Mili Note: These boys have been in business for a long time. Mayer, mentioned below, sold Hessians to the English to send over here to fight the colonists in 1775-79 while his son sent aid from France to the colonies. Both were done on “credit,” of course, since the Crown was near bankruptcy and the Americans, well, we didn’t have anything to offer once British shipping was gone. Then Alexander Hamilton made sure we put the new government under those debts. We’ve owed them money ever since. Screwed from the get-go, folks.
More than 200 years ago a German banker, Mayer Amschel Rothschild, sent his five sons to different European cities to guarantee the survival of what became one of the most prominent banking dynasties.
This month, his great-great-great-grandson David de Rothschild, a baron, took an equally unusual step to ensure the future of the family-owned firm: For the first time, he passed some responsibilities of running Rothschild to someone outside the family.
Rumors were ripe for some years in the banking industry about whom Baron David, 67, would appoint as his successor to run the group of financial advisory and wealth management companies. The Rothschild family is not short of younger family members, but only the baron’s 29-year old son, Alexandre, is currently working at the firm and considered by himself and the family as too young to take over from his father.
Baron David said he felt it was time to rethink the bank’s management structure, especially because he wanted to focus more on clients and less on managing the firm’s 950 bankers, who are known for their free-wheeling, entrepreneurial spirit and tenacious relationship-building skills — even wining and dining clients at the family’s vineyards, like Château Lafite in the Bordeaux region of France.
As a result, Baron David appointed one of them, Nigel Higgins, a 27-year Rothschild veteran in London and co-head of its investment banking unit, to become chief executive. The baron retained some control over the family empire by remaining executive chairman. It is the first time in the firm’s history that those roles have been split.
“If you’re not totally self-centered, which I hope I am not, one thinks about how to increase stability of the firm internally and externally,” Baron David said during a recent interview. “You come to the conclusion that it’s time to make a change. It’s just natural and healthy.”
The change, which took effect on March 1, came just four months after the sudden death of Bruce Wasserstein, chairman and chief executive of Lazard, one of Rothschild’s fiercest competitors. Without a succession plan, it took the firm about a month to appoint a permanent successor. But Baron David denied that his decision to split the roles and appoint Mr. Higgins had anything to do with events at Lazard.
For many in the banking industry, the appointment of Mr. Higgins did not come as a surprise. A 49-year-old from South London, he joined Rothschild in 1982 after graduating with a degree in history from Oxford University and has worked at the firm’s London office ever since.
“What they need is just someone to steer the ship in a steady way,” said Jason Kennedy, head of the recruitment firm Kennedy Associates, which is based in London. “David’s not retiring. He’ll give Nigel enough rope, but if he sees he’s hanging himself and the bank with it, he’ll step in.”
Just as in the 1760s, the family is still central to the firm’s culture and success. Rothschild famously made its fortune financing the Duke of Wellington’s battle against Napoleon in 1815 and the firm continued to offer support and counsel to queens, emperors and governments. Last year, Rothschild advised the U.S. government on the reorganization of the country’s car industry.
“There is a mystique around the brand, which the organization rightly nourishes and maintains,” said Jonathan Baines, chairman for Europe, the Middle East and Africa at the executive recruitment firm Korn/Ferry Whitehead Mann.
As executive chairman, Baron David — always impeccably dressed with a handkerchief neatly folded in his top suit pocket — is expected to continue to nourish client relationships. Mr. Higgins is responsible for coordinating the bankers across Rothschild’s 50 offices in 36 countries and attracting new talent.