Four decades ago, Jacob Rothschild did something crazy. After a family falling out, he turned his back on the riches of Europe’s biggest banking dynasty to pursue his own interests.
Today, as he plans to retire, the offshoot business he created is marking the latest milestone in the personal fortunes of a banking clan that stretches across France, Switzerland and Britain.
Rothschild and his direct family are the biggest shareholders of RIT Capital Partners Plc, the investment vehicle whose stock has returned 7.4% this year, boosting his personal wealth to more than $1 billion, according to the Bloomberg Billionaires Index.
Rothschild, 83, announced last month he’s stepping down in September as RIT’s chairman, capping a six-decade career on the front lines of financial markets.
At RIT’s 2019 annual general meeting in London, Rothschild said he and his family will remain significant shareholders, removing the threat of a bulk sale that could hurt the firm’s share price. Succession plans have been in place for several years and Rothschild will remain involved with RIT indirectly.
“It’s changing the guard, but not changing RIT’s philosophy,” said Charles Cade, an analyst at Numis Corp. “Historically, with family vehicles, there’s been a big gap when a lead investor retires, but there’s been a lot of effort here to prevent that from happening.”
Rothschild declined to comment for this story.
Napoleonic Wars
The banking dynasty originates with Mayer Amschel Rothschild, a rare-coin dealer born in 1744 who advised German aristocrats on their finances. He sent his five sons to major European cities to do business with cash-strapped governments, and Nathan Mayer Rothschild was the first to venture abroad when he arrived on English shores at the end of the 18th century.
Nathan founded his namesake bank in 1810 and gained prominence for financing Britain’s military operations in the Napoleonic Wars. About 150 years later, Jacob faced opposition in his efforts to expand the bank’s services from his father Victor and his cousin Evelyn, who took over from Victor as chairman of N.M. Rothschild & Sons Ltd. in 1976. These disagreements helped to spur Jacob Rothschild’s exit.
“The preservation of family control took precedence over expansion,” said British historian Niall Ferguson in his second volume on the Rothschild clan. “It was a serious rift within the English branch of the family.”