December 29, 2008

The Rothschilds: the First Barons of Banking

Baron David de Rothschild, the head of the Rothschild bank. The Rothschilds have helped the British government since financing Wellington’s army to fight the French in 1815.

Baron David de Rothschild Sees a New World Order in 'Global Banking Governance'

By Rupert Wright, UAE National
Originally Published on July 11, 2008

Among the captains of industry, spin doctors and financial advisers accompanying British prime minister Gordon Brown on his fund-raising visit to the Gulf this week, one name was surprisingly absent. This may have had something to do with the fact that the tour kicked off in Saudi Arabia. But by the time the group reached Qatar, Baron David de Rothschild was there, too, and he was also in Dubai and Abu Dhabi.

Although his office denies that he was part of the official party, it is probably no coincidence that he happened to be in the same part of the world at the right time. That is how the Rothschilds have worked for centuries: quietly, without fuss, behind the scenes.
"We have had 250 years or so of family involvement in the finance business," says Baron Rothschild. "We provide advice on both sides of the balance sheet, and we do it globally."
The Rothschilds have been helping the British government -- and many others -- out of a financial hole ever since they financed Wellington’s army and thus victory against the French at Waterloo in 1815.

According to a long-standing legend, the Rothschild family owed the first millions of their fortune to Nathan Rothschild’s successful speculation about the effect of the outcome of the battle on the price of British bonds. By the 19th century, they ran a financial institution with the power and influence of a combined Merrill Lynch, JP Morgan, Morgan Stanley and perhaps even Goldman Sachs and the Bank of China today. In the 1820s, the Rothschilds supplied enough money to the Bank of England to avert a liquidity crisis.

There is not one institution that can save the system in the same way today; not even the U.S. Federal Reserve. However, even though the Rothschilds may have lost some of that power -- just as other financial institutions on that list have been emasculated in the last few months -- the Rothschild dynasty has lost none of its lustre or influence.

So it was no surprise to meet Baron Rothschild at the Dubai International Financial Centre. Rothschild’s opened in Dubai in 2006 with ambitious plans to build an advisory business to complement its European operations. What took so long? The answer, as many things connected with Rothschilds, has a lot to do with history. When Baron Rothschild began his career, he joined his father’s firm in Paris. In 1982 President Francois Mitterrand nationalised all the banks, leaving him without a bank. With just $1 million in capital, and five employees, he built up the business, before merging the French operations with the rest of the family’s business in the 1990s.

Gradually the firm has started expanding throughout the world, including the Gulf.
"There is no debate that Rothschild is a Jewish family, but we are proud to be in this region. However, it takes time to develop a global footprint," he says.
An urbane man in his mid-60s, he says there is no single reason why the Rothschilds have been able to keep their financial business together, but offers a couple of suggestions for their longevity.
"For a family business to survive, every generation needs a leader," he says. "Then somebody has to keep the peace. Building a global firm before globalisation meant a mindset of sharing risk and responsibility. If you look at the DNA of our family, that is perhaps an element that runs through our history. Finally, don’t be complacent about giving the family jobs."
He stresses that the Rothschild ascent has not been linear -- at times, as he did in Paris, they have had to rebuild. While he was restarting their business in France, his cousin Sir Evelyn was building a British franchise. When Sir Evelyn retired, the decision was taken to merge the businesses. They are now strong in Europe, Asia especially China, India, as well as Brazil. They also get involved in bankruptcy restructurings in the U.S., a franchise that will no doubt see a lot more activity in the months ahead.

