One of the most storied names in international finance is the Rothschild family’s. The Rothschild brand, if you will, is steeped in the mystique of old world European banking from a long-gone era. But many descendants of the Rothschild founding generation from the 18th century have branched out to carry on the family name in the realm of finance—including in the U.S. wealth management business.
In May 2013, Bronfman E.L. Rothschild LP was formed as the successor by conversion from Baker Tilly Investment Advisors LLC, formerly a regional wealth management unit of Baker Tilly, one of the country’s largest accounting firms.
With four offices in Wisconsin and another in Minneapolis, the Baker Tilly wealth management firm’s humble Upper Midwest domain might seem like an odd place for a Rothschild to plant his flag. But the path from European banking dynasty to American Heartland financial planning was greased by Matthew Bronfman, scion of the family that owned the Seagram Company, the former distillery giant that at its peak was the world’s largest purveyor of alcoholic beverages.
Bronfman invests in private and public companies across a swath of industries, and one of his contacts gave him a tip that Baker Tilly, the CPA firm, was quietly shopping around its wealth management unit. One of the things that grabbed Bronfman’s attention was the firm’s repeatable cash flow.
“We thought it a good platform from which to grow and we loved the Midwest values,” says Bronfman, who’s based in New York City. “We like the management team and their ethics, and their one-client-at-a-time hands-on approach, as well as their independent fee-based model. I look at businesses all over the place, and I like this business a lot.”
The Bronfman and Rothschild families have known each other for a couple of generations. The Seagram Company imported Rothschild brand French wines—from Château Lafite Rothschild and Château Mouton Rothschild—for more than a half-century, and the families know each other through Jewish philanthropy.
During dinner one night, Bronfman discussed the Baker Tilly venture with Eli Goldstein, who runs the family office for British billionaire Sir Evelyn Rothschild and his American-born wife, Lynn. “He [Goldstein] said, ‘That sounds like something we might want to do with you.’ And that’s how it happened,” Bronfman recalls.
In 2003, Sir Evelyn and his wife started E.L. Rothschild LLC, a family investment company whose current holdings include the owner of The Economist magazine, along with energy development, infrastructure, real estate, agriculture and consumer goods operations on four continents.
In 2011 and 2012, the Rothschilds held a stake in Weather Central LP, the folks behind the Weather Channel, whose Midwest headquarters (one of the company’s three headquarters) is in Madison, Wis. “Baker Tilly was our auditor there, so it was serendipitous because we already had a relationship with them,” says Goldstein, explaining one of the reasons he and the Rothschilds were interested in teaming up with Bronfman on the Baker Tilly deal. More important, Goldstein adds, “the Rothschilds really like this space because wealth management uniquely fits with what we’re trying to do at E.L. Rothschild.”
The Bronfman/Rothschild combo makes for an impressive business card, but Bronfman, Goldstein and the firm’s management say there’s more to the company than just its nameplate. Indeed, they have big plans to make Bronfman E.L. Rothschild a formidable player in the registered investment advisor space via both organic and inorganic growth.
They took their first step toward that goal last April when the company acquired Lake Country Wealth Management, a small RIA in Delafield, Wis. In August, they went after bigger prey on the East Coast when it merged with Highline Wealth Management LLC, a firm with about $1.3 billion in assets under management with offices in New York City, and in suburban Philadelphia and Washington, D.C.
The transaction created a company with 72 employees, 1,253 individual clients, 29 institutional clients and roughly $3.6 billion in assets. The newly expanded Bronfman E.L. Rothschild is now run by the former CEO of Highline, Neal Simon, and the main corporate office moved from Madison to Rockville, Md., where Simon works.
Simon notes the early stages of the merger have gone well, and the unified management team is putting its collective head together to map out the company’s future. “We’re developing a five-year plan where we go from $3.6 billion to about $10 billion by 2020,” he says.
Rebranding
According to management at Bronfman E.L. Rothschild, Baker Tilly quietly looked to sell its wealth management business because it was a non-core division and it made sense to divest from it. But they weren’t looking to dump it just to get it out of their hair.
“They wanted to put the investment advisory business in the hands of somebody they knew wouldn’t mess it up and start doing things with their clients in a way that didn’t fit with what had been done before,” Bronfman explains. “They had to be careful with who they picked, so I was very grateful they had the faith in me, along with Eli and the Rothschild family, that we’d take care of their clients in a way they’d be comfortable with.”
Bronfman says that early on in his discussions with the Rothschild family they decided they wanted to rebrand Baker Tilly Investment Advisor for two reasons. First, to create separation between the accounting and wealth management firms (though they still share some clients). Second, to forge a powerful brand identity.