Rothschild dynasty targets rich in bid to rebuild German arm

Skyscrapers stand illuminated in the financial district beyond the River Main in Frankfurt, Germany. (Bloomberg pic) 

FRANKFURT: The Rothschild dynasty is bulking up its German business in a bid to take on larger rivals in the increasingly competitive business of serving wealthy individuals.

Rothschild & Co, the Paris-based branch of the family, hired nine people in its German private wealth division last year to bring the total to 40.

The company is looking to add to that number, said Reinhard Krafft, who heads the business and sees “high-growth opportunities” in the country.

The company’s efforts to attract wealthy clients come as competitors including BNP Paribas and HSBC Trinkaus & Burkhardt also expand in Germany’s private-banking market, which is likely to put pressure on profit margins in the industry.

Krafft believes his firm’s access to private-equity investments – with the Rothschild family as co-investor – can give it an edge when it comes to attracting high-net-worth individuals.

The Rothschild family had left Frankfurt more than 100 years ago and didn’t return until 1989 when Rothschild & Co opened an office in Frankfurt and initially focused on corporate finance.

The company ranked among the top advisers of German companies last year in terms of the number of completed transactions, Bloomberg data show.

Rothschild & Co is creating a second pillar to add to its M&A advisory business in the country.

The company started with a small private-banking team, Krafft said.

“Now we are trying to increase the range in Germany in this area as well.”

Rothschild & Co last year added to its German base in Frankfurt by opening a private-wealth office in Dusseldorf, staffed by a team of six people hired from Deutsche Bank.

The company’s assets under management in Germany have quadrupled in the past five years and, according to Krafft, are now significantly more than 3 billion euros (US$3.4 million).

Worldwide, Rothschild’s wealth and asset management business managed nearly 70 billion euros at the end of June.

The company traces its roots to the banking dynasty started by Mayer Amschel Rothschild in Frankfurt in the 18th century.

He later sent his sons to various capitals across Europe to do business with cash-strapped governments, dealing with railway construction, revolutions and wars.

At the beginning of the 20th century, the Frankfurt branch ceased operations.

Rothschild & Co now employs a total of 140 people in Germany.

The Swiss arm of the family – Edmond de Rothschild – returned to the country in 2011 with an office in Frankfurt.