Join Alex Behring and Daniel Schwartz, Co-Managing Partners at 3G Capital, as they unravel the staggering success behind the Burger King buyout. They explore how a $1 billion investment blossomed into $28 billion, highlighting their operational strategies and investment philosophy. The duo discusses their innovative approach with zero-based budgeting and the pivotal role of leadership in creating value. Their insights reflect on the complexities of the franchise model and how strong partnerships foster growth in the fast-food landscape.
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insights INSIGHT
Extraordinary Returns
3G Capital’s Burger King buyout generated extraordinary returns over 14 years.
Turning $1 billion into $28 billion, with annual dividends around 70% of invested capital.
question_answer ANECDOTE
Beer Empire
3G Capital's founders built the world's largest beer company through mergers and acquisitions.
Starting with Brahma in 1989, they formed AmBev, InBev, and finally AB InBev.
insights INSIGHT
Owner-Operator Model
3G Capital replicates a long-term, owner-operator model.
Alex Behring brought this model from Brazil, focusing on long-term value creation.
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3G Capital’s buyout of Burger King may be the most successful private equity deal you’ve never heard about. Over the last fourteen years, or the length of a typical private equity fund, 3G turned a $1 billion investment into $28 billion in value. The annual dividends from the investment accruing to 3G today are around 70% of its invested capital. The deal is one of the highest earning buyouts ever. 3G is an organization with a storied history. Founded by Jorge Paolo Lemann, Carlos Alberto Sicupira, and Marcel Herrmann Telles, the group created an owner-operator model of investing. They rose to prominence through building the largest beer company in the world, initially buying local brewer Brahma in 1989, expanding it and merging with a competitor to become AmBev in 1999, merging with Interbrew to become ImBev in 2004, and taking over Anheuser Busch in 2008 to become AB InBev. Twenty years ago, Alex Behring, a young star on their team, moved to the US to form 3G Capital and take the approach abroad. Burger King was the second largest hamburger fast food chain after McDonalds in 2010 when 3G took it private. What it accomplished since then has been extraordinary. My guests to discuss 3G and the deal are Alex Behring and Daniel Schwartz. Co-Managing Partners of 3G Capital. Our conversation covers the history of 3G, Alex's journey to form 3G Capital, and the 3G playbook. We then dive into the deal, covering the sourcing and deal dynamics, improving operations, growing the business, taking the company public unexpectedly, and reloading to buy Tim Horton’s, Popeye’s, and Firehouse Subs. Today’s Burger King is part of Restaurant Brands International (QSR), a public company with a $32 billion market cap and $50 billion enterprise value. This classic deal will widen your aperture on what’s possible with a long-term, compounding holding period and operational excellence.
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