Rothschild & Co
Rothschild & Co is a multinational investment bank and financial services company, and the flagship of the Rothschild banking group controlled by the French and British branches of the Rothschild family.
New Court, the historical and current Rothschild headquarters for over 200 years
|Public (under Rothschild family control)|
|Traded as||Euronext: ROTH|
|Predecessor||N M Rothschild & Sons|
Rothschild & Cie
|Founder||Nathan Mayer Rothschild|
|Alexandre de Rothschild, Chairman|
Ian Cullen, co-Chief Executive Officer
Olivier Pécoux, co-Chief Executive Officer
|Revenue||€ 1.976 billion (2018)|
|€ 255 million (2018)|
|€ 303 million (2018)|
Number of employees
The banking business of the firm covers the areas of investment banking, restructuring, corporate banking, private equity, asset management, and private banking. It is also known to serve as the advisor and lender to governments and major corporations. In addition, the firm has its own investment account in private equity.
Rothschild's financial advisory division is known to serve British nobility, including the British Royal Family. Past chairman Sir Evelyn Rothschild is the personal financial advisor of Queen Elizabeth II, and she knighted him in 1989 for his services to banking and finance.
Rothschild & Co is the result of a merger between the French and British houses of Rothschild, each with individual but intertwined histories.
British History (N M Rothschild & Sons)Edit
Late 18th CenturyEdit
In the late 18th century and early 19th century, Mayer Amschel Rothschild (1744-1812) rose to become one of Europe's most powerful bankers in the Landgraviate of Hesse-Kassel in the Holy Roman Empire. In pursuit of expansion, he appointed his sons to start banking operations in the various capitals of Europe, including sending his third son, Nathan Mayer Rothschild (1777-1836), to England.
Early 19th CenturyEdit
Nathan Mayer Rothschild first settled in Manchester, where he established a business in finance and textile trading. He later moved to London, founding N M Rothschild & Sons in 1811 at New Court, which is still the location of Rothschild & Co's headquarters today. Through this company, Nathan Mayer Rothschild made a fortune with his involvement in the government bonds market.
According to historian Niall Ferguson, "For most of the nineteenth century, N M Rothschild was part of the biggest bank in the world which dominated the international bond market. For a contemporary equivalent, one has to imagine a merger between Merrill Lynch, Morgan Stanley, J.P. Morgan Chase & Co. and probably Goldman Sachs too—as well, perhaps, as the International Monetary Fund, given the nineteenth-century Rothschild's role in stabilizing the finances of numerous governments."
During the early part of the 19th century, the Rothschild London bank took a leading part in managing and financing the subsidies that the British government transferred to its allies during the Napoleonic Wars. Through the creation of a network of agents, couriers and shippers, the bank was able to provide funds to the armies of the Duke of Wellington in Portugal and Spain. In 1818 the Rothschild bank arranged a £5 million loan to the Prussian government and the issuing of bonds for government loans. The providing of other innovative and complex financing for government projects formed a mainstay of the bank's business for the better part of the century. N M Rothschild & Sons' financial strength in the City of London became such that by 1825, the bank was able to supply enough coin to the Bank of England to enable it to avert a liquidity crisis.
Like most firms with global operations in the 19th century, Rothschild had links to slavery, even though the firm was instrumental in abolishing it by providing a £15m gilt issue necessary to pass the Slavery Abolition Act of 1833. The money provided by Rothschild was used to pay slave owners compensation for their slaves and the gilt issue was only fully redeemed in 2015.
Late 19th CenturyEdit
Nathan Mayer's eldest son, Lionel de Rothschild (1808–1879) succeeded him as head of the London branch. Under Lionel the bank financed the British government's 1875 purchase of a controlling interest in the Suez Canal. Lionel also began to invest in railways as his uncle James had been doing in France. In 1869, Lionel's son, Alfred de Rothschild (1842–1918), became a director of the Bank of England, a post he held for 20 years. Alfred was one of those who represented the British Government at the 1892 International Monetary Conference in Brussels.
