Quick Stats

Type – Private
Industry – Financial services
Founded – London, England, UK (1811)
Founder(s) – Nathan Mayer Rothschild
Headquarters – London, England, UK
Key people – Baron David de Rothschild, Chairman
Products – Investment banking
Revenue – £426.9 million (2008)
Operating income – £28.5 million (2008)
Net income – £25.0 million (2008)
Employees – approx 2000 (2008)
Website – www.rothschild.com

Brief History and Rothschild Timeline

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 with his involvement in the government bonds market.

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.”

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.

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.

Recent History

In the twentieth century, Rothschild developed into a preeminent global organisation, 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 privatisation, where the company was involved from the beginning and developed a pioneering role which spread out to over 30 countries worldwide.

In recent years, Rothschild advised on nearly 1,000 completed mergers and acquisitions, having a cumulative value in excess of $1 trillion. Next to this, Rothschild also advised on some of the largest and most high-profile corporate restructurings around the world.

Operations

In the Rothschild history, Rothschild Bank 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.

Divisions

Rothschild Bank 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.

Corporate structure

In the twentieth century, 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 (b.1931). In 1970, the firm converted from a partnership to a limited liability company. 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.

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.