Masters in Business: Trends in Emerging Markets with Martín Escobari

In the April 17, 2025 episode of "Masters in Business," Bloomberg Radio host Barry Ritholtz engages in an extensive and insightful conversation with Martín Escobari, co-president and head of Global Growth Equity at General Atlantic. This episode delves into Escobari’s remarkable journey from his early life in Bolivia to his influential role in one of the world's leading private equity firms. The discussion covers a wide array of topics, including entrepreneurship, investment strategies, emerging market trends, and personal philosophies on leadership and philanthropy.

Early Life and Entrepreneurial Beginnings

Martín Escobari opens by sharing his extraordinary upbringing in Bolivia, highlighting the stark contrast between his parents' communist beliefs and his eventual embrace of capitalism. Born in a small town of 10,000, Escobari recounts the improbability of his journey to Harvard, emphasizing the challenges he faced due to his parents' disdain for business and capitalism.

"The odds of me being here with you today are about one in a million." (03:04)

His admission to Harvard was serendipitous, thanks to a neighbor who facilitated his education at an American school funded by oil companies. This pivotal moment set the stage for Escobari’s academic and professional trajectory, eventually leading him to pursue an MBA and shift his career aspirations from the World Bank to the dynamic world of business and private equity.

Entrepreneurship in Brazil: Founding Submarino

Escobari’s entrepreneurial spirit is exemplified by his co-founding of Submarino, one of Brazil's earliest online retailers. He describes the venture as an ambitious attempt to create the "Alibaba or Amazon.com of Brazil," navigating the tumultuous economic landscape of the 1990s.

"We set out to build the Alibaba or the Amazon.com of Brazil." (05:13)

Despite initial successes in raising substantial capital, Submarino faced significant challenges, including a market crash and near-bankruptcy. Escobari details the resilience required to steer the company back to profitability, an experience that profoundly shaped his approach to investment and entrepreneurship.

"It was a full, compressed 30 years of life into seven." (06:54)

Building General Atlantic: From Family Office to Global Leader

Transitioning from entrepreneurship to private equity, Escobari discusses the evolution of General Atlantic (GA). Founded by Chuck Feeney, GA began as a family office with a mission to invest in global innovation and entrepreneurship. Over 45 years, GA has grown into a formidable growth equity investor with over $100 billion in assets under management.

Escobari highlights GA’s strategic focus on five key sectors: technology, consumer services, financial services, healthcare, and life sciences. However, he emphasizes that GA’s true strength lies in identifying and capitalizing on four overarching mega trends:

1. Digital Transition: Encompassing AI and cloud computing, accounting for $4 trillion in annual investments.
2. Healthcare Innovation: Leveraging technology to address high costs and inefficiencies in healthcare systems.
3. Energy Transition: Supporting the $6 trillion per year needed for global decarbonization.
4. Rise of the New Consumer: Harnessing the growing middle class’s purchasing power in emerging markets.

"These four megatrends define the growth equity opportunity set." (18:23)

Global Footprint and Emerging Markets Focus

A significant portion of the conversation centers on GA’s extensive global presence. Escobari explains that half of GA’s capital and personnel are based outside the United States, a unique stance among top private equity firms. This global approach allows GA to tap into diverse markets and talent pools, particularly in regions experiencing rapid growth and innovation.

India: Escobari discusses India’s transformation through demonetization, affordable broadband, and a national biometric identity system, creating a fertile ground for digital and financial innovations.

"We have the confluence of three factors that create what we think will be a virtuous next 10 years for India." (22:40)

Latin America: Highlighting Brazil and Mexico, Escobari points out the substantial opportunities due to rising middle class, favorable economic reforms, and lower labor costs compared to China.

"Latin America is trading at all-time low multiples." (23:05)

Middle East and Southeast Asia: GA is expanding its footprint in these regions, investing in innovative sectors and capitalizing on the shift from traditional oil economies to diversified, entrepreneurial hubs.

