Jacob Rothschild, banker who broke with fabled family, dies
LONDON: Jacob Rothschild, a wealthy financier, patron of the arts and philanthropist with close ties to Israel, who broke with his family’s fabled banking dynasty at a time of radical change in the world of high finance, has died. He was 87.
His death was announced Monday by the Rothschild Foundation, a British charity of which he was chair. It did not specify when or where he died or give the cause of death.
Rothschild — more formally the fourth Baron Rothschild — was descended from Mayer Amschel Rothschild, a coin trader in the Jewish ghetto in Frankfurt, Germany, who sent four of his five sons to Vienna, London, Paris and Naples, Italy, to seek their fortune in the late-18th and early-19th centuries.
For most of the 19th century, the House of Rothschild was the biggest bank in the world “by a wide margin,” Jonathan Steinberg, an American scholar, wrote in The London Review of Books in 1999. The fortune of Nathan Mayer Rothschild, the son who founded the bank’s London branch, “can be compared to that of Bill Gates today,” Steinberg added.
Most accounts of the Rothschilds’ wealth trace its origins to a decision to finance the British military in the Napoleonic Wars. But the broader dynasty flourished on cementing its family bonds and cultivating what Steinberg called “everybody who was anybody at the top of European society during this period.”
It was against this historical backdrop that Jacob Rothschild joined the London arm of the family’s empire at the N.M. Rothschild & Sons bank in 1963. Until then, he had followed a route familiar to the British elite, educated at Eton College and at Christchurch College, Oxford.
At that time, London’s traditionally cautious, clubby world of high finance was still two decades away from a shift towards freewheeling capitalism that culminated in the so-called Big Bang of 1986, which brought deregulation to the London Stock Exchange.
And British merchant banks in the City, as London’s financial district is known, seemed dwarfed by the burgeoning financial might of Wall Street, building pressure for new approaches.
CHALLENGED FAMILY CONTROL
Rothschild had long favoured merging the London branch of his family’s financial empire with another merchant bank, S.G. Warburg, but the plan was opposed by his cousin Evelyn de Rothschild and his own father, Victor, a scientist and former member of Britain’s MI5 domestic intelligence agency.
He therefore resolved to break away. “We must try to make ourselves as much a bank of brains as of money,” Rothschild said in 1965.
In a way, he was challenging a culture of family control and secrecy that had distinguished its dealings from the very beginning.
As long ago as 1810, “family policy excluded female descendants and all sons-in-law from any part in the business,” Steinberg wrote. Each of the initial partners “renounced the rights of his wife to have sight of the accounts and swore to allow only direct male descendants to inherit shares.”
Marriage outside the Rothschilds’ Jewish faith was frowned upon; marriage within the family was not unknown.
“Of 21 marriages involving descendants of Mayer Amschel between 1824 and 1877, no fewer than 15 were between his direct descendants,” Steinberg wrote.
Although the family’s rules had softened by the early 1960s, Rothschild’s proposals for a merger with S.G. Warburg collided head-on with tradition. For Victor and Evelyn de Rothschild, “the preservation of family control took precedence over expansion,” British historian Niall Ferguson wrote in his book The House of Rothschild (1998), a voluminous study of the family. The clash represented “a serious rift within the English branch of the family,” Ferguson wrote.
The dispute was resolved only in 1980, when the feuding partners agreed that the family bank, N.M. Rothschild & Sons Ltd, would operate separately from Rothschild’s breakaway entity, J. Rothschild & Co, whose main assets would be known by their initials: RIT, for Rothschild Investment Trust.
Rothschild retired as head of RIT Capital Partners in 2019. That year, his personal wealth was estimated by the Bloomberg Billionaires Index to be more than $1 billion.
CONTROVERSIAL MANOEUVRE
Nathaniel Charles Jacob Rothschild was born in Berkshire, England, on April 29, 1936, to Victor Rothschild, the third Baron Rothschild, and his first wife, Barbara Judith (Hutchinson) Rothschild.
Jacob Rothschild studied history at Oxford before joining the family bank. After he resigned to head RIT, he became involved in a series of ventures, including an unsuccessful bid in 1989 with other investors to take over British American Tobacco for $21 billion.
He maintained a wide network of international connections, acting as deputy chair of Rupert Murdoch’s BSkyB Television and as an adviser to then-Prince Charles. He was a member of the International Advisory Board of the Blackstone Group, a leading private equity group, and co-founded the J. Rothschild Assurance Group in 1991, a wealth management company now known as St James’s Place.
Not all his manoeuvres were free of controversy. In 2003, British media reports said he had struck a trusteeship deal with Mikhail Khodorkovsky, a Russian oil tycoon and Vladimir Putin foe, to transfer Khodorkovsky’s stake in the Yukos oil company to Rothschild in the event of his arrest. Khodorkovsky was arrested in October 2003 and later exiled. Rothschild did not confirm the reports.
Alongside his career as a high-powered financier, Rothschild played an energetic if sometimes secretive role in Israel, overseeing his family’s longrunning philanthropic activities there as head of the Yad Hanadiv foundation.
Rothschild married Serena Dunn, a racehorse owner, in 1961; she died in 2019. He had four children, Hannah, Beth, Emily and Nathaniel, and a number of grandchildren. Complete information on his survivors was not immediately available.
For all his standing among the world’s wealthy elite, Rothschild was openly critical of some of his peers in the international financial system. In 2012, four years after the economic crisis of 2008, he told The Jerusalem Report that he had “a lot of sympathy with people who protested about some of the excesses in the world of finance.”
“After all, here are characters who have made great fortunes, who have been in charge of a system which has been very damaging to many interests in the last five to 10 years,” he said. “They have had enormous benefits, but the banking system as a whole has had a crippling effect in a number of areas throughout the world.”