Alex Behring

So that comes from our Brazilian roots where my co-founders had done this beer investment that had worked really well.

And then as they branched off into private equity in a predecessor firm of this firm in Brazil, they attempted a bit the more traditional approach also.

That went okay.

But then we understood a couple of lessons from that.

One was that really, really great businesses

are rare, there are not that many of them to begin with.

Secondly, the ones that exist, they are not oftenly actionable.

So therefore, if you are going to be in the business of putting a lot of your own capital to work,

And if you're going to be very involved, the people that you're going to need to deploy there and the time are also a scarce resource.

So when I started the firm in New York in 2004, we already had those things pretty clearly understood.

And that was a premise that to the extent that we would get involved with businesses on a strategic long-term basis, it would be one at a time.

As much as the psychology, I think it drives the investment process tremendously.

a very rigorous analysis of what the downside can be.

And in our case, the downside has to be capital preservation with some small return of sorts.

And that drives business sort of decisions.

And it also drives capital structure decisions.

I think that's where it manifests itself the most.

If you were to look at businesses that we didn't buy or deals that we didn't do over a long period of time,

I think more often than not, that would be a function of us not being comfortable with a potential downside scenario or a downside case, as opposed to us not finding a path to a great case.

We over the years had to refine our investment process in terms of making that determination whether a business is great or not as a function of how the world changed because of technology.