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ECONOMY | 17-04-2024 13:18

Top Argentina CEOs to heap praise on Milei at Patagonia retreat

Elsztain will host president at exclusive Bariloche event; IRSA starting construction on biggest project in its history

Eduardo Elsztain is bracing for sales to suffer at his shopping malls amid triple-digit inflation that’s crushed consumer spending. Yet four months into Javier Milei’s Presidency, the real-estate mogul is more bullish on Argentina than ever. 

A former business partner of George Soros, Elsztain warned in his latest earnings release that fewer patrons are expected at his properties as Argentines’ buying power tanks. But he’s marching forward with the construction of multiple projects this year, including the biggest in his three decades at the helm of IRSA Inversiones y Representaciones SA. 

“I’ve been investing in the last few months — and I said it publicly — more aggressively than any other time,” Elsztain, IRSA’s chairman and chief executive officer, said in a recent interview with Bloomberg Editor-in-Chief John Micklethwait. “This is the time to invest in Argentina.” 

Elsztain will host Milei this week at his marquee retreat for the nation’s business elite, held each year at his luxurious Llao Llao Hotel in the iconic Patagonia city of San Carlos de Bariloche. 

Milei will arrive in the Andes fresh off a trip abroad to speak with arguably his most passionate and supportive fan base. From Elsztain to MercadoLibre Inc CEO Marcos Galperin and Globant SA CEO Martín Migoya, Argentina’s corporate brass has applauded the president’s austerity and pro-market measures since taking office December 10. They also cheered Milei’s meeting last week with Elon Musk. 

Even as major international companies — including Exxon Mobil Corp, HSBC Holdings
PLC and Clorox Co — are running for the exits, Elsztain and other local executives are all in on Milei’s plans to turn around the crisis-prone economy despite a long list of challenges, including annual inflation near 300 percent and another recession expected this year.  

For his part, Elsztain is breaking ground on the largest real-estate project in IRSA’s history, a 867,000 square metre (9.3 million square feet) mixed-use project in Buenos Aires City called ‘Costa Urbana,’ or “Urban Coast,” that will cost roughly US$1.8 billion. The company is expected to start construction this year on a separate mixed-use development in La Plata, the capital of Buenos Aires Province.

IRSA’s New York-listed shares are up about 40 percent from a year ago, outperforming the Nasdaq and S&P 500 indexes. 

In his personal portfolio, Elsztain also says he’s been buying Argentina’s sovereign dollar bonds, which have handed investors some of the best returns in emerging markets since Milei’s victory in November. 

Galperin and Migoya’s tech companies, among the largest private-sector employers in Argentina, are both in the midst of ambitious, multi-year hiring plans across Latin America. Migoya, who met Milei in Florida last week, echoes the sentiment of many CEOs by applauding the president’s austere approach to tackling the government’s chronic fiscal deficit, which is the root cause of the country’s many economic crises over the decades. 

Milei is “building his strength from a totally different perspective, from the fact — from doing things right — that’s how he’s building his power and I think it makes sense,” Migoya said in an interview. “There’s a lot of things that as businessmen we need to do in terms of making it real.” 

Elsztain acknowledges that foreign investors aren’t quite as bullish on Argentina’s prospects under Milei as he and other members of the local business elite. That hesitation is a reality after years of debt defaults and false dawns. But he’s noticing a big change of pace and tone when investors knock on his door in Buenos Aires. 

“I’ve received in the last two months more people than I did in the last decade,” Elsztain said. “I get into the meetings, they don’t ask me anymore about Messi or Maradona, they ask about Milei. It sounds like a joke, but when they ask you about your president it means your president is saying something that resounds.”

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by Patrick Gillespie & Kevin Simauchi, Bloomberg

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