Arguably no family business dynasty can be declared the greatest of all time. There are too many variables. But the Rothschild dynasty comes pretty close. Yet the years ahead will test the dynasty more than ever before.
With the tragic death of one of their scions, Benjamin de Rothschild, and other scions – Jacob Rothschild, and Evelyn and David de Rothschild – no longer at the apex of their business acumen, questions arise whether the dynasty can prosper over the next hundred years? Will the fintech revolution bring down the house of Rothschild? Is the next generation of Rothschilds up to the challenges ahead?
Others within the extended family, less well known to the wider world, might step up in the years ahead
Let’s face it, no one has a clue. As the historian, Paul Johnson once said: “The Rothschilds are elusive…”, and this ViewPoint can’t predict their future any better than all the reams of books and articles written about them in the past.
But even a family who has survived as a business dynasty – survived countless wars, financial meltdowns, and anti-semitism – for more than 250 years face challenges. Challenges familiar to all families running businesses and challenges within the sector they operate in as well.
Rothschild & Co, the UK-based financial group, remains one of the pillars of the City of London. It sits in its gleaming new headquarters smack-bang in the middle of the City. So great is its importance in the financial world, if Rothschild & Co were to fall, it might almost seem to signal the end of the City of London as a financial centre.
Then there is the legendary financial entrepreneurship of the family. Most recently personified by the creation of RIT Capital Partners by Jacob Rothschild, which he turned into one of the best performing investment trusts in the UK. Investors in the trust have seen Berkshire Hathway-like returns for most of its history.
Entrepreneurship in finance is also illustrated by Edmond de Rothschild – run by another part of the extended Rothschild dynasty. Founded by Benjamin’s father in 1953, Geneva-based Edmond de Rothschild has become a hugely successful European-wide financial group. Benjamin efforts in this respect were paramount until he decided to step back from the running of the group.
But all these groups are facing arguably the biggest challenge to the financial services sector in more than 100 years. This challenge is represented by fintech, cryptocurrencies, and the whole gambit of the digital disruption faced by old economy businesses worldwide.
Family Capital has talked about these challenges to the financial sector before. But the question for all old economy businesses is whether they can adapt to these challenges in a transformative way, rather than from just an incremental perspective. The latter might ensure their survival, but not their continuing apex at the top of their sectors. That question isn’t less pertinent to the Rothschilds, despite their longevity as a business empire.
To meet those challenges, Rothschild needs to look to the next generation – like they have so successfully done in the past. At Edmond de Rothschild, Benjamin’s wife, Ariane, who chairs the board, is the most obvious heir with the death of her husband.
At Rothschild & Co, Alexandre de Rothschild took over from his father David as executive chairman in 2018. It’s more difficult at RIT Capital Partners to see who among Jacob’s siblings will emerge as the senior representative of his family. Perhaps it will be Jacob’s daughter, Hannah, who sits on the board of RIT Capital.
Others within the extended family, less well known to the wider world, might step up in the years ahead. Maybe one of them will start a hugely successful fintech business that can trade on the augustness of the Rothschild name, but not burdened by the legacy of the older financial empire.
Other entrepreneurial opportunities will arise for family members, and their extraordinary financial acumen and contacts are huge advantages when it comes to making these businesses work.
But next 20 or so years will decide whether the Rothschilds business dynasty remains one of the greatest ever in the world of family businesses.
If successful, then perhaps they can become the greatest business dynasty of all time.