Specialist industry expertise is undoubtedly beneficial for private equity investors, but the ability to find a new business angle is even more important. So says David von Rosen, the German founder and head of family office Vonrosen, who has the experience and track record to support his view as he becomes the latest of PE Hub’s Dealmakers to Watch.

His first and most successful venture was Lottoland, an online lottery gambling platform he set up in 2013 that is now active in Europe, Africa and Asia.

That led to him establishing the family office: “Lottoland became dividend-producing, and I felt I needed to diversify, so I pulled myself out operationally.”

Lottoland does not disclose revenues, but the gambling companies Vonrosen owns make a combined annual revenue of more than $1 billion, he said. And von Rosen has stated his ambition to launch the world’s first ever $1 billion lotto jackpot in Dubai.

Family office Vonrosen has also done deals in edtech, defense, fintech, nutrition, renewable energy, gaming, insurtech and real estate, according to its website.

“The business savvy, the creativity, the flexibility, the hunger, the motivation, the dedication – those are all far more important qualities, I find, than expertise in any specific industry,” von Rosen said.

Bringing a different perspective

“When somebody in finance comes in with a new idea and hasn’t had any experience in, say, real estate, that doesn’t mean he’s necessarily disqualified,” he added. “It’s an advantage to come in from the side and start in an industry with a completely new understanding of it.”

For example, a recent Vonrosen project is 25 Degrees, which develops luxury villas in Dubai and sold its first property in July for $17 million, breaking a record for the emirate’s exclusive Palm Jumeirah.

Indeed, von Rosen splits his time between his base in Verbier in Switzerland, and Dubai, where he is focusing his efforts to scope out new investments, given the burgeoning tech investment and start-up scene there.

The original idea for 25 Degrees “was to develop villas ourselves and then sell them,” said von Rosen. “But we now have quite a few requests from external investors who want a piece of the pie in Dubai real estate.”

Enquiries first came from private individuals, then family offices, and now a US private equity fund is interested in investing alongside Vonrosen, he said.

A focus on control

However, the family office, which only manages von Rosen’s money, would want to retain control, as it tends to for most of its investments.

It buys into already-bootstrapped businesses in which he has a personal interest and that are or will be profitable from the start, said von Rosen.

“Our approach is different from a typical business angel or family office investor, which would potentially take different, minority stakes in many ventures,” he added.

“I like to do fewer deals, and take majority stakes in businesses, and most of them come from my own ideas, rather than through dealflow coming from my network. I want to be involved and have an idea of what’s going on.”

He does not take proposals from banks, because “they will be taking those ideas to many other folks.”

Once invested, Vonrosen typically holds onto assets for between three and five years and then exits through a trade sale.

Market challenges

Vonrosen has considered exiting via IPOs “on a couple of occasions, with investments where we were quite far advanced”.

But then the war in Ukraine started in February 2022, and the IPO market completely shut down and has not really recovered, he said. “It’s starting now again in the US and the UK, but I think [continental] Europe is still behind.”

So how has the family office coped with what has been a tough few years for deals and exits in the M&A market generally?

“I have the liquidity if I need it, and if it takes a couple years longer, so be it – as long as it’s growing in the interim,” von Rosen said.

Maintaining liquidity

Von Rosen declined to specify the precise size of his investment portfolio, but said it was “well into the 10 digits” – hence more than $1 billion. It is split roughly 80 percent in private markets and 20 percent in listed equities, which provides liquidity, he added.

“I want to be in the position to liquidate if I need to, for whatever opportunity comes along,” von Rosen said. “But I find the private space much more interesting, and I think that’s where the growth lies for me.”

The staff who help manage the portfolio, oversee business development and analyze ideas and financials for the family office are largely based in Gibraltar, at Lottoland’s headquarters.

Von Rosen did not put a number on the headcount, which he said is growing but that he wants to keep it lean: “I always think the bigger the team, the more problems you have.”

As for each specific venture, the teams sit wherever they are needed, he added. Given von Rosen’s openness to new ideas and industries, there’s no telling where that might be next.

Editor’s note: PE Hub has launched a new series of profiles called Dealmakers to Watch. We’re featuring private equity professionals as they pivot to new challenges, such as moving to a new firm, launching a new firm, getting promoted to partner, launching an investment strategy, closing a significant deal or some other new endeavor.

For more in the series, see these articles on PE Hub: