Amid shakeup, Zell to lead his Equity International

Sam Zell has stepped in to steady his Equity International investment firm, as both its CEO and chief strategic officer have departed for undisclosed reasons, the Wall Street Jounal reported. Gary Garrabrant, who co-founded the firm with Zell in the mid-1990s and served as CEO, wouldn’t comment on why he left the firm and neither would Thomas McDonald, the chief strategic officer of the firm that’s invested $1.5 billion in emerging markets.

Now, Sam Zell, who serves as chairman, is stepping in to take over as chief executive while he searches for a replacement. But that search could stymie the firm’s investment plans, as a new CEO must be approved by Equity International shareholders lest it cancel future fundraising rounds and Equity can’t make any new investments until a new CEO is appointed and approved.

Zell’s Equity International mostly invests in or buys existing real estate companies in emerging markets, as it has found it difficult to compete with companies whose sole expertise is development in places like Eastern Europe, Brazil and China. Last year the firm raised $650 million and half of it has yet to be deployed. Of late, Zell has turned his international investment focus to Colombia and India, according to published reports. [WSJ] — Adam Fusfeld