Dream Big - 3G Capital

Email: rbs@h1holdings.co.za

This podcast episode is a review of the book ‘Dream Big’ by Cristianne Correa, plus the long form article ‘Built to Own’ by Dom Cooke of Colossus, and the lessons I took from reading it.

This podcast is about how three young Brazilians started a brokerage in Rio de Janeiro and produced one of the most remarkable investment track records.

They were not from old money. They were not connected to the right families. They had no inherited network, no guaranteed clients, and no safety net if things went wrong. What they had was a simple, almost stubborn belief: that if you hired the best people, gave them ownership of the outcome, and ran a lean operation, you could beat anyone.

Their names were Jorge Paulo Lemann, Marcel Telles, and Beto Sicupira. Their firm is called 3G Capital. And the model they built is deceptively simple: find a great business, install a great team, implement rigorous cost discipline, give people real ownership, and then wait. Just wait. For decades if necessary.

In 2013 I read a book about 3G Capital called Dream Big, by the Brazilian journalist Christiane Correa for the first time. And I couldn't stop thinking about it and re-reading it. Not because of the scale of what they built — though that is extraordinary. But because of the simplicity. Three people. One philosophy. Fifty years of compounding. They built the largest beer business in the world starting with the Brahma beer business generating an IRR of 22% per annum over 37 years – better or equivalent to Berkshire Hathaway’s long-term compounding record.

And I kept asking myself: What is the equivalent of that for my business? What is our ‘Brahma’, the foundational investment that could define the next thirty years? And are we building the culture, the incentives, and the talent pipeline to make it happen?

This podcast is the result of that question. It's a biography of 3G Capital, the story of how they built what they built, why it worked, and where it didn't.

At the end I reflect on the 3G Playbook which is summarised below :

1. Dream Big
2. Hire the Best People. Reward and incentivise them on a meritocratic basis
3. Operational discipline with Zero Based Budgeting to emphasis frugality
4. Be patient and long-term in your investment views
5. Learn from the Best Mentors and Companies

Buy the book:

Amazon: Dream Big — Cristiane Correa

Built to Own. Dom Cooke, Colossus Magazine February 2026.

Introduction: Finding Your Brahma

Hello, my name is Reyburn Hendricks. I am the CEO of a renewable energy company based in Cape Town, South Africa, and I would like to welcome you to Read, Build, Succeed: Insights from Business History.

This podcast is for entrepreneurs, business builders, and organisations trying to do something new: people taking risks, building something better, and learning from those who came before. I read the biographies and histories of founders and builders, then share the lessons and personal insights I take from their journeys.

In 1971, three young Brazilians started a brokerage in Rio de Janeiro. They were not from old money. They were not connected to the right families. They had no inherited network, no guaranteed clients, and no safety net if things went wrong. What they had was a simple, almost stubborn belief: if you hired the best people, gave them ownership of the outcome, and ran a lean operation, you could beat anyone. Their names were Jorge Paulo Lemann, Marcel Telles, and Carlos Alberto “Beto” Sicupira. Over the next 50 years, that belief would produce one of the most remarkable investment track records in business history. Their firm became known as 3G Capital, and the model they built was deceptively simple: find a great business, install a great team, implement rigorous cost discipline, give people real ownership, and then wait. Just wait. For decades, if necessary.

I run H1 Holdings, an investment and energy business based in South Africa with start-up operations in Europe. In 2013, I read Dream Big by Brazilian journalist Cristiane Correa for the first time, and I could not stop thinking about it. I kept rereading it. It was not only the scale of what 3G built, although that is extraordinary. It was the simplicity: three people, one philosophy, and decades of compounding. Starting with Brahma, they helped build what became part of the world’s largest beer business. Some secondary accounts estimate that the Brahma investment generated exceptional long-term returns, although the precise IRR should be treated as an estimate rather than an official disclosed figure. I kept asking myself: what is the equivalent of that for H1? What is our Brahma: the foundational investment that could define the next 30 years? And are we building the culture, incentives, and talent pipeline to make it happen?

This episode is the result of that question. It is a biography of 3G Capital based on Dream Big, and it is a story of how they built what they built, why it worked, and where it did not.