Africa and Japan: While Africa remains a longer-term prospect due to infrastructural challenges, GA is making initial investments. In Japan, Escobari notes a resurgence in innovation driven by a new generation of managers embracing rapid change.

"Japan is rediscovering its innovation roots." (39:51)

Investment Strategies and IPO Market Insights

Escobari provides a deep dive into GA’s investment strategies, particularly in growth equity. He explains that GA typically invests in companies that are already profitable and scalable, distinguishing growth equity from venture capital by focusing on the latter stages of company growth.

"We come in when you're profitable and scaled." (43:31)

Regarding the IPO market, Escobari identifies a significant backlog of companies desiring to go public, presenting a lucrative opportunity for growth equity investments. He outlines the conditions necessary for the IPO market to rejuvenate, emphasizing the importance of positive market performance, stable volatility indices, and landmark IPOs that can shift investor sentiment from fear to FOMO (fear of missing out).

"We have a backlog of $800 billion of stock that hasn't been able to move." (25:03)

Escobari advises diversification and focusing on high-quality companies to navigate economic uncertainties, drawing from his experiences growing up in Bolivia's chaotic economic environment.

Philanthropy and Personal Philosophy

Beyond his professional endeavors, Escobari is deeply committed to philanthropy, focusing on education, entrepreneurship, and music as means to combat societal tribalism. He discusses his involvement with organizations like Lincoln Center and Endeavor, highlighting the role of live music in promoting unity and fostering a sense of community.

"When we're in a room vibing to the same tune, there's no racial, income, or country differential." (53:44)

Escobari also emphasizes the importance of identifying and nurturing talent globally through initiatives like Primera Chance, which supports underprivileged Brazilian students in accessing quality education.

Books, Mentorship, and Advice for Graduates

Escobari shares his literary influences, including Tony Robbins’ Awaken the Giant Within, Viktor Frankl’s Man’s Search for Meaning, and Jack Weatherford’s Genghis Khan and the Making of the Modern World. These books have shaped his perspectives on personal development, purpose, and leadership.

When advising recent graduates interested in growth equity or investing, Escobari advocates for adventurous career paths and the importance of partnerships.

"Choose the most adventurous route and don't do it alone." (63:20)

Final Insights on Investing and the Future

Reflecting on his career, Escobari offers key lessons he wishes he had known earlier, echoing Warren Buffett’s principles of focusing on significant opportunities and avoiding mediocre investments. He underscores the necessity of independent thinking in avoiding the pitfalls of crowd behavior.

Escobari envisions AI as the most transformational wave, poised to impact 80% of global GDP by enhancing efficiency across various sectors. GA is strategically investing in AI applications, steering clear of capital-intensive infrastructure layers.

"AI is the defining incredible revolution of this generation." (44:20)

Notable Quotes

• "The odds of me being here with you today are about one in a million." – Martín Escobari (03:04)
• "We set out to build the Alibaba or the Amazon.com of Brazil." – Martín Escobari (05:13)
• "Beauty is a picture of lifetime beauty, is that gross margin defensible?" – Martín Escobari (28:25)
• "The heroes of the journey are not the investors, are the people that are in the front lines." – Martín Escobari (08:53)
• "Resist the temptation to have a checklist." – Martín Escobari (52:04)
• "Listen, you have to ignore the gut until you do your homework." – Martín Escobari (52:37)

Martín Escobari’s discussion with Barry Ritholtz offers a rich blend of personal narrative and professional expertise, providing listeners with valuable insights into the complexities and opportunities within emerging markets. His emphasis on global diversification, sustainable business models, and the transformative power of AI underscores the strategic foresight that has propelled General Atlantic to its esteemed position in the growth equity landscape.

For those interested in exploring more, past episodes of "Masters in Business" are available on platforms like iTunes, Spotify, and YouTube. Additionally, Barry Ritholtz’s book, How Not to Invest: The Ideas, Numbers, and Behavior that Destroy Wealth, offers a deeper dive into investment philosophies and behavioral economics.