One of the rulers sets up another shop in the city.
Edmond de Rothschild to open London merchant bank
By Daniel Schäfer in London
Edmond de Rothschild is set to launch a London-based merchant banking business this week in an effort by the Franco-Swiss private banking group to turn the City into its fourth major business centre.
The group, chaired by the late Edmond’s son, Baron Benjamin de Rothschild, has been hiring 20 senior advisers mostly from large banks to launch its private banking and corporate finance business in the City alongside its existing asset management unit.
Led by Richard Briance, Edmond de Rothschild’s UK head and a former chief executive of Hawkpoint, the group now has nearly 100 staff in London but has plans to expand further.
Christophe de Backer, Edmond de Rothschild’s chief executive, told the Financial Times that the private banking and asset management group could accommodate 150 people at its Mayfair office and was considering taking an additional building if necessary.
“We have got three main hubs in Paris, Geneva and Luxembourg. London will in the future become the fourth hub,” the former HSBC banker said. “London is the place where we can find talent, it is the place to be,” he added.
Edmond de Rothschild already owns an asset management business in the City, which mostly focuses on funds of hedge funds, as well as a fixed-income business, an emerging market-focused investment trust advisory unit and a small corporate finance unit.
The Geneva-based group has had a presence in London for three decades but that has never included its core business of serving the investment needs of entrepreneurs and families.
“London has not been developed like other places in Europe because maybe the management at that time was not so animated to do that,” Mr de Backer said.
Mr de Backer was brought into the group by Baron Benjamin and his wife, Ariane, two years ago to accelerate its expansion and bring regional and divisional fiefs closer together.
“Two year ago, I joined at a time when this organisation, promoting autonomy, was becoming an obstacle for the next step of that group,” he said.
Mr de Backer said the group aimed to increase its assets under management from €120bn last year to €155bn by 2016 and its return on equity to 11 per cent in the same timeframe.
Last year, however, the 60-year-old banking group’s return on equity stood at 5.1 per cent and Mr de Backer warned that 2013 would be a “transition year” in terms of profits.
Given its focus on entrepreneurs and wealthy families, its merchant bank is not at risk of a clash with other parts of the sprawling family, such as NM Rothschild, one of the UK’s largest corporate finance advisory groups belonging to Paris-based Rothschild group.
Mr de Backer said even an expansion by NM Rothschild in private banking would not cause a conflict.
“In my view the world is big enough to let the two families develop their franchise in that field . . . the more Rothschild is visible as a brand the more it is good for us.”
Baron Benjamin, sixth-generation scion of the banking dynasty started by Mayer Amschel Rothschild more than two centuries ago, operates his business separate from David and Eric de Rothschild’s banking group.
However, Edmond de Rothschild owns a stake of just below 8 per cent in the Parisian group’s main vehicle Paris Orléans and it has a cross-shareholding with David de Rothschild’s Zurich-based entity.
Mr de Backer said he was looking for ways to further co-operate with another part of the dynasty, Lord Jacob Rothschild’s RIT Capital Partners, after a first joint venture was set up last year to interlink their fund of hedge fund investment businesses.