This is Finding Your Brahma.

Jim Collins and the Question of Enduring Greatness

The book Dream Big opens with a foreword by Jim Collins, author of Built to Last and other influential works on enduring companies. Collins explains how he first encountered Jorge Paulo Lemann in a Stanford classroom in the early 1990s, during a discussion about what it takes to build a great company that lasts beyond any single leader. At the time, Collins did not know who Lemann was. A Brazilian MBA student later explained that Lemann, Marcel Telles, and Carlos Alberto Sicupira had built Garantia from a small brokerage into one of Latin America’s great investment banks. The student added that they were now “in the beer business”. That sounded improbable. Investment bankers building the world’s largest beer company seemed, at the time, almost delusional. Yet that is exactly what they did. Collins’ central question — what does it take to build an enduring great company? — became one of the deepest threads running through the 3G story.

The Origins of Jorge Paulo Lemann

The story begins with Jorge Paulo Lemann. He was born in Brazil to Swiss immigrant parents and received an elite education by Brazilian standards at the time. He was also a highly disciplined athlete, representing Brazil in tennis and developing the focus that would later define his business career.

His father died when Lemann was 14. He later attended Harvard and graduated in three years rather than four. From Harvard, he took two lessons that became central to his career: excellence in people and relentless focus. Lemann often said that having a big dream takes as much work as having a small dream. Harvard also reinforced the importance of choosing exceptional people and reducing everything to what is essential. Simplicity became a recurring theme in his life and in the businesses he later built.

His early career moved from Deltec in Brazil to a short stint at Credit Suisse in Zurich, which he found slow and hierarchical. He returned to Brazil and joined a brokerage called Invesco, which collapsed in 1966, taking his capital with it.

The collapse of Invesco taught him two lessons: watch revenues and expenses relentlessly, and reward good people properly even in unglamorous departments. As Lemann later put it, “the goalkeeper also has to gain a lot.” After Invesco, Lemann joined another brokerage, Libra, where he owned 26%. When he could not increase that shareholding, he was bought out. At 31, he was unemployed again, but this time he had capital, experience, and a clear ambition: he wanted control of his own business.

In 1971, he bought control of a small brokerage called Garantia. The Rio stock exchange fell sharply soon afterwards, making the beginning extremely difficult. But Garantia gave Lemann the platform to implement his ideas: meritocracy, ownership, cost discipline, and a relentless search for talent.

There was a particular kind of professional Lemann wanted: PSD — poor, smart, and with a deep desire to get rich. This became one of the hallmarks of the 3G model. Many of the executives who later built Brahma, AmBev, AB InBev, Burger King, and Restaurant Brands International came from this talent philosophy.

Garantia and the Birth of the 3G Culture

The model Lemann built at Garantia was explicitly influenced by Goldman Sachs before its IPO. Through a family connection, he learned about the Goldman partnership model and adapted it for Brazil. Garantia used open-plan offices, casual dress, limited hierarchy between partners and staff, and rigorous partner selection. To become a partner, people had to buy equity in the firm. That retained talent, aligned incentives, and prevented people from becoming too comfortable too early.

The culture was demanding. Good people rose quickly. Poor performers were removed. The annual “smoke signal” meeting decided who would leave the firm, and Garantia deliberately kept its headcount tight to make room for new talent. The idea of a comfort zone did not exist in Garantia’s vocabulary. It was at Garantia that Lemann met his two most important partners. Marcel Telles joined as a hard-working young employee and earned the right to buy a small partner stake within two years. Carlos Alberto “Beto” Sicupira, an entrepreneurial salesman who had sold jeans and used cars as a teenager, joined after meeting Lemann through their shared passion for spearfishing.That detail matters. Spearfishing requires patience, discipline, control, and the ability to wait for the right opportunity. The metaphor fits the 3G story remarkably well.

One of the key insights from this period is that meritocracy needs growth. Without growth, there are no new opportunities for talented people to prove themselves, no new problems to solve, and no expanding pool of rewards. Lemann understood that the engine had to keep turning.

