scripod.com
Alex Behring and Daniel Schwartz - Inside 3G Capital - [Invest Like the Best, EP.458]

Overview

Shownote

Highlights

Transcript

Chapters

Pins

Alex Behring and Daniel Schwartz - Inside 3G Capital - [Invest Like the Best, EP.458]

Invest Like the Best with Patrick O'Shaughnessy

Feb 10
Invest Like the Best with Patrick O'Shaughnessy

Invest Like the Best with Patrick O'Shaughnessy

Feb 10
OverviewShownoteHighlightsTranscriptChaptersPins

Shownote

My guests today are Alex Behring and Daniel Schwartz, Co-Managing Partners of 3G Capital. 3G has built one of the most distinctive firms in investing around a simple idea: there are only a handful of truly great businesses and even fewer great CEOs. Their...

Highlights

In this episode, Patrick O'Shaughnessy sits down with Alex Behring and Daniel Schwartz, Co-Managing Partners of 3G Capital, to explore the firm’s distinctive philosophy and operating discipline—forged over decades and rooted in deep operational engagement, long-term ownership, and unwavering standards.
02:47
3G Capital builds a distinctive investment firm by concentrating on one investment per fund and acting as operators
04:03
They prefer to be patient and invest in one great business at a time, sending their best people
08:26
Businesses must own the relationship with end-customers to avoid disintermediation
11:23
Partners have both investing and operating experience, which helps in better investing and value creation
13:41
David rolled his shares into the transaction and became their partner
17:11
Hunter Douglas has strong customer relationships, diversified customers and suppliers, and is well-positioned in the $70 billion window coverings industry
21:34
Staying relatively small helps attract top investment talent by offering founder-like economics and a faster path to partnership
24:01
On-board computers ranked engineers on fuel and safety, driving a 30% increase in production and fuel efficiency
29:42
Zero-based budgeting gives cost visibility to everyone
30:26
Good employees thrive on freedom, problem-solving, challenges, and decision-making
31:55
A Bloomberg article titled 'Burger King is run by children' threatened to derail the Tim Hortons deal during final negotiations.
40:12
Franchisees in Canada were key stakeholders whose concerns were alleviated by transparency and assurances of no repeat of past missteps
40:39
Warren Buffett assesses business quality instantly and possesses encyclopedic business knowledge
47:55
Urgency in execution is critical across startups and mature businesses
50:26
It's impossible to make everyone happy with compensation, so one should act meritocratically and explain decisions
59:58
No one proposed a billion-dollar value for Burger King; estimates were around $20–30 billion
1:00:20
The Burger King deal yielded a 25-times return
1:03:17
Burger King built a €2 billion business in France with partner Olivier Bertrand using a master-franchise joint venture model
1:06:27
Significant portions of the Kraft portfolio were commoditized and exposed to competition from private-label and big retailers
1:09:09
Skechers is the third-largest sneaker company globally, generating $9 billion in annual sneaker sales
1:16:10
One truly understands a business only after owning it
1:17:55
ZBB is not a fix for a lousy business—it only makes it slightly more profitable
1:24:21
A business that took share by building a tech platform is a great example
1:25:24
3G hopes to be known as a great long-term home for founder-led and family-controlled businesses
1:32:01
They are motivated by loving their work, wanting the firm to have a long-term existence, and seeing younger partners grow into more responsibility
1:33:42
The most common answer to 'What's the kindest thing anyone's ever done for you?' is someone making a bet on them before there was evidence.

Chapters

Welcome to Invest Like the Best
00:00
Episode Intro: Daniel Schwartz & Alex Behring
02:43
The “One Investment Per Fund” Model
04:03
Great Businesses Own the Relationship With Their Customers
08:22
The Unique Structure of 3G Capital
11:23
How a Transaction Takes Shape
13:36
Why Hunter Douglas Was Appealing
17:04
The Advantages of Staying Small
21:34
Alex’s Railroad Story
23:58
Ownership is Key
26:36
Centralize the What, Decentralize the How
30:26
The “Burger King is Run by Children” Story
31:55
Negotiating with Tim Hortons
34:21
Never Compromise on Quality
40:39
Talent Over Tenure
42:01
3G’s Operating System
50:26
When a Brand is Bigger than the Business
57:14
Why Burger King Was Undervalued
1:00:17
The Beauty of the Franchise Model
1:03:15
Kraft Heinz: A Case Study in Concentration Risk
1:06:24
Skechers: Great Product Meets Great Distribution
1:09:07
Finding Forever Businesses
1:16:07
Zero-Based Budgeting & When It Works
1:17:52
The Current State of Capital Markets
1:21:10
Misconceptions About 3G
1:25:23
The Power of Patience
1:32:01
The Kindest Thing
1:33:39

Transcript

Patrick O'Shaughnessy: Most software companies try to maximize your time on their app to juice engagement. Ramp does the exact opposite. Ramp understands that no one wants to spend hours chasing receipts, reviewing expense reports, and checking for policy ...