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What This Ex-Wall Street Trader Who Went From 'Zero To $200M' Is Investing In

This article is more than 6 years old.

If lightning strikes twice on the financial markets after the last crash you could do worse than listen to an American business maverick who built up a real-estate business in eastern Europe from the 1990’s into the noughties. He’s the man who liquidated his business empire just a week before 2008’s financial crisis and retired at 49.

Today Paul Oberschneider, who was born in the Midwestern town of Roselle, Illinois, and grew up in a small rural farming community, is getting back into business from his base in Oxfordshire, England, after turning his life around post his high-flying Wall Street trading days and selling his property empire for an estimated $200 million (m).

Dubbed the ‘Start-up CEO’ these days, it wasn’t ever thus for the property maverick and former volatility options trader who started out as an options clerk at the Chicago Board of Trade (CBOT), one of the world's oldest futures and options exchanges established in 1848 that is part of CME Group. Before long he got promoted to options clerk and eventually a market maker.

After five years plying his trade in Chicago, an opportunity arose to move to New York to work as a trader for businessman and record-setting aviator Steve Fossett, and as a futures and equity options trader. Later in 1986 he joined the investment team for Shearson Lehman Brothers on Wall Street.

Then in around 1993, after what Oberschneider acknowledged was an alcohol-fuelled addiction and nights of clubbing at haunts like Studio 54 and the Kit Kat Club amongst other hot Manhattan night spots, he lost his job and ran up a mountain of personal debt before moving to Tallinn, the capital of Estonia. From here he gradually built businesses under the radar in the Baltic country and thereafter throughout central and Eastern Europe.

“It was a pretty dark place for me after I lost my job,” he said reflecting to Forbes on that period. “I didn’t know what I was going to do…frankly I just wanted to crawl under a rock.” He managed though to sort himself out - moving from New York to Connecticut - going into a recovery program to curb his alcohol addiction and then started to take on manual jobs.

Recalling his days as a trader in New York he said: “Anybody who is in that business has pretty much got a ‘Type-A’ personality and a bit of a compulsive/aggressive nature…or you don’t survive.” According to the theory, Type A individuals are described as being ambitious, outgoing, rigidly organized and highly status conscious - and often high-achieving workaholics.

Paul Oberschneider, U.S.-born property entrepreneur and 'Start-Up' CEO. (Source: Danske Bank).

(Source: Danske Bank).

The Wild East

Oberschneider noted on his initial time after arriving in Estonia in the early 1990s: “Back then in it was very much the ‘Wild East’ and guys were carrying guns around. Everybody seemed to be doing things…like starting banks and insurance companies. I managed to get into their crowd and before you knew it I stayed and never came back. Still at the beginning I was living in some terrible places and got to know conditions of Soviet squalor.”

His journey since that point has been nothing if not colourful - and for a number of reasons. It has centred on being in the right place, at the right time and seizing opportunities. Now after a period of self-imposed retirement he is planning his next investment forays in Europe and beyond. A number of countries in Africa are on his radar.

The founder of the Ober-Haus Group, Oberschneider turned a three-week allowance of $400 after travelling from the U.S. to Estonia - ostensibly for a holiday and to delve into his family roots - into a business empire that would later be valued at over $200m over an eighteen-year period in central and eastern Europe. The rest is history.

Today, Ober-Haus Real Estate Advisors is the largest real estate agency operating across the Baltic region that includes property services spanning residential and commercial real estate services, property management, property and business valuation services.

The property maverick’s life story could be described as a testament to the spirit of capitalism and entrepreneurship. It was thanks to a bit of serendipity, Oberschneider bumped into a young Russian named Sergei at a famous square in Tallinn, who made an unusual request.

The Russian asked the American if he could craft a business plan with the goal of securing a bank loan. Oberschneider drafted the document and Sergei got his loan. After that the word spread and soon the American of German-Baltic heritage had made more than $100,000 in a few short months writing business plans for a variety of individuals and entities.

From there he applied his capital and the skills he had into other investments spanning real estate development, financial services, hospitality as well as in retail and consumer product space.

Whilst pursuing these business activities he experienced a few hairy moments such as being held up at gunpoint by Russian gangsters who threatened to shut his business down. After throwing a chair at the wall of his office and telling them to get out of his office he was never bothered again. That said, he also experienced bombs blow up near him and had friends killed - one shot in St Petersburg and another in Tallinn.

A Strategic Approach

He is a firm believer in having a strategic and tactical approach to doing business. But as well as crediting much of his success to being at the right place at the right time, he says his life was turned around and invigorated by giving up the demon alcohol.

Having sold his business within a week or so of the onset of the financial crisis to investors including a Nordic private equity group, he then decided to get back into business by becoming a private investor and mentor to founders of start-ups in the Oxford area in the UK. This is where he has lived for a number of years and calls base.

As he built up his businesses in Estonia, he then moved into markets in Latvia, Lithuania, Ukraine and Poland. And, one of the interesting things here is that he only spoke English out there.