The Rothschild bank funded Cecil Rhodes in the development of the British South Africa Company and Leopold de Rothschild (1845–1917) administered Rhodes's estate after his death in 1902 and helped to set up the Rhodes Scholarship scheme at Oxford University. In 1873 de Rothschild Frères (trans. "The Rothschild Brothers") of Paris and N M Rothschild & Sons of London joined with other investors to acquire the Spanish government's money-losing Rio Tinto copper mines. The new owners restructured the company and turned it into a profitable business. By 1905, the Rothschild interest in Rio Tinto amounted to more than 30%. In 1887, the French and English Rothschild banking houses loaned money to, and invested in, the De Beers diamond mines in South Africa, becoming its largest shareholders.
The First World War marked a change of fortune and emphasis for Rothschild. After the War, the Rothschild banks began a steady transition towards advisory work and finance raising for commercial concerns, including the London Underground. In 1938, the Austrian Rothschilds’ interests were given to the Nazis, bringing to an end more than a century at the heart of Central European banking. In France and Austria, the family was scattered for the duration of the Second World War. After the war, the British and French banks committed themselves to further developing their new operation in the United States, which was eventually to become Rothschild Inc, and increased focus on mergers and acquisitions, asset management, and merchant-banking.
In the 20th century, Rothschild developed into a pre-eminent global organization, which enhanced its ability to secure key advisory roles in some of the most important, complex and recognizable mergers and acquisitions. In the 1980s, Rothschild took a leading role in the international phenomenon of privatization. The company was involved from the beginning and developed a pioneering role which spread out to more than thirty countries worldwide. In recent years, Rothschild advised on nearly a thousand completed mergers and acquisitions with a cumulative value in excess of US$1 trillion. Rothschild also advised on some of the largest and most high-profile corporate restructurings around the world.
The price of gold was fixed for years, twice daily at 10:30am and 3:00pm, in a small room at Rothschild's New Court headquarters on St Swithin's Lane. The world's main bullion houses: Deutsche Bank, HSBC, Scotia-Mocatta and Société Générale used the agreed rate as a price benchmark for gold products and derivatives in the world's markets. The chairperson, traditionally appointed by the Rothschild bank, sat in the center, although the bank itself has largely withdrawn from trading. The five members of the London Bullion Association: Barclays Capital, Deutsche Bank, Scotiabank, HSBC and Société Générale, now conduct their twice-daily meetings over the telephone. The meetings were a tradition as great as the ringing of the bell at the New York Stock Exchange until 2004.
French History (Paris Orléans)Edit
The Compagnie du chemin de fer de Paris à Orléans was founded in 1838 as a railway company; after several takeovers and a merger with the Chemins de fer du Midi it had about 11,000 km (6,800 mi) of track, and was one of the major railway companies in France. In 1938, it was nationalised along with five other railway undertakings to form the national state railway company SNCF.
After the Second World War, the French branch of the Rothschild family took over the remains of Paris Orléans and transformed it into a holding company for its banking activities and corporate investments. These mainly included the Banque Rothschild (Bank), SGIM (property company), the SIACI (insurance), the Francarep (oil company) and the SGDBR (wineries), now Domaines Barons de Rothschild (DBR).
By 1980, the Paris business employed about 2,000 people and had an annual turnover of 26 billion francs ($5 billion in the currency rates of 1980).
The Socialist French government of François Mitterrand nationalized Banque Rothschild and renamed it Compagnie Européenne de Banque in 1981. In 1983, David de Rothschild and Eric de Rothschild recapitalized the family's business just as their ancestors had done in the prior century under the name Paris Orléans as it was banned from using the family name until 1986, at which time the firm was renamed Rothschild & Cie Banque.
Modern History and Recent EventsEdit
Anglo-French Rothschild MergerEdit
In 2003, the English (N M Rothschild & Sons) and French (Rothschild & Cie Banque) firms announced plans to merge under the leadership of David R. de Rothschild. Paris Orléans SCA became the flagship holding company of the family business of Rothschild. Although Paris Orléans is listed on the exchange, the family retains control of the firm. After the merger of the banking activities, Paris Orléans SCA became the sole owner Concordia BV, which controls Rothschilds Continuation Holdings AG, which controls the Rothschild Group’s banking activities. By 2011, the firm had merged operations and was unified.
