Partners and plans to commit as much as $100 million to the first fund at the firm, which will invest in properties in developing markets, according to a statement today. Jaguar is led by Gary Garrabrant, a co-founder of Equity International with Zell.

New York Life, the largest U.S. life insurer owned by policyholders, is looking for ways to increase investment income as the Federal Reserve holds interest rates near record-low levels. Chief Investment Officer John Kim has been turning to managers who specialize in assets beyond stocks and bonds to bolster his portfolio.

Today’s deal “will provide New York Life with a differentiated set of alternative investment opportunities,” Kim said in the statement. “In today’s challenging investment environment, we are pleased to have a partner with the knowledge and insight to help us benefit from investment in real estate growth markets.”

Life insurers typically invest in high-grade corporate debt to back future obligations to policyholders. New York Life oversaw about $550 billion as of Sept. 30.

Zell, 73, took over Equity International as interim chief executive officer in 2012, after Garrabrant left the firm. The men co-founded Equity International in 1999 to bet on real estate in developing nations. Zell, who’s worth $5 billion according to the Bloomberg Billionaires Index, founded Equity Group Investments LLC, a Chicago-based private investment firm that’s more than 40 years old.

Latin America

Garrabrant founded Jaguar last year with Thomas McDonald, the former chief strategic officer of Equity International. Garrabrant said Latin America offers the greatest opportunities while he also may invest in Asia.

“I wouldn’t lead with China, for reasons that relate more to China’s complexity,” he told Bloomberg Television’s Betty Liu in an interview today, citing constraints on lending and property rights.

Today’s statement didn’t give the terms of New York Life’s investment in Jaguar. Zachery Kouwe, a spokesman for Jaguar at Dukas Public Relations, said New York Life is taking a minority stake in Jaguar and declined to give details.



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