A Portfolio Built Around Durable Businesses
Equity Group Investments, backed by the family of late billionaire Sam Zell, owns a wide range of assets, including a John Deere dealership, a bluefin tuna fishery and a pedestrian bridge linking San Diego to Tijuana International Airport.
Although those holdings appear unrelated, the strategy behind them is consistent. EGI focuses on old-economy businesses that are less vulnerable to disruption from artificial intelligence and other fast-moving technologies, according to its president, Mark Sotir.
Long-Term Capital Shapes The Strategy
Sotir said EGI tends to invest capital for longer periods than most private equity firms. When the investment horizon is 10 or 12 years, the first requirement is choosing an industry that is likely to remain relevant over that full period.
That is why the firm is cautious about some technology and startup investments. Sotir said the issue is not a lack of interest, but the difficulty of forecasting where software or other fast-changing sectors will be a decade from now.
The Anti-AI Trade Gains Momentum
The strategy mirrors a broader Wall Street theme known as HALO, which stands for heavy assets, low obsolescence. The concept has gained attention as investors look for businesses with physical assets, durable cash flow and lower exposure to technological displacement.
Family offices are especially suited to this approach because they often invest across generations and do not face the same pressure as traditional private equity funds to exit within three to seven years. That patience can create opportunities in sectors that other investors avoid.
Tax Reform Adds A New Incentive
The renewed bonus depreciation provision in the “one big beautiful bill” law has strengthened the appeal of asset-heavy businesses. The rule allows companies to deduct the full cost of qualifying assets, such as machinery or vehicles, in the first year they are used.
Brian Hans of UBS said the change can materially improve after-tax returns. Family offices are increasingly evaluating investments with proactive tax planning, calculating not just headline returns but also the tax benefits attached to asset ownership.
Dealerships Offer Cash Flow And Protection
Auto and equipment dealerships are one area where family offices can benefit from both tax advantages and steady income. Joe Mowery of Stephens said these businesses offer a tax-advantaged income stream and can generate resilient cash flow through parts and service operations.
Although inflation can pressure vehicle and equipment sales, parts and service are often essential. Consumers and businesses still need repairs to keep cars, trucks and machinery operating, giving these businesses defensive characteristics even in weaker economic periods.
Geographic Moats Create Long-Term Value
Old-economy businesses are not immune to disruption, but some benefit from geographic or regulatory moats. EGI owns John Deere and Kenworth dealerships, where franchise terms limit the risk of another dealership of the same brand opening nearby.
Its bluefin tuna business in Baja California also benefits from barriers to entry created by fishing quotas. Sotir said economic uncertainty, tariffs and inflation are pushing more business owners to seek buyers. For family offices with patient capital, those pressures can create attractive entry points in agriculture, equipment, infrastructure and other asset-heavy sectors where value may take years to fully emerge.
