|The Bahamas Investor Magazine
June 23, 2009
June 23, 2009
Gian Fadri Pinösch
The name Rothschild first emerged from the obscurity of the Frankfurt back streets over 200 years ago, and quickly became synonymous with quality and excellence, whether in the field of financial services, wine, science, fine art, or architecture. The distinguished name has had a presence in The Bahamas for more than a decade, recently underscoring its commitment to the jurisdiction by establishing new offices in the west end of New Providence.
Mayer Amschel Rothschild, born in 1743, founded the Rothschild dynasty. Since then, seven generations of Rothschilds have been devoted to financial services.
Starting out as a humble merchant and currency dealer, Mayer Amschel Rothschild came to specialize in old coins. After expanding the coin collections of William of Hanau, one of Europe’s wealthiest princes and a knowledgeable coin collector, he became his financial adviser and, during the upheavals of the Napoleonic wars and princely exiles, his wealth manager.
By dint of hard work, he was appointed court agent to the Austrian Crown, Thurn und Taxis and many European royal houses. With the support of his five sons, he laid the foundations of his family’s business in Europe: five branches, whose ennoblement and success would further promote the Rothschild reputation.
Amschel, the eldest, took the helm of the family business in Frankfurt upon the death of his father in 1812. Nathan set up operations in London in 1798, Salomon in Vienna in 1820, James in Paris in 1811 and Carl in Naples in 1821.
Merchants, financiers, bankers to royal families and governments, major developers, builders of railways, patrons and collectors, sometime scholars and statesmen, always philanthropic, the Rothschilds have remained unchanged in every endeavour—from the creation of De Beers and the financing of Royal Dutch to the privatization of Banque de Paris et des Pays Bas.
Today, the French and Swiss entities, together with their subsidiaries, especially along the Pacific Rim, have adapted skilfully to the new demands of venture capital and financial engineering.
For almost a century and a half, the name Rothschild has also been associated with fine wines. The spirit of innovation is evident in the family’s winemaking, from the grands crus of Château Lafite to the cru bourgeois vineyard of Château Clarke and groundbreaking ventures in South America and South Africa.
The Rothschild family also has a long tradition of philanthropy. A wide range of Rothschild foundations, operating throughout Europe and in Israel, in fields as diverse as medical science, housing, education and academic excellence, provide opportunities for individual and social development.
The LCF Rothschild Group
Created in 1953 by Baron Edmond de Rothschild and now directed by his son, Baron Benjamin de Rothschild, the Geneva-based LCF Rothschild Group operates in the world’s major financial centres and employs nearly 2,500 people. By the end of 2007, the group was managing around $90 billion in assets, with growth of around 20 per cent per year since Baron Benjamin de Rothschild became chairman.
The LCF Rothschild Group upholds the fundamental values of private banking—experience, skill, integrity, trust and confidentiality. This corporate culture is applied to a single purpose: to dedicate the experience of seven generations to the management of private and institutional portfolios.
The professional management of private assets is concerned above all with preserving wealth—maximum performance for its own sake is a separate issue. It has been the experience of the group that the true value of a banker is revealed in times of difficulty rather than during stock market booms.
A large responsibility rests on the analysts and economists. They influence investment strategies, the balancing of risk across currencies and countries, as well as recommendations and the careful selection of investment vehicles. In constant touch with worldwide intelligence sources, they contribute to the overall policy defined by the group’s investment committee. Portfolio managers work within these guidelines to devise individual strategies for each client.
Sweeping changes in the world demand a global approach to markets, capital flows and currency rates. Grasping and anticipating these developments is a daunting task requiring shrewd analysis and speedy decision-making, the stuff of highly adaptable individuals equally at home in new technologies and innovative financial vehicles.
Hedge funds worldwide
If Alfred Winslow Jones created the concept of hedge funds in 1949, the LCF Rothschild Group pioneered the multimanager concept by setting up in 1969, in Geneva, the very first fund of hedge funds worldwide.
For a group such as LCF Rothschild, it is vitally important to operate branches and affiliates worldwide, flanked by a global network of correspondents. The group is currently present in most financial centres, such as London, Luxembourg, Paris, Monaco, Hong Kong, Tel Aviv and Nassau.
Strong synergies have been developed between the disciplines practised and the group’s various establishments, always with the objective of providing clients with well-established professional expertise and quality service.
Although private banking is the core business of the group, the LCF Rothschild Group is active in many other fields in finance: fund management and administration, real estate, brokering, insurance, corporate finance, mergers and acquisitions, risk management, trust and company administration.
With a robust international presence and employees spanning the globe, the LCF Rothschild Group has become one of Europe’s most dynamic independent banks.
In 1997, a decision was made to establish a presence in The Bahamas in order to provide LCF Rothschild Group clients with offshore asset management and fiduciary services.
The Bahamas was chosen for a number of reasons. Not only is it one of the top financial centres in the world, but also it is an English-speaking country, an independent member of the British Commonwealth and it has one of the oldest and most stable political democracies in the western hemisphere with confidentiality laws comparable to those of Switzerland. There is an adequate legal structure, a high standard of communication and an abundant supply of trained and experienced manpower.
In addition, The Bahamas is one of the world’s most attractive tax-neutral jurisdictions, in particular for private residence.
The offices of Banque Privée Edmond de Rothschild Ltd were opened in 1998 in downtown Nassau with the objective being to provide a comprehensive range of private and international corporate and trust services.
The bank is a fully owned subsidiary of Banque Privée Edmond de Rothschild SA, Geneva, Switzerland, with an unrestricted bank and trust licence. It is a member of the Association of International Banks and Trust Companies of The Bahamas, the Bahamas Financial Services Board and The Bahamas Chamber of Commerce.
Over the subsequent ten years the industry has seen new and amended legislation introduced, making it sufficiently strong to meet the challenges of a developing and sophisticated financial sector.
The bank experienced a high and steady growth over this period, expanding the workforce from three when it opened, to 16 employees. It therefore considered the possibility of expanding its presence in The Bahamas in a more permanent way.
A parcel of land was purchased in the exclusive region of Lyford Cay and construction began in 2007. The Bank moved to its brand new state-of-the-art facilities at Lyford Financial Centre Lyford Cay No 2 in November 2008.
Banque Privée Edmond de Rothschild is satisfied that in The Bahamas it has found a partner that understands the needs of a highly sophisticated clientele.
Gian Fadri Pinösch
Gian Fadri Pinösch has been the managing director and chief executive officer of Banque Privée Edmond de Rothschild Ltd in Nassau since 2001. Prior to that, he was the managing director of Ferrier Lullin Bank and Trust Ltd, private bank of UBS Group (formerly known as SBC or Swiss Bank Corporation), Nassau. Also a director of companies of Banque Privée Edmond de Rothschild Ltd for the group, Pinösch is a former director of the Association of International Banks and Trust Companies.