ROTHSCHILD AND ROCKEFELLER FAMILIES TEAM UP FOR SOME EXTRA WEALTH CREATION

The Rothschild and Rockefeller families have teamed up to buy assets from banks and other distressed sellers in a union between two of the best-known names in financial history.

By Alistair Osborne, Business Editor 30 May 2012

RIT Capital Partners, which is chaired by Lord Rothschild, has taken a 37pc stake in Rockefeller Financial Services, the family’s wealth advisory and asset management wing. It has snapped up the holding from French bank Société Générale for less than £100m.

The transatlantic alliance cements a five-decade acquaintance between the now ennobled Jacob Rothschild, 76, and David Rockefeller, 96, the grandson of the ruthlessly acquisitive American oilman and philanthropist John D Rockefeller.

The two patricians now plan to capitalise on their family names to buy other asset managers or their portfolios, using their networks of top-notch contacts to ensure they get a seat at the table for any deal.

“We’ve known each other for a long time, they have a good business,” said Lord Rothschild yesterday. “We haven’t got a presence in the US and this brings together two formidable names in finance.”

He said the two firms planned to capitalise on current market conditions where banks, like SocGen in this instance, are selling non-core assets to rebuild capital ratios. “At a time when big banks are destabilised, there may well be opportunities,” he said. “We could buy an asset management company or grow one. Rockefeller already has $34bn (£21.9bn) assets under administration.”

He said David Rockefeller was still “very involved” in the business, though it is run day to day by chief executive Reuben Jeffery.
The Rockefeller group goes back to 1882, set up to invest the family money made by John D Rockefeller’s Standard Oil, the forerunner for today’s Exxon Corporation, which he built with a Darwinian aggression. “Do you know the only thing that gives me pleasure? It’s to see my dividends coming in,” he once said.
The Rothschild banking dynasty has its roots in the 18th century when Mayer Amschel Rothschild set up a business in Frankfurt.
Lord Rothschild fell out three decades ago with his cousin Sir Evelyn de Rothschild, who then ran the UK branch of the family bank NM Rothschild. That sprang to fame in 1815 when it bought government bonds in anticipation of Napoleon’s defeat at Waterloo.
Lord Rothschild’s relations with the French side of the family have been better though and he likened the Rockefeller deal to RIT’s tie-up earlier this year with the Edmond de Rothschild Group, which has €150bn (£120bn) under management.
“We think that having that span of interests in Europe and America – as well as China – will give us a better chance of finding exceptional investment opportunities,” he said.
RIT, which has net assets £1.9bn, has had a tricky few months with the shares down about 14pc in the past year. They fell 6 today to £11.25.
Lord Rothschild said: “Everyone has been marked down. We didn’t have a brilliant year on the quoted side but we did do very well on the private side,” realising investments in North Sea operator Agora Oil and Gas and credit manager Harbourmaster.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9300784/Rothschild-and-Rockefeller-families-team-up-for-some-extra-wealth-creation.html

GEORGE SOROS SAYS GERMANY HAS THREE MONTHS TO SAVE THE EUROZONE

George Soros, the billionaire investor, has warned Germany it has three months to save the eurozone or risk the destruction of the European Union and a “lost decade”.

George Soros, the billionaire investor, said Germany would do the least required to save the euro Photo: AP

By Angela Monaghan, Economics Correspondent 03 Jun 2012

Speaking at a conference in Italy Mr Soros said the eurozone’s fate lay firmly with Germany, which he urged to agree to measures which would help the region’s ailing banking system and ease borrowing costs among the most troubled member states.

“In my judgment the authorities have a three months’ window during which they could still correct their mistakes and reverse the current trends,” he said.

“By the authorities I mean mainly the German government and the Bundesbank because in a crisis the creditors are in the driver’s seat and nothing can be done without German support.

“In the 1980’s Latin America suffered a lost decade; a similar fate now awaits Europe. That is the responsibility that Germany and the other creditor countries need to acknowledge.”