Does he expect governments to play a larger role in financial markets in future?
"There is a huge difference in the Soviet-style mentality that occurred in Paris in 1982, and the extraordinary achievements that politicians, led by Gordon Brown and Nicolas Sarkozy, have made to save the global banking system from systemic collapse," he says. "They moved to protect the world from billions of unemployment. In five to 10 years those banking stakes will be sold -- and sold at a profit."
Baron Rothschild shares most people’s view that there is a New World Order. In his opinion, banks will deleverage and there will be a new form of global governance.
"But you have to be careful of caricatures: we don’t want to go from ultra liberalism to protectionism."
So how did the Rothschilds manage to emerge relatively unscathed from the financial meltdown?
"You could say that we may have more insights than others, or you may look at the structure of our business," he says. "As a family business, we want to limit risk. There is a natural pride in being a trusted adviser."
It is that role as trusted adviser to both governments and companies that Rothschilds is hoping to build on in the region.
"In today’s world we have a strong offering of debt and equity," he says. "They are two arms of the same body looking for money."
The firm has entrusted the growth of its financing advisory business in the Middle East to Paul Reynolds, a veteran of many complex corporate finance deals.
"Our principal business franchise is large and mid-size companies," says Mr Reynolds. "I have already been working in this region for two years and we offer a pretty unique proposition. We work in a purely advisory capacity. We don’t lend or underwrite, because that creates conflicts. We are sensitive to banking relationships. But we look to ensure financial flexibility for our clients."
He was unwilling to discuss specific deals or clients, but says that he offers them "trusted, impartial financing advice any time day or night." Baron Rothschilds tends to do more deals than their competitors, mainly because they are prepared to take on smaller mandates.
"It’s not transactions were are interested in, it’s relationships. We are looking for good businesses and good people," says Mr Reynolds. "Our ambition is for every company here to have a debt adviser."
Baron Rothschild is reluctant to comment on his nephew Nat Rothschild’s public outburst against George Osborne, the British shadow Chancellor of the Exchequer. Nat Rothschild castigated Mr Osborne for revealing certain confidences gleaned during a holiday in the summer in Corfu.

In what the British press are calling "Yachtgate," the tale involved Russia’s richest man, Oleg Deripaska, Lord Mandelson, a controversial British politician who has just returned to government, Mr Osborne and a Rothschild. Classic tabloid fodder, but one senses that Baron Rothschild frowns on such publicity.
"If you are an adviser, that imposes a certain style and culture," he says. "You should never forget that clients want to hear more about themselves than their bankers. It demands an element of being sober."
Even when not at work, Baron Rothschild’s tastes are sober. He lives between Paris and London, is a keen family man -- he has one son who is joining the business next September and three daughters -- an enthusiastic golfer, and enjoys the "odd concert." He is also involved in various charity activities, including funding research into brain disease and bone marrow disorders.

It is part of Rothschild lore that its founder sent his sons throughout Europe to set up their own interlinked offices. So where would Baron Rothschild send his children today?
"I would send one to Asia, one to Europe and one to the United States," he said. "And if I had more children, I would send one to the UAE."
Meyer Rothschild died on September 19, 1812. In his will he spelled out specific guidelines that were to be maintained by his descendants:

1) All important posts were to be held by only family members, and only male members were to be involved on the business end. The oldest son of the oldest son was to be the head of the family, unless otherwise agreed upon by the rest of the family, as was the case in 1812, when Nathan was appointed as the patriarch.

2) The family was to intermarry with their own first and second cousins, so their fortune could be kept in the family, and to maintain the appearance of a united financial empire. For example, his son James (Jacob) Meyer married the daughter of another son, Salomon Meyer. This rule became less important in later generations as they refocused family goals and married into other fortunes.

3) Rothschild ordered that there was never to be "any public inventory made by the courts, or otherwise, of my estate ... Also I forbid any legal action and any publication of the value of the inheritance."

1991 "In searching for a new enemy to unite us, we came up with the idea that pollution, the threat of global warming, water shortages, famine and the like would fit the bill."
- Club of Rome 1991

July 6, 2007 David Rothschild's says he and his family (that own half of the world's wealth) have no plans for a global carbon dioxide (what we breath out) tax. Ow that's good news, no tax on breathing. Plants that breath in carbon dioxide will be happy as well...or will they...

April 21, 2009 Whoops, the same Rothschild family are setting up carbon tax "banks" here in Australia and abroad!!

