Reputation matters to all employers, but particularly to a family business that traces its ownership back to the Napoleonic Wars, and has its own money and name on the line with every deal. Signing on with NM Rothschild & Sons has the rider that being successful comes with the need to protect a family name that has become a byword for banking.
Next year David de Rothschild, the sixth-generation executive chairman of Europe’s oldest investment bank, will hand the baton to his son Alexandre, the 36-year-old seventh generation of the French banking dynasty, who has his eyes firmly fixed on preserving and extending the legacy.
“We are big believers that what makes it successful for the time being is this notion of partnership between the bankers, who are very autonomous, and some sort of family involvement,” he says.
Despite its reputation as the world’s biggest bank for a century and the fabulous, even excessive, wealth it spawned and maintained, the desire to maintain family control means it has focused on less capital-intensive businesses, such as M & A advice, private banking and private equity-style investing.
The family that in the 19th century boasted the largest private fortune in the world, financed Cecil Rhodes’ establishment of Rhodesia (now Zimbabwe) and once controlled Rio Tinto suffered major setbacks. Its banks were seized by the Nazis in the 1940s, its railroads nationalised in the 1930s, and in 1981 French President Francois Mitterrand nationalised the banking industry, leaving David de Rothschild with a reported $US1m on which to eventually rebuild the eponymous institution. In 2003 the French and English branches of the family merged their banking interests, which he has overseen ever since.
Alexandre de Rothschild hints at a certain inevitability in his move into the family business. “I think my father has put very smart pressure on me when I was young that you should do anything you want. You want to be a tennis player? You should be a tennis player. And I think it was a much smarter way to get me to where he wanted, which was to join the group.”
After an apprenticeship at Bear Stearns and Bank of America and private equity firm Argan Capital he joined the firm in 2008, just as the global financial crisis hit.
Diversification, he says, has been important to the family’s enduring wealth and presence in the industry. “So for instance the family invested in property, in art, in wine and has not put everything under the one roof. And I think that is a simple but pretty powerful principal to keep. You are relatively safe if you are diversified.”
Source: White, Andrew, The Australian, July 24, 2017, http://www.theaustralian.com.au/business/financial-services/rothschild-banking-dynasty-enters-seventh-generation/news-story/5750d9d7c32599a5a60b03f1001c8e65