Mr Soros, who famously made $1bn betting against the pound in 1992, said the Greek crisis would come to a head this autumn.

He argued that although Greek voters were likely on June 17 to elect a government prepared to abide by the austerity terms required to qualify for future bailout funds, the terms would ultimately prove impossible to meet.
“No government can meet the conditions so the Greek crisis is liable to come to a climax in the fall. By that time the German economy will also be weakening so that Chancellor Merkel will find it even more difficult than today to persuade the German public to accept any additional European responsibilities. That is what creates a three months’ window.”
Arguing that the eurozone crisis “threatens to destroy the European Union”, he said the region’s banks would need a European deposit scheme in order to stem the capital flight already evident.
He also supported Spain’s call for the banks to be able to access direct financing from the European Stability Mechanism, the bailout fund, and said heavily indebted countries would need relief on their financing costs.
There are various ways to provide it but they all need the active support of the Bundesbank and the German government.”
Spanish borrowing costs have spiked to unsustainable highs during the crisis while German borrowing costs are at record lows as investors rush to place their money in the safest place.
France, Italy and Spain are in favour of the introduction of so-called eurobonds, which would essentially pool the debt of all eurozone members, spreading risk, but Germany is strongly opposed to the idea.
Mr Soros said that while an orderly break-up of the euro could be possible “in a few years’ time”, the likelihood was that it would survive because a collapse would come at too high a price for Germany.
He said Germany would be left with large unenforceable claims against the periphery countries, with the Bundesbank alone having over a trillion euros of claims against other central banks by the end of this year.
“So Germany is likely to do what is necessary to preserve the euro – but nothing more.” He said Europe would ultimately become “a German empire with the periphery as the hinterland.”
http://www.telegraph.co.uk/finance/financialcrisis/9308964/George-Soros-says-Germany-has-three-months-to-save-the-eurozone.html

LORD ROTHSCHILD TAKES £130M BET AGAINST THE EURO

Lord Rothschild has taken a near-£130m bet against the euro as fears continue to grow that the single currency will break up.

Lord Rothschild has led RIT since 1988 Photo: AP

By James Quinn 18 Aug 2012

The member of the banking dynasty has taken the position through RIT Capital Partners, the £1.9bn investment trust of which he is executive chairman.

The fact that the former investment banker, a senior member of the Rothschild family, has taken such a view will be seen as a further negative for the currency.

The latest omen follows news in The Daily Telegraph late last week that the government of Finland is already preparing for the euro’s break-up.

RIT, which Lord Rothschild has led since 1988, had a -7pc net short position in terms of principal currency exposures on the euro at the end of July, up from -3pc at the end of January. Given a net asset value of £1.836bn at the end of July, the position is worth £128m.

Sources close to RIT suggested that the position was not a dogmatic negative view on the euro as a currency, but rather a realistic approach on a currency that remains relatively weak.

It is not the first time Lord Rothschild has used currency positions as a form of hedge. RIT significantly increased its exposure in sterling after the currency’s decline in 2008, but then scaled back on both the sterling and the euro, anticipating the ensuing recessions in both regions.
Some 53pc of RIT’s assets were in US dollars at the end of July, in part a reflection of its deal to buy a 37pc stake in Rockefeller Financial Services at the end of May.
Lord Rothschild is not alone in seeing value in shorting – or selling down – the euro. At a conference organised by business news channel CNBC in July, Mary Callahan Erdoes, head of JPMorgan Asset Management, said “shorting the euro” when asked for her single best investment idea.
In June, George Soros – the billionaire investor best known in the UK for helping to force sterling out of the European Exchange Rate Mechanism in 1992 by betting against the British currency – said that European leaders at that point had a “three-month window” to save the euro.
http://www.telegraph.co.uk/finance/financialcrisis/9484435/Lord-Rothschild-takes-130m-bet-against-the-euro.html