In 1978, J.P. Morgan approached Lemann about combining to form an investment bank in Brazil. He resisted giving up control because he believed culture required control. The deal did not happen, but the conversation gave him the idea to expand Garantia from a brokerage into a full-service investment bank.

Lojas Americanas and the Control Lesson

In the 1970s, Lemann began thinking about buying undervalued companies and improving them operationally. Garantia initially bought minority stakes, including in companies connected to Havaianas and retail. These positions taught the partners about inefficiencies, governance problems, and executive remuneration, but they also taught a more important lesson: minority stakes were not enough.

In 1982, Garantia obtained control of Lojas Americanas, a Brazilian retail chain valued partly for its underlying property assets. Sicupira became CEO and deployed what would become a permanent part of the 3G playbook: know the people firsthand, identify talent, remove weak performers, control costs relentlessly, and learn from the best.Sicupira’s line on costs became famous: “Costs are like nails. They always need to be cut.”

He also wrote to leading global retailers asking to learn from them directly. One of the people who responded was Sam Walton of Walmart. Walmart became for Lojas Americanas what Goldman Sachs had been for Garantia: the benchmark to study, copy, and adapt. The returns validated the approach. Garantia bought control, restructured the business, separated property assets into a listed vehicle, and created significant value within months. More importantly, the experience confirmed another 3G principle: learn from the best rather than reinventing the wheel.

Brahma: The Foundational Investment

By 1989, Garantia was cash-rich, and Lemann was uncomfortable making large cash distributions to partners. He worried that too much cash would create complacency. He began looking for a new opportunity. Brahma, one of Brazil’s major beer companies, caught his attention. It had approximately 30% market share but was underperforming its main rival, Antarctica. The business had family shareholders, weak management, and significant room for improvement.

Garantia had been quietly buying shares in the market. When the opportunity came, Lemann moved to acquire control in October 1989. The price was about $60 million, roughly one-third of Garantia’s net worth at the time. It was a conviction investment. His reasoning was simple: tropical country, hot climate, strong brand, young population, poor management. That combination gave them everything they needed to transform the company. Brahma was very different from Garantia. Garantia had a few dozen people; Brahma had around 20,000. It had a pension deficit, old plants, high administrative expenses, top-heavy management, and inefficient distribution.

The solution was to transplant the Garantia culture. Management perks were removed. Offices were opened up. Headcount was reduced. Distribution practices were studied from the best operators, including Anheuser-Busch. Above all, cost discipline became systematic.

Zero-based budgeting was born at Brahma. Every expense had to be justified from scratch each year. Travel, meals, transport, technology, and administrative costs all came under scrutiny. Executives who missed targets lost bonuses, including the CEO. Training was equally important. The Brahma management trainee programme became legendary. By 2012, it reportedly attracted tens of thousands of applicants for only a handful of places. Brahma became the people machine that later powered AmBev, InBev, and AB InBev. The results came quickly. Within two years, revenues had grown, profits had improved materially, and the best employees received significant bonuses. Brahma validated the 3G operating model.

The Sale of Garantia and the Limits of Culture

At the same time that the partners were refining the playbook at Brahma, they were less present at Garantia. The investment bank had one of its best years in 1994, but that success contained the seeds of its failure.

Garantia began taking on more risk and suffered significant trading losses during the Asian financial crisis in 1997. The bank was sold to Credit Suisse First Boston in 1998 for approximately $675 million. One lesson is clear: culture may not be self-sustaining without continuous leadership. After the sale, the main partners focused on Brahma, Lojas Americanas, and GP Investimentos, Brazil’s first major private equity fund.

GP Investimentos and the Lessons of Private Equity

GP Investimentos was founded to transplant the Garantia-Brahma playbook into new companies. The results were mixed, and the experience produced several important rules.

First, no start-ups. The model works best where brands, distribution, and operating assets already exist. Second, do not invest where you cannot impose the culture. Third, focus is essential. The playbook requires top-quality people committed to a small number of businesses for long periods. This period also produced Alex Behring, who joined GP at 27 after meeting Telles and Sicupira at Harvard. At 30, he became CEO of América Latina Logística, a privatised Brazilian railway. He ran it for seven years, applying the Brahma and Garantia playbook through to its IPO in 2004. The results were extraordinary: margins reportedly grew from 6% to 40%, and equity value increased many times over. Behring became the operator who could take the 3G model into the United States.

