Banco Garantia

"d)High margins Again, producing and selling FMCGs is a high-margin trade (when compared to pure retail, for example) and is forgiving to large amounts of financial leverage. e)Idiot-proof sectors Relative competitive advantages are not enough if the business sector is not structurally sound and structurally forgiving. The trio’s departure from investment banking— the sale of Banco Garantia—is very illustrative: they left behind a very high-maintenance business, where there’s little scalability, high market-risk exposure, and significant dependence on key personnel, to focus on FMCGs. They’ve…"

"The trio’s timeline 1971: Jorge Paulo Lemann buys the Garantia broker dealer in Rio, with financing from private individuals 1976: Garantia earns a banking license with the Brazilian Central Bank 1982: Garantia partners acquire a controlling stake in Lojas Americanas, a retailer. Beto becomes its CEO 1989: Garantia partners acquire a controlling stake in Cervejaria Brahma, a beer brewing company. Marcel becomes its CEO 1998: Banco Garantia is sold to Credit Suisse First Boston. Most of its executives won’t work with the trio anymore on a full-time basis (although many remain co-investors in many of their deals) 1999: Brahma merges with (i.e., buys) Cervejaria Antartica, forming Ambev, Brazil’s largest beer brewing company 2004: The trio enters an agreement with Belgian giant Interbrew’s controlling shareholders where the two groups become controlling shareholders of Inbev, the resulting company 2008: Inbev buys Anheuser-Busch, America’s most iconic brewery, on the brink of the subprime mortgage crisis, forming Anheuser-Busch Inbev, AB Inbev, for short 2010: 3G Capital, the trio’s private equity firm, does its largest deal to date, buying Burger King from another private equity fund…"