In 2015, the parent company Paris Orléans changed its name to Rothschild & Co to match the trade name of the business.
In 2017, Rothschild & Co acquired the family-controlled French private bank Martin Maurel. This merger united the businesses of two European financial families. After the acquisition, Rothschild & Co became the leading private bank in France.
In 2018, Rothschild & Co sold its trust services division (responsible for the creation and administration of trust structures) to Richard Martin, a long-time Rothschild executive for an undisclosed amount. This restructuring of Rothschild's Wealth Management practice allowed the firm to focus more on its private banking activities from the recent purchase and integration of Rothschild Martin Maurel.
Rothschild & Co has three primary businesses: Global Advisory (Investment Banking Division), Wealth and Asset Management, and Merchant Banking.
Global Advisory (Investment Banking Division)Edit
The banking business is structured as follows:
- M&A and Strategic Advisory
- Debt Advisory and Restructuring
- Equity Advisory and Capital Markets
Rothschild & Co is consistently in the top 10 global investment banks for mergers and acquisitions (M&A) advisory by Thompson Reuters by both number and size of deals. In 2018, as with previous years, the firm ranked 1st globally and 1st in Europe by number of completed M&A transactions.
In the twenty-first century, it advised some of the largest global corporate transactions worldwide, competing against a wide range of investment banks, from conglomerates like J.P. Morgan Chase & Co, Goldman Sachs & Co and Morgan Stanley, to other mergers and acquisitions specialists like Lazard, Moelis and Greenhill & Co. in M&A, valuation and restructuring advisory services.
Wealth and Asset ManagementEdit
Rothschild & Co's wealth management practice stems on wealth preservation through generations, just as the Rothschild family has done for over two centuries. The words of one of Mayer Amschel Rothschild's sons and founder of Rothschild & Co still illustrate the service provided to clients:
Merchant banking is the investment arm of Rothschild & Co, deploying the firm's capital alongside private and institutional investors. The portfolio is in excess of €8 billion.
Historically, the Rothschild family owns many Bordeaux vineyards since 1868. Les Domaines Barons de Rothschild (Lafite) and Champagne Barons de Rothschild are some of the wineries owned in-part by Rothschild & Co.
Rothschild & Co has a unique culture in part due to its more than two century history and the firm still remaining under family control. The firm's new analyst education program, for instance, lasts nearly two months in London.
New Court headquartersEdit
Rothschild & Co's headquarters in London have been continuously located at New Court, St. Swithin's Lane, London for over two centuries. After acquiring the lease in 1809, the firm continued to grow. In 1865, a new building designed by Thomas Marsh Nelson in the Italian "palazzo" style was created at the same site. This building served as the headquarters for Rothschild through both world wars. In 1962, the firm demolished and rebuilt its New Court headquarters for a third time as the suggestion of Evelyn Robert de Rothschild. In 2005, the firm decided to create a forth iteration of the building that opens up views of St Stephen Walbrook church from its lobby, and views of the London skyline from a roof-top "sky pavilion" designed by Rem Koolhaas and his Office for Metropolitan Architecture (OMA).
Controversies and legal issuesEdit
NM Rothschild & Sons Ltd vs. Rothschild & Co (UK) LtdEdit
On January 27, 2009 NM Rothschild & Sons Ltd filed under s.69(1)(b) of the UK Companies Act 2006 for a change of name of the respondent company, Rothschild & Co (UK) Ltd, which had been registered since October 31, 2008. The Company Names Tribunal found for the applicant and ordered the respondent to change its name or else have its name changed by the adjudicator, as well as to pay the applicant's costs.
1MDB Malaysian sovereign wealth fund scandal (2015-present)Edit
Dispute between Rothschild & Co and Edmond de Rothschild GroupEdit
After Paris Orleans was renamed to Rothschild & Co, the Edmond de Rothschild Group disputed the use of the family name for branding purposes. Until their settlement, Rothschild & Co and the Edmond de Rothschild Group were cross-shareholders in each other's business, further complicating the matter. In 2018 the two sides of the family resolved the dispute.
Notable current and former employeesEdit
Many notable people, including heads of states, CEOs, and billionaires have been involved with the firm. This partial list excludes the many notable members of the Rothschild family who have worked at the family firm.
