Rothschild clan moves to cement its grip - FT.

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http://www.ft.com/intl/cms/s/0/29f70354-7fca-11e1-92d3-00144feab49a.html

April 6, 2012 6:27 pm

By Daniel Schäfer in London

©AFP

David de Rothschild takes strength from family ties

More than two centuries after his Frankfurt-based ancestor Mayer Amschel Rothschild sent his sons to Paris, London, Naples and Vienna to create what became known as “the world’s banker”, Baron David de Rothschild is set to close the final chapter in the reunification of his sprawling family dynasty. The 69-year-old chairman of the Rothschild group is bringing together its French and UK assets under the roof of Paris Orléans, a French listed entity with its roots in a 19th-century railway company. The move will mark the last step in a process that started a decade ago of integrating the French banking operations with NM Rothschild, the UK-based investment bank that rose to fame in 1815 when Amschel’s son Nathan Meyer Rothschild made a fortune buying British government bonds in anticipation of Napoleon’s defeat at Waterloo. In the 19th century, the House of Rothschild could thrive as a loose European partnership that financed states, companies and armies throughout the continent. But Mr de Rothschild’s

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Guy de Rothschild: “A Jew under Pétain. It reflects David de Rothschild’s determination never again to give up family control.ft. an act that prompted this bitter response from his father. would double the market value of Paris Orléans from €550m to more than €1bn. Click to enlarge For one thing. his father. “To improve the performance of the group.com/intl/cms/s/0/29f70354-7fca-11e1-92d3-00144feab49a. Holding the sprawling family together has never been easy. RIT.FT. He started the integration of the group nine years ago when the French and British banking operations were unified. eschewed the family group and joined hedge fund Atticus. fell out with Sir Evelyn and created his own investment trust. The new company structure will be a limited partnership that acts as a safeguard against takeovers by giving the family a 57 per cent share in the voting rights. He recently strengthened the family ties through a partnership with 2 of 4 07/04/2012 14:16 . the bundling of the group’s shareholdings under a common roof pre-empts a future regulatory regime that penalises minority stakes with high capital requirements. and he took the helm of the combined group and its UK branch from his cousin Sir Evelyn de Rothschild. we need to bring it under one umbrella. A few decades earlier.html reorganisation highlights the fact that in today’s world. a pariah under Mitterrand. regardless of the size of its stake in Paris Orléans. In 2007. once completed. the London-listed Indonesian coal mining group he helped create. leaving his two sons and one daughter with a third of the group’s shares. Another Rothschild descendant. This had become his raison d’être ever since his “traumatic” experience of seeing the family’s French bank nationalised by François Mitterrand in 1982. the French family branches took majority control of the Rothschild group when Sir Evelyn sold his stake. and with it the dominant position of the two French family branches of David and Eric de Rothschild. The reorganisation of assets.Rothschild clan moves to cement its grip . which will be 48 per cent after the reorganisation.” David de Rothschild launched a new French bank in the same year and focused it on advisory and asset management instead of the lending business that dominated its predecessor.” one person close to the family says. Nat. He made headlines this year when he was almost ejected from the board of Bumi plc. But the main goal is to cement once and for all the family’s grip on the business.com http://www. Lord Jacob. a banking group cannot afford to operate as a network of sporadically aligned regional fiefs.

4m to €269. French investment banking partners worked for a different entity. while NM Rothschild in the UK only managed eighth place.” the banker says. In its last financial year. reflecting its rapid global expansion in the past decade.3m. Paris Orléans’ net profit fell 20 per cent to €42. “There is no obvious French domination. Before the pending reorganisation.” one London based banker says. its consolidated net profit rose €178. head of Paris Orléans. thanks to its private banking arm and its counter-cyclical business model that combines restructuring and takeover advice.html another arm of the dynasty. Mr Higgins will be joint chief executive of the merged family entity alongside Olivier Pécoux. Last year it ranked in third position. One Rothschild banker said the public perception that the group would only now be unified was wrong: “The businesses have been glued together for a decade.com/intl/cms/s/0/29f70354-7fca-11e1-92d3-00144feab49a. The banking group as a whole stayed profitable through the financial crisis. French and UK bankers are a minority among a string of other nationalities. Edmond de Rothschild’s private bank is separate from the Rothschild group. “This is the final piece in the jigsaw puzzle to make the business truly integrated. Nigel Higgins. Rothschild & Cie Banque.ft. which have a dominant position on their home turf. Two years ago. some cultural acrimony remains.4m in the first six months of its financial year 3 of 4 07/04/2012 14:16 . He adds that the UK bankers have always had to fight much harder to earn their business than their French peers.FT. the Franco-Swiss Edmond de Rothschild bank. Another banker said one crucial element had been missing at the investment bank: a common bonus culture. according to Thomson Reuters.” Rothschild’s French arm has in past decades usually taken one of the top three slots in mergers and acquisitions advisory league tables.Rothschild clan moves to cement its grip . But while its Paris and London operations seem to work together well. This sometimes created tensions when partners from London and Paris where co-operating on cross-border transactions but had different economic rewards from the deal.com http://www. “They have got a splendid business and they know it.” On its management committee. chief executive for its UK operations. The takeover of control has been done in a quite subtle way. but it will have a 6 per cent shareholding in Paris Orléans after the reorganisation. the Rothschild group – for the first time in its 213-year history – appointed a non-family member.

Contact us if you wish to print more to distribute to others.com/intl/cms/s/0/29f70354-7fca-11e1-92d3-00144feab49a.ft.Rothschild clan moves to cement its grip . For the urbane dealmaker David de Rothschild.com http://www. is seen as heir apparent. helped by an exceptional capital gain of €33.html Print a single copy of this article for personal use. 4 of 4 07/04/2012 14:16 . mainly due to the consolidation of Rothschild & Cie bank in the accounts.ft.7m. His 32-year-old son Alexandre de Rothschild is working in the merchant banking division. © THE FINANCIAL TIMES LTD 2012 FT and ‘Financial Times’ are trademarks of The Financial Times Ltd. and with his father retiring as chairman in a few years’ time. net profit rose to €102. compared with the same period a year earlier. For the full year to March 30 2011. Additional reporting by Scheherazade Daneshkhu in Paris Printed from: http://www.4m from €25.FT.1m.html from April 1 to 30 September 2011. there is one thing left to do: to secure a smooth transition of power to the next generation.com/cms/s/0/29f70354-7fca-11e1-92d3-00144feab49a.

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