Investment Banking Entrepreneurship
Elad Epstein (WG ‘98) and his partners, Adam Breslawsky (WG
’98) and Nicole Schmidt, Esq. are perfect contrarians. While most other
financial advisory businesses were downsizing, the Oberon Group decided that
the market was ripe for an experienced team of bankers to offer bulge bracket
services to small and midcap companies.
Since inception, the group has grown to 12 professionals and has closed
a number of transactions in the last two and half years. Successes include a $75 million private
placement in the technology arena, the sale of a software training solution to
an overseas buyer, and the spin-off a successful office equipment division from
its parent.
Mr. Epstein started his career on Wall Street in 1994, as an Analyst with Oppenheimer & Co.’s Technology Investment Banking team. Upon graduating from Wharton, Elad joined Alex Brown as a member of the Financial Sponsor Coverage Group, and after Deutsche Banc bought Alex Brown, he became a member of the Mergers and Acquisitions group with Deutsche Banc Alex Brown. Having spent a number of years honing his business skill set on Wall Street, Elad believes that the logical culmination of his experience coupled with market timing was ideal to assume the next challenging business endeavor – the role of entrepreneur.
|
He founded The Oberon Group with a focus on helping entrepreneurs and their companies structure creative financial strategies, source capital and consummate mergers and acquisitions. It provides investment-banking services to both privately owned companies and publicly traded companies with market capitalizations below $500 million. Elad believes that Oberon was the logical outgrowth of several recent trends, which have radically reshaped the investment banking landscape. The last few years have been characterized by massive consolidation, leaving a significant void in the small and mid cap arena once dominated by firms such as Donaldson Lufkin Jeanrette, H&Q, Montgomery and Robinson Stephens. |
|
According to Elad, as some of these players were consolidated, the
weight of a larger infrastructure made it more difficult for them to focus upon
the smaller client base that they had once cultivated. Consequently, the erosion of banking
services available to smaller companies started before the bubble burst and
accelerated significantly once NASDAQ collapsed. Further, the bear market that began in April 2000 resulted in
massive layoffs at the bulge bracket level, leaving Elad and his partners ample
opportunity to hire top flight executives – in fact most of their employees are
Wharton alumnis with experience from top tier firms. These trends have seeded the ground for Oberon’s growth and
provided the ideal environment to attract and retain great clients and very
experienced Wall Street professional.
In June 2002, Oberon started an independent research
capability, branded Palladian Research, focused on delivering theme based
research reports to the buy side. This
research is a departure from traditional sell-side equity product as it
recommends actionable investment ideas by identifying major macro trends
impacting an industry or related industries.
Shortly after rolling out its research effort, branded Palladian
Research, questions began to arise as to conflicts between research and
investment banking at large Wall Street firms.
Fortunately, Elad and his partners had made the decision at Palladian’s
inception that Palladian would not provide research to any of Oberon’s
investment
banking clients in order to avoid such conflicts. Palladian quickly gained traction garnering nearly 40
institutional clients including Fidelity and Soros Funds since the first
product was launched in July 2002.
Given the desire to expand the business quickly, Elad and his partners
turned to a former colleague, Melissa Eisenstat (WG ’88) a high profile
sell-side technology analyst from Oppenheimer/CIBC World Markets, to run
Palladian.
“If you have to work 90 hours a week, its certainly more fun and personally rewarding when you are building something for your future” says Elad, as he labors on building Oberon in the current economic environment.