Earlier this fall Sam Zell took a week-long motorcycle trip through Tuscany. The food was excellent. The wine perfect. The scenery stunning.

Indeed, Zell says, Tuscany is a perfectly lovely place to visit.

He just doesn’t have any interest in doing business there—or much of Western Europe, for that matter.

“Four days in Tuscany, and I didn’t seen anybody working,” Zell joked during his recent presentation, “Sam Zell: The Professional Opportunist,” at Penn’s Zellerbach Theater. “And I didn’t see any kids, either. I drove 1,000 kilometers, all over Tuscany, and I actually counted the number of children I saw. I got to five—and I was on the road for six hours each day. So as an investor, it makes no sense [to be there]. How can you invest an area where the population is declining?”

The state of Western Europe was just one of the many topics Zell—founder and chairman of Equity Group Investments LLC, chairman of the Tribune Company and founding donor of the Zell/Lurie Real Estate Center here at Wharton—addressed during a wide-ranging conversation on campus on Oct. 5. Speaking with Wharton real estate professor Peter Linneman, Zell offered his thoughts on former Secretary of the Treasury Henry Paulson, the state of the U.S. economy and, maybe most interestingly, his favorite place to do business.

That place?


And he gave the audience six reasons why.

“One, they’ve got 180 million people, and two, they’re growing at about 6 percent per year,” Zell said. “Three, they’re energy self-sufficient. Four, they’re food self-sufficient. Five, they’ve elected a leftist and yet we like him. And lastly—and this is an element that doesn’t get talked about—they actually have an executive class.”

According to Zell, the presence of that executive class—a deep well of talented, sharp, fourth- and fifth-generation business leaders—gives Brazil a distinct advantage over the other BRIC nations. It’s a place where not only are business opportunities plentiful, but business partners, too.

“The problem we’ve had with China is that we’re dealing with the first generation of entrepreneurs,” Zell said. “These guys have managed to overcome everything and become [successful]. So they’re sure they’re right. They’re stubborn, and dealing with them can be very difficult. In Brazil, you’ve got the fourth or fifth or sixth generation of leaders. You’ve got an enormous amount of educated, talented managerial skill, and that allows your investment to really grow.”

The ever-opinionated Zell also touched on the following topics.

On the economic downturn: “I think the U.S. economy is slowly extricating itself from a giant scare. Although I do think [while] the recession or the depression or whatever you want to call it was extremely severe, what made it different from other recessions was that confidence played such a staggering role. The problems were as much a function as a failure of confidence as anything else.”

On Henry Paulson’s handling of the economic crisis last fall: “I think, first of all, that Paulson panicked. But even more damning is the fact that nobody responded to him. There wasn’t anybody in Congress or the White House or the academic world [who] was taking him on and saying, ‘What are you doing?’ … So much of it was that the confidence had been shattered. When the U.S. Treasury panics, so does every CEO in America. The results were predictable.”

On the roots of the mortgage crisis: “One of the great untold stories of the residential mortgage collapse was the degree to which there was fraud. … You have entire subdivisions in foreclosure, where you had $300,000 houses sold to [people] with $25,000 of income. That’s a joke. But stuff like that occurred all over the country.”