m The Sunday Times May 13, 2007 Rothschild lords it over dealmakers Takeover mania has been a boon for

the baron whose bank offers advice for firms under attack Magareta Pagano BARON David de Rothschild is in the thick of the action again. Last time he had to fight back after the French government tried to destroy him but now he is caught in the crossfire at ABN Amro, where he is both a director and an adviser to the Dutch bank that is caught up in one of the bitterest takeover battles seen in Europe. The French aristocrat is on ABN’s supervisory board and the family bank is advising ABN on its future as Barclays and Royal Bank of Scotland fight to take control of it. If that’s not enough spice, Rothschild and ABN have a joint capital-markets venture that could be disrupted by the bidders. But the 65-year-old baron is unperturbed. Indeed, Rothschild excels in situations such as this. “We have a model for our bank that I shall describe as independent. We have no obligation to sell any products and have few of the conflicts of interest that trouble so many of our competitors.” It’s no surprise he is known as the consigliere’s consigliere. Defending companies under attack has become Rothschild’s forte, advising clients such as BAA and P&O in the thick of takeovers. As well as ABN, Rothschild is helping the Franco-Spanish Altadis to thwart a bid from Imperial Tobacco. Such work has been highly profitable – last year Rothschild stormed to the top of Europe’s charts, working on 218 deals with a value of $217 billion (£110 billion). Rothschild is the only privately owned investment bank of any stature that can claim to be free of conflicts of interest. Giving impartial advice is good business, according to the baron. When we met it was mid-afternoon and Rothschild was pouring tea in the cosy oak-panelled meeting room at Rothschild’s City offices in St Swithin’s Lane, soon to be bulldozed to make way for a skyscraper. He leant forward, almost whispering: “We need a bigger building because we are growing so fast. Not everyone appreciates this, but we are really much bigger than people perceive.” Big is 800 bankers around the world, 550 of whom are in Europe. “This makes us one of the, if not the, biggest in Europe working in mergers and acquisitions and corporate finance,” he said. The London office is bursting at the seams and this is why Rothschild hired the edgy Dutch architect, Rem Koolhaas, to design a daring glass and steel skyscraper with views from a roof-top sky pavilion, overlooking St Paul’s Cathedral. “It’s important to have a powerful physical presence for any organisation. It tells you something about the culture of a business,” he said. Pulling down the old, putting up the new is a Rothschild thing. There has been a family bank at New Court since it was founded by Nathan Rothschild – once the richest man in Britain – some 200 years ago and the baron hopes to have the new building ready for the bicentenary in 2009. Life was not so sweet four years ago. Then the sniping that had been going on between the British and the French houses for decades threatened the bank’s fortunes. But the baron, who was running the French bank, oversaw the banks’ merger, becoming chairman of the British bank after Sir Evelyn de Rothschild retired, and the first descendant of the French side to do so in 200 years. Whereas Sir Evelyn – married to American Lynn Forrester – is tall and debonair, Baron David is

more amiable looking, slightly crumpled even. The change of bloodline has been good for the spirit as well as the body. He said the Rothschilds have a knack for anticipating trends and riding with them. “It’s not always been easy. Political accidents have meant we have had to adapt quickly to events.” Ambition matters, even to a Rothschild. “Today we are global, competing for business with the world’s top 10 investment banks. We have to be internationalists to serve our clients best. I see us as a harmonious Tower of Babel,” he said. That tower is made up of Britain’s NM Rothschild, France’s Rothschild & Cie and 40 more offices in 33 countries employing 2,000 people. In France the bank is more dominant than ever, finally outshining Lazard Freres. It is top in India, third in the Middle East and Africa, second in eastern Europe and in Russia. Offices are planned in Dubai and Istan-bul. Russia is being beefed up, as is China. Critics point to its lack of muscle in America, still the biggest M&A market in the world. But Rothschild has avoided going for broke to capture business there, letting his 100 American bankers nibble at local deals. Only the British arm discloses how good profits are – they nearly doubled to £87m last year after directors and staff shared a bonus of £153m. The French are more secretive but their profits are said to be similar. Rothschild lives at the Chateau Reux at Pont-l’Evéque, the famous cheese-making and horsebreeding district of Normandy, which has the best grass in France. His half-brother, Edouard, runs France’s jockey club and, incongruously, Libération – the left-wing newspaper founded by Jean-Paul Sar-tre – and has a stud farm nearby. Monsieur David, as he is called in Paris, prefers to sit in the garden rather than create grand new ones as his ancestors did. He was mayor of his local town for 18 years and relaxes by reading thrillers and playing golf – he has a double-figure handicap – and often takes on his 94-year-old father, Guy, as well as France’s corporate bosses. His parents helped him develop what he calls his “spine”. “My father is an old-style vigorous central banker.” His German-Hun-garian mother was passionate about art, dedicated to Israel and charitable works. His spine was stiffened when President François Mitterrand’s government swept to power in 1981 and, in haste to prove its left-wing credentials, nationalised Rothschild. Distraught, Rothschild’s father went to America – to where he had fled from the Nazis and where David was born – but he, with his cousins Eric and Edouard, were angry young men: “We had $1m but no banking licence, not until 1987. There were three of us and two secretaries, but we prepared for war, determined to rebuild the bank.” Rothschild’s succession will be every bit as arresting because the baron has no formal retirement age. He and his half-French, half-Italian wife, Olimpia, whom he met when he was in his thirties and she just 18, have four children – three daughters and a son, Alex-andre, who works in private equity. Eric, who runs private banking, has sons, as does Edouard. Rothschild himself started at the family’s mining company before going to Rothschild Freres: “You see, I am a fataliste, in the French sense. The right person will emerge. You have to win your reputation. We have a rich vein of young Rothschilds in their mid-twenties who may be interested in working here.”

It is not by chance that the holding company is called Rothschild Continuation.

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