From Brahma to AB InBev

Around 1999, the partners began to pursue Brahma’s big dream: becoming the largest brewer in the world. The first step was Antarctica, Brahma’s main Brazilian competitor. In 1999, Brahma and Antarctica combined to create AmBev. The cultural integration was difficult because the two companies had very different management styles, but over time the Brahma culture won.

In 2004, AmBev merged with Belgium’s Interbrew, owner of brands such as Stella Artois and Beck’s. Although the nominal structure suggested Interbrew was acquiring AmBev, the 3G-aligned managers soon became central to the combined company. Carlos Brito, whose MBA Lemann had helped finance, became CEO of InBev within a year.

The same operating playbook followed: fixed salaries were cut, variable performance pay was introduced, perks were removed, individual offices were abolished, and executives unwilling to adapt left.

Then came the 2008 acquisition of Anheuser-Busch for approximately $52 billion, completed in November 2008 in the middle of the financial crisis. The deal required enormous debt financing. After closing, the incentive structure was rebuilt around rapid deleveraging and operational integration.

The beer story, from Brahma to AB InBev, deserves far more time than this summary allows. But the important point is that the operating principles remained consistent: dream big, recruit and promote the best people, build an ownership culture, apply zero-based budgeting, and use ambitious goals as magnets for talent.

3G Capital in the United States

A few months after the AmBev-Interbrew transaction, the partners established 3G Capital in the United States, with Alex Behring as the operating head. The firm initially took smaller stakes in listed U.S. companies, including a position in CSX alongside The Children’s Investment Fund.

That strategy again proved insufficient. Without control, 3G could not impose its culture or drive the operational change it wanted. The firm therefore pivoted to control acquisitions.

3G Capital was also designed differently from GP Investimentos. It used a one-deal-per-fund structure, raising deal-specific capital from a small group of investors close to the partners. There was no pressure to deploy capital simply because a fund clock was ticking. Deals happened only when the right opportunity appeared.

Burger King and Restaurant Brands International

The first major U.S. control deal was Burger King. 3G announced the transaction in September 2010 and completed the acquisition in October 2010 for approximately $4.0 billion, including the assumption of outstanding debt.

Burger King had cycled through multiple owners and CEOs, but 3G saw a brand that would not die. The playbook was applied immediately: staff were interviewed, executive floors were replaced by open-plan offices, the corporate jet was sold, suits disappeared, and performance dashboards were linked to the company’s five main objectives.

But Burger King also shows that 3G was not only about cost cutting. The key operational insight was to align incentives with franchisees and shift the estate away from corporate-owned stores toward strong franchise operators. New restaurant openings accelerated materially. In 2012, Burger King returned to the public markets through a transaction with Justice Holdings, a London-listed investment vehicle associated with Bill Ackman and other investors. In 2014, Burger King combined with Tim Hortons to form Restaurant Brands International, and in 2017 RBI acquired Popeyes Louisiana Kitchen. The returns appear to have been exceptional, although precise fund-level performance is not publicly disclosed in the same way as listed-company financial results. For publication, it is safer to describe the Burger King investment as a highly successful long-duration investment rather than presenting a precise IRR as fact.

Kraft Heinz and the Limits of the Model

In 2013, 3G and Berkshire Hathaway acquired Heinz. The initial operating results were strong, and margins expanded significantly. In 2015, Heinz merged with Kraft, again with Berkshire as a co-investor.

The Heinz investment appeared highly successful in the early period. The problem came with Kraft. 3G failed to fully underwrite the structural quality of Kraft’s brands, including whether they had genuine pricing power and consumer loyalty. Many of those brands turned out to be weaker and more commoditised than expected. Customer concentration was also too high, with large retailers such as Walmart and Costco holding significant bargaining power. The lesson is that the 3G model requires genuine consumer brand moats, pricing power, and room for operational improvement. Without those, cost discipline can become downward pressure rather than a source of renewal.

