Fernando De Leon has made his fortune on real estate and business partnerships after he grew up across the border in Matamoros, Mexico.When Fernando De Leon realized a boarding service for dogs was charging almost as much as his $30 million hotel for humans, he spotted an opportunity.
“The private equity playbook involves overpaying for established businesses, using excessive leverage and then cutting costs quickly to flip a business in a prescribed timeline,” De Leon said in an interview from South Padre Island, Texas. “We build companies from the ground up, we don’t have any investors, we don’t have a timeline for selling or holding.
He went on to win a scholarship to Harvard University and then an investment banking job with Goldman Sachs Group Inc. in New York starting in 2001. But after getting a poor internal review, he started developing property in Dallas.That business has changed in the last two decades, with private equity and sovereign wealth funds crowding out smaller investors like himself, De Leon said. He now avoids bidding on most established property because he can’t compete on cost of capital.
“The manufacturing of housing is incredibly complex if done correctly,” he says. But if you have the ability to “take a piece of land that’s $10 million and build a $100 million housing complex, the Blackstones, the Starwoods of the world, will reward us very well for that.”. had huge paper profits after the company went public in a SPAC merger at a $4.3 billion valuation in 2021. But about a year later, amid plummeting crypto prices, it declared bankruptcy.