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The future of Rothschild - Evelyn's dauphin
The Economist print edition ^ | Feb 13th 2003 | staff

Posted on 02/14/2003 7:44:47 PM PST by Phil V.



Rothschild

Evelyn's dauphin

Feb 13th 2003
From The Economist print edition


As Lazard prepares for a sale, can Rothschild remain independent?

Sir Evelyn's old-fashioned image

BEFORE he joined Lazard, Bruce Wasserstein talked to Rothschild, another family-owned bank, about buying a stake and running its investment-banking business. But the family did not warm to the forceful American. Lazard's gain and Rothschild's loss? Perhaps.

Sir Evelyn de Rothschild, chairman of N.M. Rothschild & Sons, the London end of the family firm, and a former chairman of The Economist, did not want to let an American merger specialist run, and possibly sell, his bank. Although it is reported that he will soon name his cousin David de Rothschild, chairman of Rothschild & Cie Banque, the family's French bank, as his successor, Sir Evelyn says only that “we are having a rearrangement” and that David will take on a bigger role. When David spends more time in London, Edouard de Rothschild, his younger half-brother, will take over more of the business in Paris. Sir Evelyn insists that he is not retiring.

Sir Evelyn has fought for decades to keep his bank independent. In 1980 he even fell out (for a time) with his cousin Jacob, now Lord Rothschild, who favoured a merger with S.G. Warburg, another British merchant bank. So he is unlikely to regret turning Mr Wasserstein down. Since becoming Lazard's chief executive in November 2001, Mr Wasserstein has been dressing up the bank for an expected sale to a bigger house: he has been quelling infighting, stopping defections (and sometimes failing), poaching talent and building up Lazard's capital-markets business.

Rothschild should avoid a similar upheaval. Sir Evelyn sees no imminent change in the ownership of the family's assets (which include a stake in The Economist). At the centre is Rothschilds Continuation Holdings (RCH), registered in Switzerland, which controls N.M. Rothschild. RCH is controlled in turn by Rothschild Concordia, another Swiss company, of which the British branch of the family, headed by Sir Evelyn, owns three-quarters and their French cousins the rest. David de Rothschild will probably follow Sir Evelyn as chairman of RCH. He, Edouard and Eric—another cousin, who runs Château Lafite, the family wine business—could try to buy most of Sir Evelyn's stake in Rothschild Concordia. Sir Evelyn says he does not intend to sell any shares. Yet control of N.M. Rothschild would make it easier for David eventually to assert authority.

David de Rothschild's priority will be to build better links between the banks in London, Paris and New York. That is something he had already begun as global head of the merger-advisory business in 1998, when he set up an investment-banking committee consisting of himself, Edouard and leading Rothschild bankers in London. Ultimately he might merge the French and British banks.

The bank is doing well. According to Dealogic, a capital-markets information firm, Rothschild ranked tenth in the global merger-advisory league last year; helped by a joint venture in equity capital markets with ABN Amro, a Dutch bank, it moved from seventh to sixth in Europe and even came first in Britain. In America a newish business, repairing the finances of bankrupt companies, is booming, in competition with such bankruptcy veterans as Lazard and the Blackstone group.

Rothschild has benefited from worries about conflicts of interest in the big investment banks, which have brought independent merger advice into vogue. But will it be able to survive? Banking boutiques are not sustainable in the medium term, says Davide Taliente of Oliver, Wyman & Co, a consultancy. Their balance sheets are too weak. They cannot compete with the intellectual capital, infrastructure and advertising clout of their bigger rivals. Even so, John Tattersall of PricewaterhouseCoopers sees a future for Rothschild as an independent adviser on mergers and bankruptcies.

In a fast-changing financial industry, Sir Evelyn has preserved the family bank's old-world culture and somehow still attracted talented bankers, even though he paid about a third less than most competitors. Not that he is ungenerous. At Christmas, every Rothschild employee is given a frozen turkey: lorry-loads of kosher and non-kosher birds are delivered to headquarters, in St Swithin's Lane in London. This year, not many investment bankers will have a bonus as valuable.



TOPICS: Culture/Society; Extended News; Foreign Affairs; Government; News/Current Events
KEYWORDS: rothschild

1 posted on 02/14/2003 7:44:47 PM PST by Phil V.
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To: Phil V.
Nice theft of the Economist's property -- graphics, text, trademark and all.
2 posted on 02/14/2003 7:46:02 PM PST by wizzler
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To: wizzler
Hmmmm it's a little difficult for me to get choked up about any losses the Rothchilds might suffer considering they're the ringleaders of a banking cartel conducting worldwide plunder on a scale never seen before in history.
3 posted on 02/14/2003 8:00:53 PM PST by agitator (Ok, mic check...line one...)
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To: wizzler
Theft?

Soros, Rothschild, and Evil Incarnate (Marc Rich's connections)

4 posted on 02/14/2003 8:02:14 PM PST by Phil V.
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To: Phil V.
Yes, theft. You don't own the copyrights to the content you pasted, and you don't own the trademark to the Economist logo you pasted.

5 posted on 02/14/2003 8:05:11 PM PST by wizzler
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To: wizzler
Is Soros a thief?
6 posted on 02/14/2003 8:18:56 PM PST by Phil V.
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To: Phil V.
Why are you asking me if Soros is a thief? What is its relevance to the fact that you stole something?
7 posted on 02/14/2003 8:21:34 PM PST by wizzler
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To: wizzler
Easy does it there. Maybe you have a point about the LOGO. But I think as a fellow freeper you would agree that we are allowed to post the text of an article for discussion purposes, or do you think all articles posted on FR are stolen?
8 posted on 02/14/2003 10:13:01 PM PST by jd777
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To: wizzler
Im not a fan of Phil V but your obviously another RIAA shill.
9 posted on 02/15/2003 4:04:37 AM PST by weikel (Anti democratic right of Atilla reactionary objectivist tory minarchist monarchist 4eva)
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To: weikel
I'm not sure what the recording industry has to do with copyrighted text from the Economist, but let's run with that for a moment. Let's say I'm in the service of the RIAA, a greedy, self-serving organization that is disliked by many people. I'm looking out for nothing but my own narrow, selfish interests.

How in the world would that, in itself, negate the principle of my argument?

You've managed to combine the fallacies of ad hominem, appeal to popularity and guilt by association all in one 13-word sentence. Impressive!
10 posted on 02/15/2003 7:01:39 AM PST by wizzler
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To: wizzler; Phil V.; aculeus; general_re; BlueLancer; Poohbah; hellinahandcart

Nice theft of the Economist's property -- graphics, text, trademark and all.

Terrible, just terrible. Please alert the owner of this site.

11 posted on 02/15/2003 7:13:55 AM PST by dighton
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To: dighton; wizzler; weikel
YES.

I'm turning in my FRePin today.


wizz . . . additional "thefts" I regret . . .

The new improved TRASH COMPACTOR . . . If it's trash you want you'll find it here . . . all the latest dirt on Bill & Hildabeast

The universe - just right

12 posted on 02/15/2003 7:33:27 AM PST by Phil V.
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To: dighton; general_re; BlueLancer; Poohbah; hellinahandcart
At Christmas, every Rothschild employee is given a frozen turkey: lorry-loads of kosher and non-kosher birds are delivered to headquarters ...

As a New Yorker once said as the Jewish Mayor of Dublin led the St. Patrick's Day parade, "Only in America."

13 posted on 02/15/2003 7:56:35 AM PST by aculeus
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