ABI Lemann Telles Article

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Lemanns legacyWhat you can and shall learn with Jorge Paulo Lemann, the founder of Banco Garantia and his inseparable partners, Beto Sicupira and Marcel Telles. Together, they built an empire of R$ 144 billion. In this process, they created a revolutionary corporative cultureBy poca Negcios At the end of the academic year of 1957, as usual at the American School of Rio de Janeiro, the students got together to choose the highlights of the year. Always in English, they elected the friendliest, the most artistic, and the cutest and so on. In the category "Most likely to succeed" (something like "with more chances to be well-succeeded"), two names were remembered. One of them, "Jorge Lemann". Portrayed at the class album as stylish, gleaned and dressed as a Casanova, Jorge Paulo Lemann, at the age of 17, is described as one of Enterpreneur Jorge Paulo Lemann the two veterans who studied since kindergarten at the American School. "Although it seems he never studies, he can in a 2005 photo . The Garantias always achieve envious report cards - mainly A's'with only a founder created an unique model pinch B's", says the Book of the Year. Good student without of management based on meritocracy efforts, the young Lemann took groans of his colleagues. "Over the years, Jorge has worked hard to achieve his reputation as seductive - a ladies' man -, and, as a true Brazilian, his interests (besides tennis and fishing with harpoon) are, going to the beach and watch people girls, that is." Lemann was known at the school for his extended traveling abroad and for his plans to go to college in the United States, preferably in Harvard. At the end of that year, students also prepared a "Class Prophecy", in which they tried to predict how their colleagues would be within ten years. It read: "Jorge Paulo Lemann, who recently won the 1967 World Tennis Championship, is winning headlines in the world of sports. Jorge, who manages an important factory network of canned goods in Brazil, is presently married to the 1967 Miss Universe . Rarely a teenagers game proved so prescient. Lemann reached the top of the worlds tennis ranking three times, in the veterans category. He was five times Brazilian Champion and represented not only Brazil but also Switzerland at Davis Cup. He did not even date the 1967 Miss Universe, the American Sylvia Louise Hitchcock, but married beautiful and elegant women twice: the psychoanalyst Maria de Santiago Dantas Quental, dead in April, 2005, and the Swiss Brazilian naturalized educator Susanna Lemann, owner of Matuet travel agency . With each one of them, he had two boys and one girl. He either owns a cannery, unless the definition of the category is broad enough to cover the billions of cans of beer and soda coming out annually from the production lines under his control. But

after graduating from Harvard, with an Economics degree, as planned, he reached a high point in the business world that even his colleagues from the American School did not imagine. Together with Marcel Telles and Carlos Alberto Sicupira, his business partners for more than three decades, Lemann holds 25% of the capital from the largest brewery in the world, InBev; he owns Holding Lasa, which groups Lojas Americanas and Blockbuster; the B2W group, virtual stores Submarino, Americanas.com, Ingresso.com, the teleshopping channel Shoptime; and So Carlos Empreendimentos Imobiliarios . The three are among the main shareholders of South Americas largest transportation and logistics company ALL and, since December, theyve owned an 8,3% slice of the CSXs capital, one of the largest US railroads. The sum is worth R$ 46,35 billion, the equivalent, for instance, to the market value of the Companhia Siderrgica Nacional. Lemann is today, at the age of 68, the fifth richest person in Brazil and the 172nd in the world. He also appears in the list of the richest ones in Switzerland, where he has lived since 1999, in an exclusive suburb of Zurich, right behind the Greek heiress, Athina Onassis. The 70s forged culture inside Garantia arrived into retail with the purchase of the Lojas Americanas in 1982, and into the industry after the acquisition of Brahma, in 1989 Telemar. Furthermore, the "Garantia culture", based on a rigid meritocracy of results, in an obsessive concern with the formation of leaders inside the home and with the transformation of employees into partners, became a reference for companies which have been away from the area of influence of legendary banks such as Suzano and Gerdau. "Jorge Paulo is not only one of the best business managers of Brazilian companies. Hes one of the best in the world ", says the industrialist Jorge Gerdau Johannpeter, chairman of Gerdau. "The only business school which arose in Brazil in my generation was Lemanns one, from Garantia", says Francisco Gros, expresident of BNDES and current C.E.O. of OGX, the oil and gas company owned by Eike Batista. Antonio Maciel Neto, president of Suzano, is used to take a few days a year to attend intensive business courses at Harvard. In February, when recently arrived from one of these courses, gave the following testimony: "We have studied 15 cases of the most well-successful companies in the world. In all management topics discussed, I always remembered Lemann. He had already done in Brazil everything that the school preached as the most effective administration techniques". More important than his empire and his fortune, for him and for those who are interested in management and leadership, is his legacy in the Brazilian business environment. The mid 70s forged culture by Lemann inside Banco Garantia arrived into retail through Lojas Americanas, bought in 1982; and into the industry, after the acquisition of Brahma, in 1989; it influenced virtually all the Brazilian investment banks and it spread through more than 30 companies bought, until today, by GP Investmentos, founded by Lemann, Sicupira and Telles. FromGafisa to Ig, passing through

