Alex Behring is co-managing partner at 3G Capital, discussing the firm's track record and returns from their landmark acquisition of Burger King and expansion into Restaurant Brands International.
Insight
Behring: Most 3G Value Creation Came From Growth, Not Zero-Based Budgeting
“In spite of all the publicity the zero-based budget gets, the portion of that value creation that is directly associated with the efficiencies and therefore with the zero-based budget is small. I mean, frankly, the majority of that growth came from, again, the…”
Disclosure
Behring: 3G Capital uses single-deal funds where partners are largest investors
“If you were to compare and contrast the approach at Three G Capital with a more traditional private equity, Approach. I think the three main points I would make is one, we are the largest investors. We, the partners and affiliated entities are the largest inve…”
Disclosure
Behring: Kraft investment broke even, validating 3G's capital preservation floor
“Then we had the Kraft investment, which was merged with the Heinz investment, but it was a totally separate vehicle. That investment, we just basically got our money back. Wasn't a successful investment, but he validated a fundamental premise of ours, which is…”
Insight
Behring: 3G's model places a partner directly as CEO of acquired companies
“To the extent that the partners were able to acquire a good business, one of the partners would take a CEO role in that business.”
Insight
Behring: Burger King's business was significantly smaller than its brand
“The business of Burger King was significantly smaller than the brand. I mean, it turned out that I wasn't alone. So the brand was a much bigger thing than the business, which is a great opportunity, meaning of course there is growth of the brand, but growing t…”
Assertion Supported
Behring: 3G returned 130% of capital on Burger King IPO while keeping 70%
“We ended up going public in 2012, year and a half into this, mid-twelve, and this was a late 2010 closing, and between the dividend that was paid and the proceeds of selling quarter of the business or whatever that was, we returned a 130% of capital, give or t…”