Very European, very private

MUMBAI: A dash of English with a splash of French accent, Baron David de Rothschild says what he needn’t have: “We are a European style investment bank and we think people value our advice.” Well, of course. The problem?

The old way of investment banking is walking in Dodo’s footsteps. Over the past 10 years, banks such as Kleinwort Benson, Morgan Grenfell have been acquired by bigger, well-built banks such as Dresdner and Deutsche. Barings collapsed. Lazard, which is closest to the business approach of Rothschild, had to go public to be able to raise more resources.

And even Goldman Sachs, that blue-blooded American bank, moved away from the partnership model and went public. Baron David de Rothschild is visiting the Indian operations after four years to take cognizance of the increasing Indian appetite for M&A activity and to also meet corporate czars before the news of their part in Tata-Corus deal becomes a distant memory.

Talking about the last 10 years and calling that history doesn’t impress Baron David. He talks about the two-hundred years of history that his firm has seen. The Rothschild family was a key player in Napoleanic and the Anglo-Prussian Wars as also the financing of the Suez Canal.

Legend has it that it financed Duke of Wellington as well as Napolean Bonaparte — talk about the perfect long-short strategy. They financed the creation of the diamond behemoth De Beers and the London Underground. But all that was in Europe.

In the US or in India where M&A markets are far more dynamic and less dependant on relationships in the Rothschild way, the bank has found the going tough. In India, for instance, it is way behind banks like Merrill, JM Morgan Stanley or Citi.

Though, to be fair, it did get called to the Tata-Corus deal. “A senior member of our team, who had worked with the UK Takeover panel, worked right through the deal,” says Baron David. It is expertise and people like this that Rothschild hopes will give it an edge.

“Most of our people have worked for a number of years. And in every important deal, we put our very best on the transaction. In other banks, the deal might be originated by an experienced hand but later gets passed on to youngsters, who are no doubt very good, but not as experienced.

It is not surprising then that our repeat business is very high,” says Baron David. One gets a distinct feeling that Rothschild is going against the grain on prevalent trends in its industry, but it is hard to argue against an institution that taken on history in the past and bested it several times.