1. FROM BROKER TO BANKER

Lemanns entrepreneurial saga begins in 1971, with the purchase of a small brokerage firm called Garantia, which intermediated transactions of buying and selling financial papers for clients in Rio de Janeiro. A similar business to the one he knew in previous years, as an employee of Invesco brokerage, which bankrupted in 1966, and Libra, where he stayed until he bought Garantia. In the early years, Lemann established contact with the Goldman Sachs Bank, which used the brokerage firm to intermediate most of his business in Brazil. Slowly, he started to send people for trainings and internships in the American bank. Goldman was small at that time, but had already developed a culture based in attracting good employees, paying well its staff, performing evaluations and turning them into partners. Exposed to this culture, Jorge Paulo had foreseen the business model that he believed would give him an advantage in the Brazilian market. In 1976, with five well-lived years in the market, Garantia was sought by JP Morgan, the world largest bank in capitalization at that time. Morgan wanted, in partnership with Lemann, to create an investment bank in Brazil. However, when were close to conclusion, the Brazilian withdrew. He chose the promise of a prematurely secured future over the right to remain in the charge of his business. He injected his own capital in the firm, obtained a patent and created Banco Garantia. Lemann considers this decision the most important and the most difficult one he has taken in his long career. By then, he already had by his side, the men who would become his musketeers in the business arena, both cariocas like Lemann. Marcel Telles was hired by Garantia in 1972, at the age of 22. Until then, he had four years of experience in the financial market, some of them dedicated to the tedious task of checking stock exchange orders for the carioca broker Marcelo Leite Barbosa, between midnight and 6 a.m. Marcel was referred by friends to Luiz Cezar Fernandes, one of the founders partners of Garantia, who decided to put him to the test. Instead of meeting the aspirations of the recently graduated economist, who wanted to be an operator in the profitable open market (where public debt securities were negotiated), Luiz Cezar offered him a position as liquidator, kind of an office messenger, for the pre-computer brokers, in charge of transporting receipts and vouchers of done transactions. However, three months of wearing off the sole of his shoes were enough to grant him access to the so desired operator post. Carlos Alberto Sicupira, known only as Beto, arrived to the broker In 1976, the Garantia broker was close to join JP in the following year, 1973, invited by Lemann himself. Months Morgan. Lemann preferred before, he had sold his participation at Cabral de Menezes broker to open his bank on his own firm to spend some time in London, at the Marine Midland Bank, and considers the hardest today part of HSBC. The purpose of the trip was to learn new decision he has taken until investment techniques that could be applied in the Brazilian market. By implementing what he had learned overseas, Sicupira would be today decisive for the bank's growth in the 70s. Having the base team ready and having aborted the partnership with JP Morgan, Lemann started to build his own business culture, but greatly inspired by the Goldman Sachs one. Meritocracy came from there, as well as the intense training and the mechanisms used to give people opportunities. Jorge Paulo was in love, mainly with the model partnership of the American bank. In another words, with the process of transforming employees into partners by the distribution of

shares. "The Brazilian capitalist, at that time, wanted basically everything for himself. Lemann is used to say The 'Indians were the Indians". In a study conducted by Ibmec So Paulo researchers Fernando Muramoto, Frederico Pascowitch and Roberto Pasquoloni p