Rothschild Said to Start Investment Fund; Chairman’s Son Joins

Sept. 2 (Bloomberg) -- Rothschild, the largest family-owned bank, plans to raise a 500 million-euro ($711 million) investment fund as chairman David de Rothschild’s son joins the firm, two people familiar with the plan said.

Alexandre de Rothschild, 29, moved to the family bank from Argan Capital, Bank of America Corp.’s former European private equity division, to work on the project, said the people, who declined to be identified before the fundraising is completed. Rothschild Managing Director Marc-Olivier Laurent will oversee the fund, the people said.

The two-century-old firm, which is run by 66-year-old David de Rothschild, plans to buy minority stakes in closely held companies after the pace of global mergers and acquisitions dropped 46 percent in the past year. The fund’s backers include Rothschild partners and clients. It will target companies worth between 100 million euros and 500 million euros, the people said.

“It’s normal for them to bring in their own family members to ensure succession,” said Anis Bouayad, founder of Paris- based advisory firm AB Conseils. “The bank has always found a way to promote its own, while also bringing in outside talent into the top jobs.”

Javed Khan, who joined Rothschild from New York-based private equity firm Blackstone Group LP in June, and Emmanuel Roth, a former executive at investment firm Paris-Orleans, will also manage the fund, the people said. Rothschild plans to complete the fundraising before the end of the year, they said.

‘Family is Fine’

“In a business, the key is to have the best people,” David de Rothschild said in a 2005 interview, addressing the subject of succession. “The family is fine as long as they do a good job. If they don’t, it has to be someone else.”

David de Rothschild took managerial control of the U.K. side of the bank after his cousin Evelyn retired in 2004, cementing control of both the Paris and London businesses by a French Rothschild, a first for the family firm.

David’s younger brother, Edouard, stepped down in 2004 after helping to expand the French bank. Today, he oversees Galop, the French horse-racing association. David’s cousin, Eric, is chairman of Rothschild’s asset-management and private-banking units and also runs the family’s Chateau Lafite vineyard.