On this approach he said: “This is actually the reason why my business was able to grow so fast. Had I spoken the local language(s) I would probably have tried to do everything myself - like most entrepreneurs do.”

He added: “However, because I didn’t have the luxury of doing that [speaking the local language] I had to hire people and delegate. So, the business grew quite rapidly because I couldn’t speak the language(s) and I had to hire people to be board. What seemed like a very clever idea was just a matter of circumstance.”

The business mushroomed over a 10-year period into a business empire that employed over 400 brokers operating in six countries, with Oberschneider having started from developing apartments to building a real estate business.

It expanded with a mortgage bank, hotels and then the final piece of the jigsaw in becoming shopping centre developers. The latter encompassed small shopping centre grocery stores through to ‘big box’ retail premises.

Around the period between 2006 and 2007 Oberschneider and his team, when they were on a building frenzy, everyone believed that the party would keep going with liquidity pouring into the market.

It was when he received a call from a Finnish private equity group who wanted to talk about buying one of his businesses that the “light went on”, he remarked. A week before the financial crisis hit Oberschneider had pretty much exited out of everything. “It was so lucky,” the entrepreneur acknowledged.

Business Tips & Uncontested Markets

As to some of the secrets of his success in business, the American said: “It doesn’t matter whether you are in Estonia or Ghana, you need to do something different. And, find a market space that is uncontested and an opportunity by either creating something new or disrupting things.”

He added: “In our particular case in Estonia and the Baltic states we were doing something brand new. However, unless you are the first one and in a special niche, I don’t see how you are going to compete. This is especially so if you are competing against the big private equity groups who have substantial amounts of money. So, you have to really ‘niche down’ and find what might be a different market - whether it be a service or a product - and brand it.”

Hustling, showing up and being out there is also a must. “You have to be there and got to show up first of all. A bit like Forrest Gump and be at the party,” he asserted.

New Investments

In 2010, the Oxfordshire-based entrepreneur who has played polo with his La Golondrinapolo team at the high-goal level in the Queens Cup and Gold Cup in the UK and tournaments in Argentina, invested in and took the role as Chairman of London-based healthy fast food retailer, Vital Ingredient, which comprises a chain of around twenty restaurants and offers bespoke salads.

Last year he sold out of his stake in this business in a management buyout deal involving private equity firm LDC (Lloyds Bank’s private equity group).

This year he is working with a team in Estonia and looking at a business project in the hospitality sector there, although specific details remain undisclosed for now.

As to the actual amount of capital that will likely be invested it is very much up in the air. But Oberschneider revealed to Forbes: “While I do know where all the money is, as of yet I don’t have anything concrete figure in monetary terms. I need to find the right opportunity and it’s always a mixture of my money and other investors’ capital.”

He explained further: “I’m the operator and the guy on the ground. I put these things together and structure projects in joint ventures with small funds…usually high-net worth individuals (HNWIs), family offices and private opportunity funds.”

Moving Into Africa

Elsewhere, the millionaire cited interest in Lagos, Ghana and Zambia. “I’ve made multiple trips down there to examine what is going on in these countries. I don’t have a particular idea other the venture(s) being real-estate based.” Now his focus is extending to include Kenya with a business trip in the pipeline.

As part of his foray in Africa to explore the market he is scheduled to participate in some speaking engagements. “There is a huge youth population and very entrepreneurial - right across Africa,” he noted.

Stockmarket Investment

Questioned on his stance towards the stockmarket and investing in equities, he remarked: “We’re in a stratosphere right now in terms of valuations and I just think we need to be careful. After all we’ve been in a bull market for 38 years and that’s a long time. The other point is that personally I don’t like investing in companies via the stockmarket as I have no control over what people [management] do.”

“One can invest your money in blue-chip stocks and companies in that segment are generally well governed,” he added. “That's perfectly fine and normal for many people, but you are going to achieve mediocre returns [largely] since everyone is doing the same thing. For me, I look for things that I can do myself. Consequently I’m not much of a stock market investor these days.”

In other recent endeavours, Oberschneider has penned a book, Why to Sell Tacos In Africa,  which not only chronicles his adventures over the past 25 years but “serves as a metaphor” for how young entrepreneurs should think about doing business differently and finding opportunities in uncontested or ‘blue sky’ markets. And, in relation to Africa and emerging markets he contended that the book has “a real place there” because people want help and advice.

It is envisaged that this could lead into developing more consultancy work and mentoring companies as a kind of “Start-Up CEO” to the brand.

Why to Sell Tacos In Africa’ contains 16 life-changing business strategies that can be used anywhere. Perhaps the most important question individuals need to ask themselves in this vein is ‘Where are you?’ in terms of what are you doing and what do you bring to the table in terms of a product or a service.

Or as Oberschneider puts it: “What specific circumstances are you in at this particular moment that differentiates you from other people.”

Explaining the rationale behind to the title he candidly said: “I’m not going to make a million dollars selling that book. But it’s a starting point for a discussion and contains practical things that I did, which hopefully people will get and say ‘OK, I can do that.” And, who knows perhaps you can too. Carpe diem.