Flashback: Rothschild Launches Carbon Credit Investment Fund

Rothschild Australia and Australia-based environmental group E3 International have launched a fund which will allow highly polluting companies to offset their emissions by buying carbon credits from cleaner firms. With individual investments of no less than $100,000, the Consortium hopes to raise $2 million. It is expected that by June 2003 the carbon credits purchased will be ready for distribution among investors. "Rothschild, E3 Launch Carbon Credit Investment Fund," - National Energy Technology Laboratory, Carbon Sequestration Newsletter, October 2002

Originally Published on September 3, 2002

Billed as the first of its kind in the Asia-Pacific region and soon to be followed by other similar private investment vehicles, the Carbon Ring Consortium seeks to raise $2 million, with individual investors obliged to pay $100,000.
"With recent developments in international climate change policy, the question is no longer if, but when the global carbon trading market will emerge," said Richard Martin, chief executive officer of Rothschild Australia.
Rothschild said in a prospectus that the Carbon Ring Consortium would be open for investments until October 30. [See The Rothschilds: the First Barons of Banking]

It would be wrapped up in June 2003, when the carbon credits purchased will be distributed to investors pro rata.

Trading environmental credits is an emerging market designed to allow firms that fail to meet emissions standards to buy credits from other firms that undercut their targets.

The Kyoto accord signed by developing nations in the Japanese city of that name envisages some carbon credit trade between countries with so-called carbon sinks - forests - and others that produce higher levels of pollution than they are allowed to.

The same applies to companies, and a nascent market has already emerged in the United States where some states have limits on acid rain components like sulphur dioxide and others have limits on carbon dioxide emissions.

Greenhouse gases such as carbon dioxide are blamed by many scientists for rising world temperatures.

The investment bank said it was estimated that the global carbon trading market could be worth up to $150 billion by 2012.

It said it looked increasingly likely that the 1997 Kyoto Protocol on reducing greenhouse gas emissions would be ratified by enough countries to come into effect, notwithstanding the decision of the United States and Australia to reject the accord.

The process of investing will involve workshops to allow investors to gain hands-on knowledge of the new market.

The unregistered, managed investment scheme will be the first in a series of private investment vehicles that Carbon Ring Pty Limited, a joint venture between Rothschild and E3 International, expects to launch in the coming years, the partners said.

Rothschild Australia to Take the Lead in the Global Carbon Trading Market

PR NewsWire
March 22, 2009

Rothschild Australia and E3 International are set to become key players in the international carbon credit trading market, an emerging commodity market that analysts estimate could be worth up to US$150 billion by 2012.

In a move that will re-shape the fledgling emissions trading market, Rothschild Australia and E3 International today announced their intention to launch the Carbon Ring Consortium — an investment vehicle that will provide companies in the Asia Pacific Region with an innovative way of learning about and understanding their risks in the new carbon market.

The Carbon Ring Consortium is the first of its kind in the Asia-Pacific Region, and is the first in a series of private investment vehicles that Carbon Ring Pty Ltd will launch in coming years.

Richard Martin, the chief executive officer of Rothschild Australia said:
“With recent developments in international climate change policy, the question is no longer if, but when the global carbon trading market will emerge. Rothschild Australia, through Carbon Ring, intends to be at the forefront of this market, providing private investment vehicles to companies seeking to offset their greenhouse gas emissions liabilities.” [See The Rockefellers, Obama and the Carbon Tax Scam]
The Carbon Ring Consortium allows companies with a future carbon liability to purchase a range of carbon credits and obtain a practical insight into the operation of this new market. Carbon credits will be bought from domestic and international projects that achieve a reduction in greenhouse gas emissions. These carbon credits will be distributed pro rata to Consortium investors.
“The Carbon Ring Consortium is an important first step for Rothschild and for our clients,” said Mr. Martin.

The Consortium should appeal to companies that are faced with a greenhouse liability and are significant users or producers of energy, such as electricity generators, heavy industrials, oil companies, major manufacturers or airlines, amongst many others.

