Buy Beloved Brands Run by Nobody

"[We look for] companies that are extraordinary in spite of those executives who’re in and out every three years, of not having owners for a number of generations. They have to have something: a strong brand, a distribution system, a franchise, something that enables them to survive and still be excelente. Usually, these companies are in boring sectors, that don’t carry the charm of Wall Street, of Silicon Valley... These companies don’t attract top talent anymore."

"Ever since their acquisition of Brahma, the trio had dreamed of owning Budweiser. It was not only the world’s largest brewery, but also had what was probably the world’s best portfolio of beer brands. To make it an even more attractive target, AB possessed a tripod of (1) meager financial and (2) operational results, as well as (3) diffused stock ownership."

"the trio believes their only really sustainable competitive advantage is their management style, they sought to chase growth by purchasing “mature businesses, with pulverized (and/or weak) ownership, strong, recognized brands and poor management,” where “external and internal owners could make a difference,” in the words of Marcel Telles. Acquisitions supplied top-line growth, and management turnaround supplied earnings growth, a combination that pleased ambitious employees and shareholders alike. Acquisitions enabled Antarctica—then AmBev and finally InBev—to export talented individuals to a number of M&A-created positions (the Brazilians secretly pride themselves in having “taken over” much of AB InBev’s management structure) around the globe. That is…"

"Many public companies with diffuse ownership, which they consider a huge handicap for company performance. Abundant and cheap debt leverage to finance their deals. Stable economic and political environments in which to base their companies, with significant geographic diversification of revenues and exogenous risk factors (inflation, interest rates, economic growth, geo-political risk, and so on)."