Rothschild dynasty plans global shake-up

The Rothschilds are planning a big reorganisation that will lead to closer co-ordination of the banking dynasty's world-wide businesses.

A new group investment banking committee, chaired by Baron David de Rothschild, is to co-ordinate the family's corporate finance businesses in London, Paris, the rest of continental Europe, Hong Kong, Singapore, Australia, North America and Latin America.

The expected changes are part of a long awaited management shake-up to deal with increasing competitive pressures in the investment banking industry. They will be seen in the City as a first step on the road towards closer integration of the Rothschild banks around the world.

Baron de Rothschild, 53, is the talented French banker who resurrected the banking fortunes of the Rothschilds in Paris after the family's French bank was nationalised in 1981

He became deputy chairman of NM Rothschild, the London merchant bank, in 1992. His new role makes him the hot favourite to succeed Sir Evelyn de Rothschild as chairman of NM Rothschild, the London merchant bank. Sir Evelyn is the senior banker in the Rothschild family.

As part of the wide-ranging changes planned at Rothschild, Baron de Rothschild is to become chairman of a newly established company in London, NM Rothschild Corporate Finance, which will liaise with the rest of the empire through the new world-wide investment banking committee.

Separately from the moves on the investment banking front, there are also plans to give a clearer identity to all the banking businesses in the Rothschild empire owned by the family's Swiss holding company, Rothschild Continuation Holdings.

The balance sheets of the individual businesses are eventually to be published on a group wide basis, which is likely to reinforce the trend towards running the family businesses as a co-ordinated entity. However, this is a delicate and difficulty operation, and does not include Rothschild & Cie, the French business, which does not belong to the Swiss holding company.

Russell Edey, the present head of corporate finance in London, is to become deputy chairman of NM Rothschild Corporate Finance, the new London business set up under Baron de Rothschild's chairmanship.

Mr Edey described the new group investment banking committee committee as "co-ordination rather than integration," and made clear that it resulted from the rapid changes under way in the investment banking industry over the last couple of years.

He added "Unless you take maximum advantage of the strengths and opportunities that are open to you, in my view you become one of the also-rans, and we have no intention of being one of the also runs."

Mr Edey's job as head of corporate finance will be taken by two joint chief executives, Tony Alt and Keith Palmer, aided by three other senior members of the management team, Richard Davey, Philip Swatman and Charles Alexander, all of whom will be managing directors.

The changes in London are expected to include a decision by Bernie Myers, the most influential of the bank's four managing directors, to move into a back seat role.

As part of the changes, Rothschild is thought to be about to hire at least one new corporate finance executive to join its team.

The London shake-up follows the departure of a series of senior executives in corporate finance and metal trading from NM Rothschild earlier this year. John Bishop, the bullion specialist, went to UBS, as did Michael Phair, a privatisation specialist, and Anthony Fry, a corporate finance high-flyer went to BZW.

This led to reports of widespread dissatisfaction with Sir Evelyn's rule at the bank, which from being one of the top flight firms in London has been overshadowed by the rapid growth of huge integrated investment banks with enormous capital resources. With Schroders, Hambros and Lazards, it is one of a handful of independents left in London.

The bank was also hit by the suicide of Amschel Rothschild, head of the fund management side, who hanged himself in a Paris hotel room. Although said to have been an heir apparent to Sir Evelyn, it is thought highly unlikely that he would ever have succeded to the head of the dynasty.

Baron de Rothschild, although running a bank that is outside the mainstream of the family businesses because he and his father set it up themselves in the early 1980s, was a more likely contender to take over once he took the deputy chairmanship in London four years ago.

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