After Dream Big: The Story Continues

The Dream Big book ends before the full 3G Capital story does. Since then, the firm has continued to invest, including completing the acquisition of a controlling stake in Hunter Douglas in 2022 and announcing the acquisition of Skechers in 2025. Over time, we will likely learn more about how the 3G playbook adapts in those businesses. It is also notable that 3G has brought experienced external leadership into Restaurant Brands International, including senior executives with deep operating experience in global restaurant businesses. That suggests the model is still evolving.

The 3G Playbook

The phrase “3G playbook” is my own shorthand, but the principles are clear from the story.

First, dream big. A large ambition gives talented people something worth organising around. This is very similar to Jim Collins’ idea of the BHAG — the big, hairy, audacious goal. Second, meritocracy needs growth. Growth creates new problems for talented people to solve and new opportunities for them to prove themselves. Without growth, the culture that attracts ambitious people begins to collapse. Third, control matters. Minority stakes do not allow the firm to impose culture. 3G repeatedly learned that operational transformation requires control. Fourth, people are the system. 3G looked for PSD people — poor, smart, and with a deep desire to get rich. It backed young people early, gave them large responsibilities, and aligned incentives through variable compensation and equity ownership.

Fifth, frugality is cultural. Zero-based budgeting was not treated as a temporary restructuring tool. It became a permanent management discipline. As Carlos Brito has put it, the culture is frugal, not cheap. Sixth, investment selection is narrow. 3G’s best results came from large, established, consumer-facing businesses with strong brands, distribution systems, operational inefficiencies, and genuine pricing power.

Seventh, learn from the best. Goldman Sachs was the model for Garantia’s partnership culture. Walmart was a benchmark for Lojas Americanas. General Electric influenced people management practices. Warren Buffett became both a partner and a reference point for long-duration, moat-based investing.

Process Power and the 7 Powers Lens

One useful way to think about 3G Capital is through Hamilton Helmer’s 7 Powers framework. For 3G itself, the most important power is process power: a codified owner-operator system built through decades of internal experience. That process power includes meritocracy, equity ownership, zero-based budgeting, frugality, talent development, focus, and the ability to apply a tested operating model repeatedly. Helmer describes process power as one of the hardest forms of advantage to copy because it is built through accumulated practice rather than assembled from external components.

The companies 3G invests in need their own sources of power. In AB InBev, the strongest powers are scale economies and branding. Global beer benefits from scale in procurement, brewing, distribution, and marketing, while brands such as Budweiser and Stella Artois support consumer willingness to pay.

In Restaurant Brands International, the same themes appear again. RBI is an asset-light franchisor where scale in marketing, supply chain, technology, and menu operations benefits the brands underneath it.

This is why Kraft Heinz matters as a cautionary lesson. If the underlying business lacks strong brand power, pricing power, or growth potential, then the 3G process can intensify decline rather than create renewal.

Closing Reflection: What Is Our Brahma?

Jorge Paulo Lemann is now in his eighties, but by most accounts he is still involved, still paying attention, and still asking the same question of the people around him: are you the best you can be? That is what I keep coming back to in the 3G Capital story. It is never only about beer, burgers, or ketchup. It is about a standard, a way of operating, and a belief that if you get the people right, keep the costs honest, and stay focused on one thing long enough, something extraordinary can happen.

The returns appear to be real, but the precise percentages should be treated with care unless supported by an original source. What matters most for this story is the pattern: discipline repeated year after year inside a culture that refused to forget what it believed in.

And yes, 3G got things wrong too. Kraft Heinz is a reminder that cost discipline without growth discipline is just slow decay. Even the best models have limits. That honesty is part of what makes the story so useful.

I do not know whether H1 Holdings will ever become anything like 3G Capital. I hope so, but that is not really the point. The point is to keep asking the question: what is the one thing we believe in deeply enough to concentrate everything on?

What is the business we would hold for 30 years?

What are the people we would build a culture around?

What is our Brahma?

If this podcast has made you ask that question about your own business, your own career, or your own life, then it has done exactly what I hoped it would. Thank you for listening.