In May 1996, we thought it was goodbye to the family of well-known philanthropist Baron Edmond de Rothschild. His grandson, Edmond, was by then in very poor health and his great-grandson Baron Benjamin de Rothschild was considered unlikely to keep up activity in Israel. That month the family sold Clali bank, its principal financial asset here. A year later, in November 1997, grandson Edmond died in Paris, aged 71, and was succeeded by his son Benjamin. The Rothschild group's announcement, last week, that it was resuming financial activity in Israel took many people by surprise. In all the years his father had been active in this country, Benjamin himself had never been involved.
For the purpose of this comeback, the Rothschild group set up a subsidiary of French bank La Compagnie Financiere Edmond de Rothschild, to be known in Israel as Edmond de Rothschild Investment Services. It will engage in investment banking of the kind the Rothschild group specialises in. Benjamin Rothschild will be arriving in Israel in a few days time with some of the group's senior executives. In contrast to previous ventures in this country, the group is here this time for purely business reasons.
Edmond Rothschild was one of the founders of and the principal shareholder in Israel Corporation, until the Eisenberg family took control. For many years, he also held Clali Bank, known for its very conservative approach, and which specialised in granting loans only to applicants not in need of the money. The bank's manager was Avraham Bigger, who toed Rothschild's policy line: solidity, exclusivity and unpretentiousness.
Sold in 1996 to the Investec group of South Africa, the bank underwent a metamorphosis and launched an aggressive marketing campaign. Following the sale, the Rothschilds retained a 50% business holding in the Caesarea Foundation, parent of the Caesarea Development Company. This was an historic asset - in 1953, Rothschild donated 30,000 dunam (7,500 acres) in Caesarea to the government, and this formed the basis for the company he headed for forty years. Today, the company's foundation fund holds $100 million and all its profits are earmarked for donations, mainly in health and higher education.
Not all Rothschild's business experiences in Israel were positive ones. The battle he waged over the Israel Corporation left scars, as did various fights he entered with the government in the fifties and sixties. In the last years of his life, Rothschild was at daggers drawn with Carmel Mizrahi, which had used his name on some of its wines without permission. He was expanding his investments in wineries in France at the time, and was not at all pleased to have Israeli wines named after him.
Zionist motives played a bigger part in Edmond Rothschild's business activity than did business motives. To understand why this was so, one must recall the Rothschild family's place in this country's history, and its distinguished contribution to Jewish resettlement here. The first wealthy Rothschild was Mayer Amschel (1744-1812), antique dealer and numismatist, who formed close business ties with German aristocrat Wilhelm IX, landgrave of Hesse-Kassel. Forced to flee when Germany was invaded by Napoleon's troops, Wilhelm asked Amschel's son Nathan Meyer (1777-1836) to invest his money in securities in London. Nathan did famously with his investments, becoming a key figure on London's stock exchange. He served the British government by transferring large sums of money to various parts of Europe; and with the help of his brothers, founded banks in Naples, Vienna, Frankfurt and Paris. Meyer married the sister-in-law of Moses Montefiore and founded the Israeli branch of the British Rothschild dynasty. The latter, incidentally, has hardly any business investment in Israel, other than the foundation it set up years ago for making relatively small investments, especially in activities deriving from the peace process.
Meyer's younger brother James Jacob (1792-1868) founded the French branch of the Rothschilds. In 1812 he settled in Paris where he founded "Rothschild Freres". Philanthropist Edmond de Rothschild (1845-1934), son of James Jacob, was renowned for his very costly art collection, his great devotion to philanthropy and the assistance he extended to early farming settlers in Palestine. The family today holds an all-European banking group specialising in private banking. It is active in Geneva, London, Luxembourg and Paris. The family also specialises in the management of funds for institutional clients, venture capital funds and ramified financial activity consisting mainly in the brokering of mergers and acquisitions.
At the end of the eighties and in the nineties, Edmond de Rothschild considerably reduced his business activity in Israel. This was thought to be due to health constraints. The Rothschild family, no longer what it once was, still basks in the light of past glories. Owning very substantial assets, it enjoys good standing in the global business community, but rivals beset it on all sides. The family, for its part, still maintains a conservative business policy, and some circles today feel it has failed to keep up with the times.
Published by Israel's Business Arena November 17, 1999