Rothschild to Start $711M Private Equity Fund

The Deal
September 3, 2009

One of the most famous names in finance, Rothschild, is planning to raise a $711 million investment fund as it welcomes chairman David de Rothschild’s son to the firm.

Sources tell Bloomberg that the private bank’s investment vehicle will buy minority stakes in closely held companies, valued at €100 million to €500 million ($142 million to $711 million), with fundraising expected to be completed by year’s end. Marc-Olivier Laurent, Emmanuel Roth and Javed Khan, who came over from the Blackstone Group in June, will manage the new fund.

Also coming aboard to help with the fund is Alexandre de Rothschild, David de Rothschild’s son, entering the family business from European leveraged buyout shop Argan Capital.

Rothschild is marketing the new vehicle as fundraising for private equity is once again starting to pick up. Over the past two months, U.S. private equity firms put more than $11 billion under management; while other firms are targeting another $10 billion.

Rothschild Said to Start Fund; Chairman’s Son Joins

Bloomberg
September 2, 2009

Rothschild, the largest family-owned bank, plans to raise a 500 million-euro ($711 million) investment fund as chairman David de Rothschild’s son joins the firm, two people familiar with the plan said.

Alexandre de Rothschild, 29, moved to the family bank from Argan Capital, Bank of America Corp.’s former European private equity division, to work on the project, said the people, who declined to be identified before the fundraising is completed. Rothschild Managing Director Marc-Olivier Laurent, 57, will oversee the fund, the people said.

The two-century-old firm, which is run by 66-year-old David de Rothschild, plans to buy minority stakes in closely held companies after the pace of global mergers and acquisitions dropped 46 percent in the past year. The fund’s backers include Rothschild partners and clients. It will target companies valued at 100 million euros to 500 million euros, the people said.

“It’s normal for them to bring in family members to ensure succession,” said Anis Bouayad, founder of Paris-based advisory firm AB Conseils. “The bank has always found a way to promote its own, while also bringing outside talent to the top jobs.”

Javed Khan, who joined Rothschild from New York-based private equity firm Blackstone Group LP in June, and Emmanuel Roth, a former executive at investment firm Paris-Orleans, will also manage the fund, the people said. Rothschild plans to complete the fundraising before the end of the year, they said.

‘Family is Fine’

“In a business, the key is to have the best people,” David de Rothschild said in a 2005 interview, addressing the subject of succession. “The family is fine as long as they do a good job. If they don’t, it has to be someone else.”

David de Rothschild took managerial control of the U.K. side of the bank after his cousin Evelyn retired in 2004, cementing control of both the Paris and London businesses by a French Rothschild, a first for the family firm.

David’s younger brother, Edouard, stepped down in 2004 after helping to expand the French bank. Today, he oversees France Galop, the country’s horse-racing association. David’s cousin, Eric, is chairman of Rothschild’s asset-management and private-banking units and also runs the family’s Chateau Lafite vineyard.

Mayer Amschel, founder of the Rothschild banking dynasty, started out buying and selling old coins in a Frankfurt Jewish ghetto in the late 1700s and built an embryonic banking business by extending credit to clients. In the early 1800s, he sent his five sons to establish bases in London, Paris, Naples and Vienna, in addition to Frankfurt.

His great-great-grandson, Guy de Rothschild, rebuilt the French business in the 1950s and 1960s after reclaiming the bank, which had been seized by the pro-Nazi Vichy regime. In 1981, the French bank was nationalized by Socialist President Francois Mitterrand. Two years later, David persuaded the French government to grant the Rothschilds a new banking license.

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