netnet Posted May 12, 2015 Share Posted May 12, 2015 I just read a book on 3G's founders and all I can say is that it is no surprise that Buffett and Munger like them. Hard charging, fair and fairly ruthless business builders. They keep their word and make their partners and employees a lot of money. (Enriching your employees and giving them equity was unheard of in Brazil.) The book, Dream Big is a breezy and a bit uncritical. ( Also the translation is pretty weak, e.g. sales point instead of store or store location.) but it conveys a sense of the evolution of the companies and the founders, which is, given Brazil's business culture, fairly remarkable. (I love Brazil, but the business culture was unbelievably hide bound. And in building their businesses they violated virtually every custom and rule during a time of unbelievable inflation.) Link to comment Share on other sites More sharing options...
Liberty Posted May 19, 2015 Share Posted May 19, 2015 Thanks for the reminder, that book has been on my to-read list for a while but I still haven't got to it. I'll bump it up :) Link to comment Share on other sites More sharing options...
oddballstocks Posted May 19, 2015 Share Posted May 19, 2015 I just read a book on 3G's founders and all I can say is that it is no surprise that Buffett and Munger like them. Hard charging, fair and fairly ruthless business builders. They keep their word and make their partners and employees a lot of money. (Enriching your employees and giving them equity was unheard of in Brazil.) Sounds like these guys are very innovative. I've never heard of hard charging or ruthless private equity guys in the past who are solely focused on making partners money... Link to comment Share on other sites More sharing options...
mjohn707 Posted May 19, 2015 Share Posted May 19, 2015 Enriching your employees and giving them equity was unheard of in Brazil. Have you ever heard of Maverick by Ricardo Semler? It was about his family company, the Semco Corporation, based in Brazil. It was published around the time that the 3G guys opened their partnership, and Semler talks about how bad the business environment was in Brazil in those days. Semler also started a profit sharing program for his employees which I suppose must also have been unusual for the time Link to comment Share on other sites More sharing options...
Guest longinvestor Posted May 19, 2015 Share Posted May 19, 2015 Profit sharing, actually raising ownership interest is a key ingredient for long term success. Notable names include: MSFT, SWA, INFY et al. Even amongst privately held companies, equity sharing is often utilized. I've an interest in studying ESOP's as a business transition model. Heard of some successes here. Link to comment Share on other sites More sharing options...
ATLValue Posted May 19, 2015 Share Posted May 19, 2015 Enriching your employees and giving them equity was unheard of in Brazil. Have you ever heard of Maverick by Ricardo Semler? It was about his family company, the Semco Corporation, based in Brazil. It was published around the time that the 3G guys opened their partnership, and Semler talks about how bad the business environment was in Brazil in those days. Semler also started a profit sharing program for his employees which I suppose must also have been unusual for the time I think I just heard a Ted Talk from him that was really interesting: I'm working at an extremely bureaucratic company right now (run by some old GE folks) and it really resonated with me. As a side note, never invest in GE. Link to comment Share on other sites More sharing options...
Guest Schwab711 Posted May 20, 2015 Share Posted May 20, 2015 I just read a book on 3G's founders and all I can say is that it is no surprise that Buffett and Munger like them. Hard charging, fair and fairly ruthless business builders. They keep their word and make their partners and employees a lot of money. (Enriching your employees and giving them equity was unheard of in Brazil.) Sounds like these guys are very innovative. I've never heard of hard charging or ruthless private equity guys in the past who are solely focused on making partners money... You got a real lol out of me. Link to comment Share on other sites More sharing options...
fareastwarriors Posted December 16, 2016 Share Posted December 16, 2016 3G Capital Is Expected to Be in a Buying Mood in 2017 http://www.nytimes.com/2016/12/15/business/dealbook/3g-capital-is-expected-to-be-in-a-buying-mood-in-2017.html?ref=dealbook&_r=0 Link to comment Share on other sites More sharing options...