- René-Pierre Azria - Director of Jarden Corporation; Managing Director of Blackstone Indosuez
- Dominic Barton - Worldwide Managing Director of McKinsey & Company
- Franco Bernabè - CEO of Telecom Italia; Director of PetroChina
- Michel de Carvalho - Vice-Chairman of Investment Banking of Citigroup; Director of Heineken International
- José María Castellano - CEO of Inditex Group
- Sir John Collins - CEO of Shell UK; Chairman of National Power
- Alfonso Cortina - Chairman and CEO of Repsol
- Douglas Daft - Chairman and CEO of The Coca-Cola Company; Director of The McGraw-Hill Companies
- Dudley Eustace - Chairman of The Nielsen Company, Vice-Chairman of Royal Philips Electronics
- Pehr G. Gyllenhammar - Chairman of Aviva; Founder of European Round Table of Industrialists
- Jay Hambro - CIO of Petropavlovsk plc; CEO of Aricom
- Sir Graham Hearne - Deputy Chairman of Gallaher Group; Chairman and CEO of Enterprise Oil
- Henry Keswick - Chairman of Jardine Matheson Holdings; Director of Mandarin Oriental
- James Lawrence - Chairman of L.E.K. Consulting; CFO of Unilever
- Lord Leach of Fairford - Director of Jardine Matheson Holdings; Chairman of Open Europe
- Sir Carl Meyer - Deputy Chairman of De Beers; Governor of the National Bank of Egypt
- Baron Moser - Chairman of British Museum; Chairman Economist Intelligence Unit
- Paul Myners - Chairman of Guardian Media Group; Chairman of Marks & Spencer
- Robert S. Pirie - Senior Managing Director of Bear Stearns & Co.
- Gerald Rosenfeld - Head of Investment Banking of Lazard
- Wilbur Ross - investor, billionaire, and United States Secretary of Commerce
- Trevor C. Rowe - Director of the Australian Stock Exchange; Chairman of United Group; Chairman of Queensland Investment Corporation (QIC)
- Anthony Salz - Senior Partner of Freshfields Bruckhaus Deringer; Acting Chairman of Board of Governors of the BBC
- Peter Smith - Chairman of Coopers & Lybrand; Chairman of Savills
- Raymond W. Smith - CEO of Bell Atlantic; Chairman of Verizon
- Baron Vallance of Tummel - Vice-Chairman of Royal Bank of Scotland; Chairman of British Telecom
- Jeremy Weir - CEO of Trafigura
Politics and public serviceEdit
- Thierry Breton - French Minister of Economy, Finance and Industry (2005–2007)
- Gerhard Schröder - Chancellor of Germany (1998–2005)
- Liam Byrne - Minister of State at the Home Office (2006–2010); Minister of State at Her Majesty's Treasury (2008–2010)
- Baron George - Governor of the Bank of England (1993–2003)
- John Kingman - Chief Executive of UK Financial Investments Limited
- Baron Lamont - Member of the British Parliament (1972–1997); Chancellor of the Exchequer(1990–93)
- Anthony Nelson, Member of the British Parliament (1974–1997); Economic Secretary to the Treasury(1992–94)
- Sir Edwin Leather - Member of the British Parliament (1950–1964); Governor of Bermuda (1973–1977)
- Oliver Letwin - Chairman of the Conservative Research Department; Minister of State for Policy
- Emmanuel Macron - President of France and Co-Prince of Andorra (2017–present)
- René Mayer - Prime Minister of France (1953)
- Baron Neuberger of Abbotsbury - Lord of Appeal in Ordinary (2007–present)
- Georges Pompidou - Prime Minister of France (1962–1968); President of the French Republic and Co-Prince of Andorra (1969–1974)
- John Redwood - Member of the British Parliament (1987–present)
- Jacob Rees-Mogg - Member of the British Parliament (2010–present)
- Felix Rohatyn - United States Ambassador to France (1997–2000)
- Goh Keng Swee - Deputy Prime Minister of Singapore (1973-1984); Minister of Finance (1959-1965;1967-1970)
- Baron Wakeham - Leader of the House of Lords (1992–1994); Leader of the House of Commons (1987–1989)
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