“It provides investors with an opportunity to learn about the market through an investment in a low risk, low cost investment vehicle, created specifically to acquire a diverse range of carbon credits. Participants will also share in significant knowledge and intellectual property,” Mr. Martin said.
During its life, the Carbon Ring Consortium intends to purchase a range of carbon credits, in a range of jurisdictions and from a range of sources. In the process, the Consortium will expose investors to many of the most pressing issues that corporations will have to address if they are to participate in the emerging carbon market. It will also give investors a practical insight into the buying and selling of carbon credits in the present market, without the need to invest in significant trading infrastructure or to assume undue risk.

Mr. Martin believes that there are many reasons why an organisation would invest in the Consortium: gaining practical experience in an emerging market; offsetting their greenhouse gas emissions; hedging their investments in new infrastructure; or in response to the expectations of the public, customers or shareholders.

Craig Windram, the director of E3 International and a partner in Carbon Ring, said:
A carbon liability brings with it considerable financial risk for organisations, and early planning to deal with this risk will add to an organisation’s competitive advantage — that’s where Carbon Ring comes in.

“Few companies have developed a practical understanding of the emerging carbon market. For companies on either side of the equation, as either buyers or sellers, the Carbon Ring Consortium will provide the opportunity to ‘learn by doing’. This experience will be vital in assisting businesses to formulate policy, to understand and identify their risks, and to demonstrate leadership in an area of growing public concern,” Mr. Windram said.
The Carbon Ring Consortium is an unregistered, managed investment scheme. Designed to be a tailored, limited-life vehicle, it will document the legal and accounting process involved in the purchase, settlement and distribution of various carbon credit assets.

Requiring an investment of US$100,000, with a portion returned to investors in the form of carbon credits, the Consortium is intended to provide investors with a low cost, low risk and structured entry into this new market.

About Rothschild

N M Rothschild & Sons has been at the centre of the world’s financial markets for more 200 years. Today, the firm is a global investment bank, which provides independent and quality advice to governments, corporations and individuals worldwide through a network of professionals in 40 offices across more than 30 countries. The firm employs 2,500 employees worldwide.

About E3

The E3 Group is a hybrid organisation dedicated to making the business case for sustainable development. It is part strategic management consultancy, part environmental think tank, part project developer and part investment manager.

The E3 Group comprises a number of companies that have developed around the business of sustainability. The Group includes a conventional consulting business, an environmental software company, a dedicated renewable energy project promoter and the Carbon Ring Consortium. The principal operating company in the group is E3 International Pty Limited, which is headquartered in Australia.

Carbon Advice Group Announces the Appointment of Oliver Rothschild

Press Release
May 4, 2009

Carbon Advice Group Plc is pleased to announce the appointment of Oliver Rothschild as its chairman. Matthew Sullivan, Founder and CEO of Carbon Advice Group, welcomed the appointment saying:
“We are delighted that Oliver Rothschild has agreed to join Carbon Advice Group Plc as Chairman. We believe that Oliver will bring significant experience and international credibility to the Board of Carbon Advice Group Plc as it rapidly extends its carbon offsetting services and network of environmental entrepreneurs across Europe and the United States”.
Oliver Rothschild said:
Carbon Advice Group Plc provides a unique way of engaging individuals and businesses in combating climate change across borders and nationalities. I am pleased to join Carbon Advice Group Plc at such an exciting stage in the company’s growth. I look forward to the exciting challenges of the future and working with my colleagues at Carbon Advice Group Plc to ensure the company provides a quality service to justify the public’s continuing support”.
Continued Carbon Advice Group founder Matthew Sullivan:
“We want to motivate the average person in the street to get online, join our global network, build their own carbon offsetting website and get the message across to everyone they know”.

“Everyday we see, hear and read about the catastrophic effects of global climate change. We all know we need to do something, and we need to do it now. We believe the appointment of Oliver Rothschild will help Carbon Advice Group Plc get closer to achieving our objective of bringing carbon emissions reduction and offsetting into the mainstream,” Sullivan continued.

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