DooDiligence Posted December 16, 2016 Share Posted December 16, 2016 3G Capital Is Expected to Be in a Buying Mood in 2017 http://www.nytimes.com/2016/12/15/business/dealbook/3g-capital-is-expected-to-be-in-a-buying-mood-in-2017.html?ref=dealbook&_r=0 Azul? http://mobile.reuters.com/article/idUSL1N1DH2JE Crazier things have happened... Link to comment Share on other sites More sharing options...
kiwing100 Posted December 20, 2016 Share Posted December 20, 2016 Book review https://www.santangelsreview.com/2014/04/28/book-review-and-lessons-from-dream-big-a-glimpse-inside-the-strategies-and-tactics-of-3g-capital/ Link to comment Share on other sites More sharing options...
Gardener Posted January 13, 2017 Share Posted January 13, 2017 Book review https://www.santangelsreview.com/2014/04/28/book-review-and-lessons-from-dream-big-a-glimpse-inside-the-strategies-and-tactics-of-3g-capital/ Might be a book that I will put on the list. Thanks. Anyone perhaps knows where the money for their first takeover came from? Link to comment Share on other sites More sharing options...
KCLarkin Posted January 14, 2017 Share Posted January 14, 2017 Anyone perhaps knows where the money for their first takeover came from? If interested, read the book. "In July 1998, Lemann sold Banco Garantia to Credit Suisse First Boston for $675 million" -- wikipedia Link to comment Share on other sites More sharing options...
JayGatsby Posted January 30, 2017 Share Posted January 30, 2017 I just read a book on 3G's founders and all I can say is that it is no surprise that Buffett and Munger like them. Hard charging, fair and fairly ruthless business builders. They keep their word and make their partners and employees a lot of money. (Enriching your employees and giving them equity was unheard of in Brazil.) Sounds like these guys are very innovative. I've never heard of hard charging or ruthless private equity guys in the past who are solely focused on making partners money... They actually do have a pretty different style. They give young, relatively unproven managers a lot of power and the ability to make large amounts of money if successful. Theory being that the young managers have more drive than the old managers and they'll apply that with the right incentives. It may sound like commonsense, but most private equity firms do the exact opposite. There was a good businessweek article on the guys running Burger King... made the point that basically no other company of that size has a management team that young. Have this book on kindle and slowly working my way through it. Interesting guys, but not the greatest written book. Link to comment Share on other sites More sharing options...
fareastwarriors Posted January 30, 2017 Share Posted January 30, 2017 Buffett’s Go-To Billionaire Dealmaker Has Wall Street on Edge https://www.bloomberg.com/news/articles/2017-01-30/buffett-s-go-to-billionaire-dealmaker-has-wall-street-on-edge Link to comment Share on other sites More sharing options...
villainx Posted February 2, 2017 Share Posted February 2, 2017 Just an innocent question. From what I know of 3G, they are adept operators who know how to trim cost but have been less able to grow them. Partly this might be due to them buying companies that have lots of fat to trim and not a lot of room to grow. But when I think of other skilled managers or management philosophies (like Danaher), they cut cost and do things to innovate/grow, why aren't those types more attractive to Buffett? Or is PCP or BHE those type of companies? Link to comment Share on other sites More sharing options...
rb Posted February 2, 2017 Share Posted February 2, 2017 I think it's because it would be harder to integrate a Danaher into Berkshire. Operationally Berkshire is a bit of a mess. I don't know if it's such a good idea to integrate other mini Berkshires into it rather than than finance the acquisitions of elephants and let others to the dirty work - plausible deniability and all that. Link to comment Share on other sites More sharing options...
JayGatsby Posted February 2, 2017 Share Posted February 2, 2017 Just an innocent question. From what I know of 3G, they are adept operators who know how to trim cost but have been less able to grow them. Partly this might be due to them buying companies that have lots of fat to trim and not a lot of room to grow. But when I think of other skilled managers or management philosophies (like Danaher), they cut cost and do things to innovate/grow, why aren't those types more attractive to Buffett? Or is PCP or BHE those type of companies? Not sure that's 100% fair. They made their original fortune building a Brazilian investment bank from basically nothing to the biggest in Brazil. BK is growing. You're right that they seem to recently gravitate to businesses with steady revenue and outsized overhead. Link to comment Share on other sites More sharing options...
