Family Affair

The Rothschilds are roving

It’s a little bare now,” apologizes Baron Guy de Rothschild, 72, waving his hand at the empty black lacquered walls of his office on the seventh floor at 21 Rue Laffitte in Paris. Indeed, the art works by Bernard Buffet and Francis Picabia have been packed away, and out front workmen are getting ready to chisel the famous family name out of the sandstone above the entryway. Reason: the Banque Rothschild is being nationalized by the socialist government of French President François Mitterrand, along with the country’s other major banks and holding companies. The Rothschilds, who are stepping out of the bank’s management, have demanded that the government operate the institution without the Rothschild name.

Nor has their bitterness at being nationalized been quenched by proposed government compensation payments of $100 million, a sum they believe is less than the bank’s worth.

But the members of the French Rothschild clan will not lack for things to do with their money. Unaffected by the nationalization are the nonbank personal holdings of Baron Guy and Cousins Baron Alain and Baron Elie, including New Court Securities, a U.S. investment firm based in New York City, which will now receive more of the family’s attention and money. And beginning Jan. 1, 1982, New Court will change its name to a more golden sounding sobriquet: Rothschild Inc.

Founded with $2 million in 1967, New Court today manages a portfolio worth more than $1 billion, including funds from such corporate clients as General Foods, TRW and Hughes Aircraft. New Court’s other owners include N.M. Rothschild & Sons in London, which represents the English branch of the family and is headed by Evelyn de Rothschild, 50, and the Rothschild Zurich bank, of which Swiss Cousin Baron Edmond de Rothschild is part owner.

New Court is an aggressive venture-capital firm that has some $200 million invested in fledgling American companies. Last year its return on current investment of $17 million was 35%. In July, its American chairman John P. Birkelund, 51, asked the Rothschilds for more control over the firm. Instead, the family sacked Birkelund, named Guy and Evelyn as cochairmen, and installed a new manager, Family Confidant Gilbert de Botton, 46.

The new Rothschild man in New York City had previously directed the family’s bank in Zurich, which grew from a paltry $2.5 million in 1968 to its present capitalization of more than $35 million. De Botton is currently investing heavily in sagging stocks of U.S. energy companies, especially those with large domestic reserves of oil and gas. He also plans to strengthen the firm’s venture-capital thrust. Says he: “The U.S. is the prime market hi the world for startup, small and medium-size companies.”

That bullishness on America’s prospects is shared by Co-Chairman Guy, who has been commuting monthly since last June between Paris and New Court’s offices in New York City’s Rockefeller Center. Guy will not move permanently to the U.S., and Cousin Elie’s son Nathaniel, 34, a graduate of the Harvard Business School, is a prime candidate to direct U.S. operations eventually. Says Guy: “My great-grandfather sent one of his sons, my grandfather Alphonse, to America in 1848. After returning to France, Alphonse pleaded with his father that the U.S. was the coming country and that there should be a House of Rothschild there. It’s an enormous pity that my grandfather’s advice was not heeded. As far as I’m concerned, we should have had a Rothschild bank in the U.S. since the middle of the 19th century. Our involvement in America now is really 100 years late in arriving.” ·