Eduardo Elsztain pores over a graph resembling a cardiogram during a heart attack. It shows how gross domestic product in his native Argentina has gyrated during successive crises over the past decades.
“The worst moments are here and here,” Mr Elsztain, one of Latin America’s leading real estate developers, says. Then he points to the depths plumbed in 2002 and 2008. “Now look what happens in the 12 months after the fall.”
His numbers show the country’s Merval stock index rallied 700 per cent in the years after the 2002 devaluation and 294 per cent after the 2008 financial crisis.
“Argentina has been volatile for 40 years and in every cycle we incorporate more assets,” Mr Elsztain, 60, explains. “So in one it was real estate, in another it was housing, in another it was shopping centres . . . It is about taking advantage of cycles.”
Such acumen helps explain Mr Elsztain’s success in building a multibillion-dollar property and agricultural empire that stretches far beyond Argentina across South America to the US and Israel.
Or as the financier George Soros put it, when asked by the Jerusalem Post why he had given Mr Elsztain $10m to invest in 1990 when the Argentine entrepreneur was barely 30: “He knows when to sell and when to buy.” (Mr Elsztain grew the value of Mr Soros’s cheque several times over).
Despite his prowess in buying and selling, Mr Elsztain is no swaggering trader. Dressed in a black suit and white shirt, with a long white beard and a kippah [skullcap] his style is sober and religious, an impression reinforced by the reverence with which he speaks of his hero, the late Jewish religious leader Menachem Mendel Schneerson, who persuaded him to switch from stock investing to real estate when they met in New York.
Like the late rabbi, Mr Elsztain’s ancestors hailed from eastern Europe; the property developer has just returned from a twice-yearly pilgrimage to Jewish religious sites in the former Soviet Union. “For me, it’s the best energy of the year and I have done this trip for the last 20 years,” he explains.
Mr Elsztain’s connection with Russia is not just religious; his first big real estate deal, at the age of 23 after dropping out from university, involved brokering the sale of two plots in Buenos Aires to the Soviet Union for a new embassy. To close the deal, he travelled to Moscow twice.
Another big influence was Isaac, his Polish-born grandfather who emigrated to Argentina in the 1920s and built a successful business. “They used to ask him: ‘Mr Isaac, how do you measure in times of high inflation how you are doing this year?’ and he said: ‘If I have one more apartment, one more hectare of farm, one more cow.’ He measured real assets.”
That faith in real assets is what sets Mr Elsztain apart from a generally gloomy business consensus in Buenos Aires. Argentina, he points out, has one of the lowest levels of property market debt of any country and although its government has $330bn of debt, its citizens have many billions stashed away in savings.
“In the end this money will rapidly return to the economy when you have new leadership,” he predicts.
Mr Elsztain is thoughtful and cautious. He dislikes bragging, ascribing part of his success to “mazal”, the Hebrew term for luck. “You can do the deepest due diligence, you can work endless hours to define an investment . . . but in the end there is a part which is a blessing,” he explains.
As a leader, he has always preferred to “delegate to the people who know. Perhaps I have a paternalist style, because the great majority of our managers have been with us more than 20 years.” His staff say he pays well and inspires through his personal example and religious beliefs: for example no member of staff, whatever their religion, works on Jewish holidays.
Not all investments have paid off. Mr Elsztain lost all the money he invested in an online shopping centre portal when it failed 20 years ago but he learnt his lesson: when he invested again in an online portal two years ago, he doubled his money and exited before it folded.
His horizons are long-term. As we speak, Argentina is mired in a deep recession with inflation rates of more than 50 per cent a year. Yet Mr Elsztain is optimistic.
“If you go down here to the convention centre,” he says, gesturing towards the window of his office. “There is not a single parking space free . . . people think the country is going through its worst moment but we have just had the biggest grain harvest in Argentina’s history.”
His main local vehicle IRSA is Argentina’s biggest real estate company.
Cresud, a Nasdaq-listed holding company controlled by Mr Elsztain, owns 62 per cent of IRSA as well as nearly 900,000 hectares of agricultural land in Brazil, Paraguay and Bolivia. IRSA’s portfolio extends to New York’s Lipstick building and to the troubled Israeli group IDB, one of the country’s largest conglomerates which has consumed about $580m in capital injections since he first invested seven years ago.
Israel is a notoriously difficult market for foreign investors but Mr Elsztain is unrepentant about his heavy investment there, despite difficulties which have included a regulator forcing him to divest an insurance subsidiary for what he considered well below market value.
“They have been the most amazing and challenging seven years of my 40-year business career,” he says of his investments in Israel. What has he learnt?
“Israeli justice works quickly, there is a culture of a lot of confrontation and litigiousness but also of keeping your word.”
He donates a substantial proportion of his income to charity, supporting Jewish, Catholic, environmental, entrepreneurial and social organisations. “We come with nothing, we leave with nothing, the rest is what we do in the middle and we try to do the best we can,” he says of his life philosophy.
Three questions for Eduardo Elsztain
Who is your leadership hero?
Rabbi Menachem Mendel Schneerson, Seventh Rebbe of Lubavitch. He was a most positive leader, and his influence marked generations of people who had the chance to meet him. Unlike other leaders I met in my life, the Rebbe did not gather people to show off his intelligence or knowledge: in those meetings he extracted from people the inner light they didn’t even know they had inside.
If you were not a CEO, what would you be?
Probably I would have devoted myself to painting or studying Torah more hours a day. But I have been a businessman since I was a teenager, so it is hard for me to imagine myself in a capacity other than business.
What was the first leadership lesson you learnt?
My grandfather Isaac had his office two blocks away from the high school I attended, so I visited him every day. He was a successful entrepreneur and one of the first things I learnt from him was: “If you are going to lose, lose fast. Let go; do not fight against the market. The sooner you admit your losses, the faster you´ll be back on your feet for the next battle.”