Dynamic Posted February 2, 2017 Share Posted February 2, 2017 I'm suspecting that they've learned to value more highly something that Buffett and Berkshire has demonstrated for a while, namely that although organic growth can be great if it provides a good return on retained earnings, it can be just as great to use the now-healthy cash flows from one business with little growth to fund the purchase of other businesses the offer the prospect of decent returns, and that this can equally achieve compounding of net worth at substantial rates. Link to comment Share on other sites More sharing options...
Guest longinvestor Posted February 2, 2017 Share Posted February 2, 2017 Just an innocent question. From what I know of 3G, they are adept operators who know how to trim cost but have been less able to grow them. Partly this might be due to them buying companies that have lots of fat to trim and not a lot of room to grow. But when I think of other skilled managers or management philosophies (like Danaher), they cut cost and do things to innovate/grow, why aren't those types more attractive to Buffett? Or is PCP or BHE those type of companies? Management philosophy=active central control. This takes the form of the likes of the Danaher Business System. I used to work there. It was all about cost controls. Buffett's dislike of active centralized management doesn't mean that keeping costs low is not already a priority at the subs. Tom Murphy, Kevin Clayton, Tony Nicely and surely others practice extreme cost controls by themselves. Marmon practices the 80-20 philosophy. After reading Cunningham's Berkshire beyond Buffett, I don't think that the next CEO will be in a position to institute such a system. It may take many subs running off the rails for Omaha to change to a hands on approach. Could happen. Link to comment Share on other sites More sharing options...
villainx Posted February 3, 2017 Share Posted February 3, 2017 Yeah, I would assume at the sub level that Berkshire managers are very 3G or DBS like. Just that the performance or approach aren't focused on nearly as much. I also might be too hung up on the cost cutting at the expense of innovation the press seems to be applying to 3G, plus 3G recent target industries aren't the easiest to innovate/grow. Link to comment Share on other sites More sharing options...
gfp Posted February 21, 2017 Share Posted February 21, 2017 The Economist's blog has a nice graphic display of 3G's companies and their profit margins over time, vs. peers, etc.. http://www.economist.com/blogs/graphicdetail/2017/02/daily-chart-17 Link to comment Share on other sites More sharing options...
gfp Posted February 22, 2017 Share Posted February 22, 2017 Financial Times has a nice behind the scenes article on what just happened with Unilever - (free to read for non-subscribers through CNBC) http://www.cnbc.com/2017/02/22/the-143bn-flop-how-warren-buffett-and-3g-lost-unilever.html Link to comment Share on other sites More sharing options...
gfp Posted April 10, 2017 Share Posted April 10, 2017 https://www.nytimes.com/2017/04/10/business/dealbook/warren-buffett-jorge-paulo-lemann-brazil-conference.html?_r=0 Link to comment Share on other sites More sharing options...
DooDiligence Posted April 10, 2017 Share Posted April 10, 2017 https://www.nytimes.com/2017/04/10/business/dealbook/warren-buffett-jorge-paulo-lemann-brazil-conference.html?_r=0 The perfect match for WEB since he doesn't like being "O cara empunhando o machado" Link to comment Share on other sites More sharing options...
gfp Posted April 11, 2017 Share Posted April 11, 2017 http://www.cnbc.com/2017/04/11/firm-with-ties-to-buffett-reportedly-considering-topping-jabs-bid-for-panera.html Article citing rumor that 3G is looking at potentially trying to outbid JAB on Panera. Seems unlikely given Buffett's friendship with Byron Trott, who likely put the JAB deal together for that family. But who knows - article also mentions that JAB and 3G principals invest in each others' deals, making a topping bid that much more unlikely Sources have told CNBC that the reports of 3G interest are untrue: http://www.cnbc.com/2017/04/11/firm-with-ties-to-buffett-reportedly-considering-topping-jabs-bid-for-panera.html Link to comment Share on other sites More sharing options...
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