Forum Family Office: how Germany’s premier software HoldCo was born from the ashes of communism

Disclaimer: Unless noted otherwise, views and analysis expressed here are the author's own and based on public sources. The article is intended for informational and entertainment purposes only. This is not financial advice. Please consult a professional for investment decisions.

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Imagine hearing about a software HoldCo that acquires 4-5 VMS businesses per year, across German-speaking Europe, with revenues ranging €2-5M.

Who do you think it is?

Names like Volaris, TSS, Banyan Software, Everfield and Chapters Group spring to mind. These are all established, highly visible players. 

And yet there is one firm that few people have come across, especially outside of Germany: Forum Family Office (FFO).

Based in Munich, FFO has managed to stay under the radar even as its software portfolio has ballooned to nearly 20 companies - up from zero 6 years ago. Today’s, the portfolio boasts a headcount of 1,000+ and estimated revenues of (at least) €100M. 

And that’s just one part of the Wittek family empire! 

For this article, we researched topics such as:

• What is the origin of the Wittek family’s wealth? 

• What is FFO’s investment thesis?

• What sort of software businesses does FFO acquire? 

• How does FFO pitch to owners? What can you learn from studying their correspondence with sellers? And what is the end game?

Let’s go back to 1990

FFO’s origins are somewhat vague. What we know from their website and from speaking to Munich-based investors is that by the time the Berlin Wall fell, Dr. Burkhard Wittek was already an accomplished individual, with a Harvard MBA and a Partnership at BCG under his belt. 

In 1990, “together with several families” Dr. Wittek “acquired various companies from the Treuhandanstalt” (sources). Treuhandanstalt was the government agency tasked with overseeing the privatisation process in the former German Democratic Republic. Dr. Wittek wasn’t the only one partaking in the bonanza: according to some sources, 85% of the former public property was transferred to West German acquirers, 10% to foreign investors and the remaining 5% to East Germans. 

What was acquired, and whether it was subsequently divested, remains a mystery, as do the identities of the other families. 

What is clear is that the East German expedition was a lucrative one for the Wittek family. Thus in 1998 FFO was born. 

FFO has two investment strategies: Family Equity (permanent equity into privately owned SMEs) and Value Investing (public equity out of a €60M AuM fund). 

Of course, this setup is not new. Nor is it unique to FFO. Many family-controlled European investment firms had started out that way, before diversifying into large-cap equities, real estate etc. Also managing third party money. In some cases, that diversification strategy did not pay off - as AuM / fee income growth took precedence over investment returns. 

What makes FFO stand out is its dedication to SME investing, combined with a Swedish-style HoldCo playbook (decentralised, hands-off approach). 

This playbook has allowed FFO to meaningfully grow portfolio across three main verticals:

1. Water & Fluid Management

2. Healthcare

3. Software

A better, more future-proof version of Constellation Software?

Software is FFO’s newest vertical, established in 2018. In this relatively short period of time the portfolio has grown from 0 to 18 businesses (20+ including bolt-ons) in Germany, Austria, Switzerland, and Italy. 

FFO specialises in “classic” VMS businesses that wield outsized influence in their respective markets. For instance, epias has an impressive 35% share in the German emergency room market.

A median acquisition comes in with €5M in revenue. With that said, FFO does not shy away from larger deals, like HSH Software (€21M revenue) or Vitodata (€22M).

While Constellation’s portfolio tends to have stagnant businesses with near-zero organic growth, a number of FFO’s businesses are actually growing at double-digit rates. For example, in 3 years HSH grew turnover from €21M to €28M (+33%).

Here’s the full list of their investments:

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