N M Rothschild & Sons,
the UK-based investment bank founded
in 1811, known as Rothschild
N M Rothschild & Sons (more commonly known simply as Rothschild) is the investment bank company of the Rothschild family. It was founded in the City of London in 1811, and is now a global firm with over 40 offices around the world. The firm acts as a financial advisor to some of the most important companies, largest governments, and wealthiest families in the world.
In the late 18th century and early 19th century, Mayer Amschel Rothschild rose to become one of Europe's most powerful bankers in the principality of Hesse-Kassel (Hesse-Cassel) 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, to England. Nathan Mayer Rothschild first settled in Manchester, where he established a business in finance and textile trading. He later moved to London, where he founded N M Rothschild & Sons in 1811, through which he made a fortune trading bills of exchange.
According to notable historian and professor at Harvard University 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 and probably Goldman Sachs too, "as well, perhaps, as the International Monetary Fund, given the nineteen-century Rothschild's role in stabilising the finances of numerous governments. "
Early 19th century
During the early part of the 19th century, the Rothschild's 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 1825-6 , the bank was able to supply enough coin to the Bank of England to enable it to avert a liquidity crisis.
Late 19th century
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 ... in France 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 percent. 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.
20th and 21st centuries
The First World War marked a change of fortune and emphasis for Rothschild. After the War, the Rothschild banks began a steady transition towards the raising of finance for commercial and industrial concerns, including the London Underground. In 1938, the Austrian Rothschilds' interests were seized by 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 and asset management. The 1980s gave birth to the international phenomenon of privatisation, where the Rothschilds were involved from the beginning and developed a pioneering role which spread out to
over 30 countries worldwide.
Over this time, the London banking house continued under the management of Lionel Nathan de Rothschild (1882-1942) and his brother Anthony Gustav de Rothschild (1887-1961) and then to Sir Evelyn de Rothschild (1931-). In 2003, following Sir Evelyn's retirement as head of N M Rothschild & Sons of London, the English and French financial firms merged under the leadership of Baron David de Rothschild. All Rothschild offices around the world, therefore, now operate as one firm.
The only major non-family owner is Jardine Matheson, a hong which holds 20% of the main Rothschild company (Rothschild Continuation Holdings). The stake was acquired in 2005 from Royal & Sun Alliance through the Jardine Strategic subsidiary, which specializes in leveraging stakes to protect family owners.
Rothschild is consistently in the top 10 global investment banks for M&A advisory. According to Thomson Financial data, in 2007 Rothschild announced 390 deals worth a total of $566bn, giving it 12.6% market share. The firm is particularly strong in Europe, especially in the UK, France, Germany, Italy, and the Benelux countries, in each of which Rothschild consistently holds a top league table position. Rothschild's strength also extends to Eastern Europe, Asia, and Latin America. The main anomaly is in North America, where the firm leads the market in restructuring, but has made few inroads in M&A advisory.
The firm competes against a wide range of investment banks, from conglomerates like Goldman Sachs and JPMorgan, to other M&A specialists like Lazard and Greenhill & Co.. For comparison, Lazard is slightly smaller, and in 2007 announced 263 deals worth a total of $529bn; and Greenhill is about half the size, announcing 34 deals worth a total of $239bn.
Rothschild operates through three divisions:
* Investment banking
* Corporate banking
* Private banking and trust
Next to these three main divisions, Rothschild is also active in real estate, venture capital, and asset management.
Rothschild's headquarters are in the City of London, the chief financial district of London. The firm is now a global investment bank with over 40 offices around the world.
New Court headquarters
Rothschild's headquarters in London have been continuously located at the same site over the past two centuries, at New Court, St. Swithin's Lane. In the 1950s, the firm outgrew its New Court headquarters and took up space in nearby Chetwynd House. Eventually, in October 1962, at the suggestion of Evelyn de Rothschild, the firm demolished New Court and built a 6-story glass-and-steel building on the same site.
In the 1980s and 1990s, Rothschild outgrew its New Court headquarters for a second time, and now operates out of several buildings on St. Swithin's Lane, including 1 King William Street, which was originally the site of the first Gresham Club. As before, the firm has decided to demolish the New Court and build a taller 15-story glass-and-steel building, again on the same site. This third reincarnation of New Court was designed by Rem Koolhaas and will provide 20,992 square metres of office space (with associated plant, servicing, and car parking). The new building will open up views of St Stephen Walbrook church from its lobby, and views of the London skyline from a roof-top "sky pavilion". Construction will take place over a 30-month period from March 2008 to August 2010, so the building will be completed shortly after Rothschild celebrates its 200-year anniversary.
The Rothschilds, Frederick Morton
The Empire Of The City, E. C. Knuth
The Elite Don’t Dare Let Us Tell The People, Robert Gaylon Ross
Two Rothschilds And The Land Of Israel, Simon Schama.
Editor's note: My thanks and gratitude to RealJewNews.com
Post Script: The Shanghai Daily states, “BANK of China said yesterday it will buy a 20 per cent stake in La Compagnie Financiere Edmond de Rothschild (LCFR) for 236.3 million euros (US$340 million) and the two will develop private banking and asset-management services. Founded in 1953, LCFR is controlled by the Rothschild family, which has a 250-year history in European banking. ‘This partnership forms part of Bank of China’s global development strategy,’ Bank of China chairman Xiao Gang said in a statement. The deal expands Bank of China’s European ties just two months after it bought 30 percent of Swiss-based Heritage Fund Management SA in July for 60 million yuan (US$9 million).” The game is control, control, control, money just facilitates it and the best control holds no liability to public scrutiny." From an article entitled, "The $40 Trillion Company And The Financial Coup d'état" by Gabriel O'Hara in Wise Up Journal dated September 24, 2008
The Journal of History - Spring 2009 Copyright © 2009 by News Source, Inc.