Luis Carlos Sarmiento
Son brings new perspective to family company
BOGOTA, Colombia — As an executive with Procter & Gamble Co. in the early 1990s, Luis Carlos Sarmiento Gutiérrez felt at ease in the United States and with the American way of doing business. He had no plans to return to his native Colombia.
But as an ambitious businessman, he also had a lot to learn. And who better to school him than his own father?
Sarmiento Gutiérrez is the only son of Luis Carlos Sarmiento Angulo, who seems to possess a magic touch when it comes to making deals. Over the past half-century, Sarmiento Angulo put together Grupo Aval, the huge and very successful Bogota-based banking and construction holding company. Last year, Forbes ranked Sarmiento Angulo No. 135 on its list of the world’s billionaires.
“I had met some very incredible executives in my time at Procter & Gamble. It took me a while, but I finally realized that I had one of those executives back home, and he was related to me,” Sarmiento Gutiérrez tells Latin Trade. “My father had put together such an interesting business. He could teach me a lot of things. So I decided to grab the opportunity.”
The father-son team has taken Grupo Aval to new heights.
Last year, Sarmiento Gutiérrez, who has served as Grupo Aval’s CEO since 2000, oversaw the most important acquisition in the company’s history: the $1.9 billion purchase of the Central American financial group BAC-Credomatic. It was by far the largest-ever foreign acquisition by a Colombian company.
In addition, Grupo Aval has greatly expanded its presence in Colombia, with projects ranging from the construction of an 18-tower trade center in downtown Bogota to opening branches of the Bangladeshi-founded Grameen Bank, which provides microcredit to the poor. Grupo Aval also has cemented its reputation as a heavyweight in philanthropy through its Fundacion Luis Carlos Sarmiento Angulo.
The Sarmiento partnership works not only because of the deep trust between father and son but also because of their differences. They approach potential mergers and acquisitions from distinct angles but often arrive at the same conclusions.
Besides belonging to different generations, they have different backgrounds. Sarmiento Angulo, Grupo Aval’s chairman, has spent nearly his entire life in Colombia, but his son has lived 19 of his 50 years in the United States.
Sarmiento Gutierrez was born in Bogota but moved to Miami when he was a teenager for security reasons after one of his sisters and a cousin were kidnapped by Colombian guerrillas. He was a top student but also tossed around the idea of becoming a professional athlete.
“I was a water skier,” Sarmiento Gutiérrez says. “But water skiing didn’t have a tremendous amount of professional possibilities in the world.”
Instead, Sarmiento Gutiérrez earned a civil-engineering degree from the University of Miami and an MBA from Cornell University. He worked as a financial analyst and profit forecaster at Procter & Gamble in Cincinnati and spent several years at a New York bank owned by Grupo Aval.
“I can’t say I feel like a gringo. But I understand the American business mentality, which is more strategically oriented and focused on long-term planning,” Sarmiento Gutiérrez says. “In Colombia, long-term can mean three to six months.”
At Grupo Aval, Sarmiento Gutiérrez has pushed foreign acquisitions, in part, because the holding company has already amassed about 30 percent market share for assets and deposits in Colombian banking, and domestic growth prospects are limited. But Sarmiento Angulo, who along with his related companies owns more than 80 percent of Grupo Aval’s stock, has the final say.
“I’m responsible for the day-to-day profitability of this group,” Sarmiento Gutiérrez says.
“But my father is the man with the means, so he gets to decide, especially on capital issues, what gets done and what doesn’t. Sometimes, when we don’t see eye-to-eye, I just have to say: ‘He’s the boss’.”
The BAC-Credomatic deal provides a window into how the two Sarmientos operate. They meet every Friday morning to catch up and discuss possible deals. At one of those meetings, Sarmiento Gutiérrez proposed buying BAC-Credomatic, and his father gave him a tentative green light.
While Sarmiento Gutiérrez was negotiating the purchase from majority owner GE Capital Global Banking in New York, he spoke by telephone with his father five times a day. As usual, the elder Sarmiento was probing the negatives.
“Everybody tends to look at business proposals from the everything-will-go-all-right point of view,” Sarmiento Gutiérrez says. “But he always comes back and says: ‘What if everything goes wrong?’ That’s been a valuable lesson.”
In the end, Sarmiento Angulo liked what he saw.
Founded in Nicaragua, BAC-Credomatic is the second-leading regional bank in Central America, and it gives Grupo Aval a solid market share in both banking and credit cards in Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama. BAC-Credomatic issues one-third of all credit cards in Central America. Last year BAC-Credomatic made about $150 million in net profits, and that figure is expected to hit about $200 million this year.
Besides business savvy, Sarmiento Gutiérrez has provided a second generation of stable family leadership at Grupo Aval. Now 78, Sarmiento Angulo is gradually ceding responsibilities to his son.
“We share so many things … because we’ve worked side-by-side for 15 years,” Sarmiento Gutiérrez says. “We both know exactly where we want the company to go.”
Filed Under: BRAVO 2011
About the Author: