It also opened up new challenges. When you invest in emerging markets, you’re trading the rule of law for growth. If you think you can count on recei… - Sam Zell

But by the end, we had raised over $1 billion. I think it was the largest fund of its kind at the time. We focused on turning around companies that had taken on excessive debt in the 1980s. We contributed our own capital in order to align our interests with those of our investors, and we didn’t charge fees on each acquisition like many leveraged-buyout firms did. Instead, we used the funds to share risk with our investors — and to share opportunities. We had a stated objective of holding our investments for ten to twelve years.

In emerging markets, a big clue to national stability is whether a country is on the verge of investment-grade rating. Early on, I came to the conclusion there’s no other time in the life of any country when it’s more disciplined and more transparent than when it’s a year or two away from reaching investment-grade status.

I was the pitchman. I went to each of the houses, sat on a lot of couches, and flipped through dozens of family photo albums as I explained to the homeowners that we were going to build student housing and they could either stay and put up with loud music at night and beer cans on the lawn, or they could move to the other side of Ann Arbor. It worked. I kept buying houses and eventually acquired one full block of land. They were all cash deals, $1,000 each to tie up the properties with deferred closings requiring around $20,000.