The F1 Champion Who Became an Elon Musk-Worshipping Tech Investor
(Bloomberg) -- Elon Musk and Warren Buffett might seem an unlikely pair, given the former’s unpredictability and the latter’s midwestern sobriety. But books featuring the chairmen of Tesla Inc. and Berkshire Hathaway Inc. are on the reading list of 2016 Formula One world champion Nico Rosberg. Since retiring after his big win, the son of Finnish racing legend Keke Rosberg has embarked on a crash course in world-changing technologies, and how to invest in them.
Rosberg, who turned 33 last week, remains active in the racing world and on his popular YouTube vlog, but the intense focus he developed as a driver is now directed at startups. While he cites Benjamin Graham’s The Intelligent Investor as his guide for investing wisdom, his portfolio ventures far afield to companies such as Lyft, What3words and Musk’s SpaceX.
The study of “impact technologies,” which Rosberg defines as technologies that will “change the world for the better without taking anything away from the present,” has led him to explore companies around the globe, from Silicon Valley to China. Rosberg spoke about his unusual transition from ultimate gearhead to enlightened investor at a Young Successors Program recently held by UBS Group AG in New York for the adult children of the bank’s ultra-wealthy clients. Bloomberg caught up with him afterwards. Comments have been edited and condensed.
You’re a year and a half into exploring the tech world. Is there one entrepreneur you particularly admire?
Well, Elon Musk. I love how he just doesn’t care, he just does his own thing and what he wants to do and believes and just pulls through. Even if it’s too early, he just does it, and he creates such a momentum.
He has managed to force the entire car industry to rush into mobility [digital ride-hailing, ride-sharing services, autonomous driving] because everybody got so scared that he was going to take all the business away. What an achievement that is in itself and what an impact that’s going to have on our world, forcing the entire car world to go electric. That’s just one thing. Then there’s space as well, where he might also be able to have a huge impact.
I’m reading the Elon Musk book now (Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future, by Bloomberg Businessweek writer Ashlee Vance) and a Warren Buffett book.
Have you met Musk?
Just shortly, when I won [the Monaco Grand Prix] in 2014. He was there at the gala dinner because Princess Charlene invited him.
I met with the chief design officer at Tesla, Franz von Holzhausen, in the Los Angeles design headquarters before going to Silicon Valley in 2017. I drove Model 3 No. 5. I drove it in anger, flat out. I was very impressed. When I was in Silicon Valley, Musk was launching his Hyperloop. I visited with Tesla, Waymo with CEO John Krafcik and Instagram with co-founder Mike Krieger.
You’ve invested in Formula E, SpaceX and Lyft. What else do you own?
I’ve invested in SpaceX via a venture capital fund, and have co-invested with Atomico (an international venture capital firm that “invests in disruptive technology companies with ambitious founders”).
With investing in startups, it’s early days. One startup I’m invested in is What3words. That is one of the coolest ones. It’s remapping the whole world. Each square of Earth is described with three words. (What3words divides the world into 57 trillion 10-by-10-foot squares, with each square assigned a unique three-word address.)
It’s awesome, but can they convince consumers, people, to leave a 1,000-year-old address system behind? If they can, it will change our world and have a huge impact in developing countries where navigation is a disaster.
What kind of a tech network have you built up?
It’s the big European VCs, especially, some from Germany, and then the individuals in those groups. Formula One has been a great door opener, and I’ve tried to maximize that. It’s more difficult in America, because Formula One is stronger elsewhere. I lack the skills in analysis now, but I have trust in the people in my network and I can co-invest.
Have you been back to Silicon Valley?
No, I’ve been focusing more on Europe, actually. Europe needs a push. [Laughs.] It’s behind America and behind China—in everything but especially in mobility, even though the world’s leading auto manufacturers are in Europe. Imagine that. It’s crazy.
What is your risk tolerance?
I’m very conservative. I would never touch my capital, which I just want to generate income. I want it to be that way for my kids. So I’ve done a lot of real estate stuff, focusing on Monaco, really. Just one property in Monaco is such a big value. I get a net 3 percent yield on some properties. It’s quite safe.
Do you take sustainability into account when you look at business models?
There is a sustainability revolution now happening, it’s been starting for a long time, but now it will really kick off as prices come down. Mobility is now just coming to the break-even price with petrol and cars, and the same with solar power—it is not there yet but it is getting there, and it is going to take off as soon as that happens.
Will that be a big part of your portfolio?
Impact technology is. It’s 100 percent at the moment.
Crypto. Yes, no, maybe?
Oh my goodness. I read a whole book even on blockchain, and I’m not much smarter than before I read the book. You can see the huge benefits, but even there, to get us to embrace it will be such a big step from what we’re used to. The smart contract stuff is awesome, and what it’s going to do to landowners in Third World countries—land registries and everything—the values that will suddenly arise and the social economic impact is going to be gigantic. You will start suddenly attracting international money and everything.
So you’re educating yourself about it now?
Yes. It’s something you need to know about. Blockchain will go big. Crypto, I don’t know. What I don’t like about it is the instability. You need to make it stable for it to have a real long-term place. Until that point, why would you want to ever own bitcoin if it’s jumping about by 50 percent every week? It doesn’t make sense. My gut feeling is I’m not going to go for that until it’s stable. Up until now, it’s just been a speculation vehicle mainly. And that’s it.
You’ve talked about how when you were racing you started meditating. Some top investors are interested in that, too.
Everybody’s close to burnout, in the investment world as well and in our society. Everyone has that tendency. The thing is, I’m so far away from burnout now because everything is so much less intense. I’m used to the ultimate level of intensity.
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