“I somehow managed to land a meeting with George Soros, a very rich man. We
talked for an hour or so, and then he asked me how much money I thought I could
handle. I told him I could manage $10 million, and he said ‘Okay, no problem!’”
That’s how Eduardo Sergio Elsztain, among the leading businessmen in Argentina
and the Jewish world, described the moment – when he was a young man in 1990 –
that changed his career.
“He knew when to sell and when to buy,” Soros,
who is among the world’s most important investors, explained regarding his
decision to invest $10m. in that first meeting in New York with a
30-year-old, inexperienced and completely unknown Argentinean Jew.
it is already clear that Soros’s intuition did not lead him astray. The decisive
Elsztain, who inherited a stock foundation – while a student at Buenos Aires
University – from his grandfather called IRSA, valued at $120,000, and turned it
into an empire, kept his promise. And much more.
Since that fateful
meeting with Soros, Elsztain’s leap from utter anonymity to Argentina’s business
elite was relatively quick.
In four years, the kippa-wearing youngster
from Buenos Aires managed to leverage his first investment from Soros to raise
$110m. and acquire office buildings and shopping centers in Argentina, including
the Alto Palermo Shopping Mall.
Today, the Alto Palermo – which
specializes in acquiring shopping centers – is valued at about half-a-billion
dollars, and in all of Argentina there is no self-respecting businessman who does
not know IRSA and the name of the wealthiest Jewish businessman in the country
today: Eduardo Sergio Elsztain.
ELSZTAIN TODAY stands atop Argentina’s
largest business empire, the country’s leader in real estate and agriculture,
which he built with his own two hands. His businesses include malls, hotels and
many real estate properties, the largest beef and agriculture businesses in
Argentina, gold mining businesses, banking businesses and private and public
His holding company IFISA owns IRSA in the real-estate sector,
Cresud in the agricultural sector, the Hipotecario bank and 68% of Astral Gold –
among many others.
Elsztain recently made his first substantial
investment in Israel, signing an investment deal in September 2012 totaling
$100m. with Ganden, the private- holding company controlled by Israeli
businessman Nochi Dankner.
Ganden controls the largest business group in
Israel, IDB Holdings, whose portfolio includes a variety of leading companies,
including Cellcom, Shufersal, Clal Insurance, Makhteshim Agan, PBC and Given
Imaging. IDB also holds a 2.3% stake in the Swiss Bank Credit Suisse, ownership
of the HSBC Tower in New York and other properties in the US, Europe and
Elsztain has known Dankner for a decade, though since the intensive
negotiations the two have held over time in Tel Aviv, New York and Buenos Aires,
their business relationship has also become a personal
Elsztain invested $25m. in Ganden in the first stage,
amounting to 10% of the company. At the same time, he received an option through
the end of February 2013 to expand his holding in Ganden to 30% with an
investment of another $75m., to total $100m. The deal values Ganden at over one
Elsztain’s fulfilling the option would help Dankner and
Ganden to direct serious capital toward the group’s parent company, IDB
Holdings, which is in the midst of negotiations with its bond holders over plans
to strengthen its financial status. Beyond that, if Elsztain exercises his
options on Ganden and IDB resolves its problems with its debt holders, he could
become – with Dankner’s partnership – one of the most important businessmen not
only in Argentina, but in Israel too.
ELSZTAIN’S GRANDFATHER, Isaac
Elsztain, founded IRSA in 1943. Isaac immigrated to Argentina from Russia in
1917, after the Russian Revolution, purchased some properties in Argentina, and
during World War II, founded IRSA as a real-estate company. Since the major
economic crisis in Argentina, in the 1980s, which put IRSA into financial
difficulties that left it essentially inactive, the company has seen brighter
days, and rose to become one of the prominent real estate firms in
The company’s management change, from Elsztain’s grandfather
to him, took place in the first half of the 1980s, right after Elsztain returned
to Buenos Aires from a volunteer year in Israel. Eduardo, who was born on
January 28, 1960, was just 21 in 1981 when his uncle, who managed IRSA, died,
and his grandfather asked him to revive the company that had become a financial
corpse, a task which was not easy in the context of the Argentinian economy.
Elsztain required financial assistance from his Jewish-Argentinian friend,
Marcelo Mindlin, in order to raise $120,00 to acquire IRSA
Eduardo had to put in five years of hard work before the company
began to turn a profit. In 1990, he received a significant push from Soros’s
investment, a move that profited both of them greatly. He knew very well how to
take advantage of this and the business opportunities during Argentina’s
economic recovery in the 1990s.
At the start of the 2000s, he already led
a flourishing company that owned hotels, offices and real estate properties
Today, IRSA’s portfolio includes commercial
centers, office buildings, housing projects and land in high-demand
In 2008, IRSA acquired Ilan Ben- Dov’s 35 percent share in The
Lipstick Building in New York on 53rd Street and Third Avenue, at a value of
$12.7m. In Argentina’s fiscal year 2011-2012, which ended in June, the company
took in $396m. with clean profits of $68m.
The company is traded on stock
exchanges in New York and Buenos Aires and its market worth is valued at $470m.
Elsztain, who heads the company as both chairman and CEO, holds over half of its
THE BUSINESS empire Elsztain built with his own hands did not end
in real estate deals. A significant company that he has controlled (37% of the
shares) and acted as chairman of since 1994 is Cresud, which is traded on
NASDAQ. In Cresud, too, which is considered the largest agricultural producer in
Argentina, Soros invested some $62m.
The market value of Cresud stands at
over $480m. and it owns agricultural farms, more than 4.8 million dunams of
land, flocks of cattle for beef and milk, and corn, wheat and soybean
In 2011, Cresud took in $636m. and its clean profits were $95m.
Elsztain acquired the company in 1994 for $25m., and by 1997 it already raised
$92m. in capital through the NASDAQ.
With the capital, the company
acquired more lands and herds.
Elsztain’s other major holdings include
the Argentinian bank, Hipotecario, the Argentinian credit card company, Tarshop,
and the gold exploration company in Australia and South America, Astral Gold. In
the government- controlled bank, where he is one of the major players in the
mortgage market, Elsztain’s IRSA controls 30% of the shares. Elsztain’s holding
company, IFISA, owns 68% of Astral Gold, most of whose activities today are
centered on gold mining in Chile.
ELSZTAIN DOES a great deal for the
Argentinian Jewish community, which he has led as the president of
He is known as a modest, pleasant man who shuns
In the past, he has also served as treasurer and “finance
minister” of the World Jewish Congress.
Elsztain is considered one of the
most significant investors in the Taglit- Birthright program, and he is the
founder and life-blood of Hillel in Argentina.
He customarily wears a
black kippa, is close to Rabbi Yoshiyahu Yosef Pinto from Ashdod, and on his
visits to Israel, makes a point of visiting the graves of the
During the recent economic crisis in Argentina, Elsztain
served as his country’s unofficial emissary in the Jewish world, and through his
standing in the World Jewish Congress, handled Argentina’s business in
international institutions to gather funding for his country’s economic recovery
Today, he is a leader in Endeavor, an international nonprofit
organization that supports entrepreneurs in emerging markets.
plans for the future, it is worthy to note his interview with Calcalist in 2011,
when he was in Israel with the World Jewish Congress to discuss the future of
the Jewish nation, far before he knew he would go into business with Nochi
Dankner in a company controlling IDB.
“According to our strategy,” he
told journalist Asaf Levy, “we will continue to invest in two primary areas:
real estate and finance... Without revealing too much, I can tell you that our
company is planning to expand its global activities and not focus on South