- You can't get much hotter than Jacob
Rothschild. Over the past few weeks this doyen of finance and
the arts has flown as close to the sun as one can get by
stepping into two of the world's most controversial corporate
and geo-political hot spots.
- He is the new deputy chairman of BskyB where
Rupert Murdoch's son, James, has just been elected chief
executive, and he was rumoured to be the trustee of shares in
Yukos owned by the jailed Russian oligarch Mikhail Khodorkovsky
- reputedly Russia,s richest man. What is so extraordinary is
that Lord Rothschild, a rather quiet, highly cultured grandee
who has always shunned the public spotlight in his business
affairs, should choose now to tread the boards.
- Since 1980, when he so famously left the
family bank, NM Rothschild, following a row over strategy with
his cousin, Sir Evelyn Rothschild, he has pursued a relatively
quiet career steering clear of the oxygen of publicity by
keeping his interests unquoted. Until BSkyB, Rothschild has sat
on the board of only one listed company.
- Instead, he spent the past two decades
building a series of highly successful companies in insurance,
banking and investment including Five Arrows, St James,s Place
Capital, which he ran with Sir Mark Weinberg, and J Rothschild
Assurance. Today, he runs RIT Capital Partners, an investment
management company with a portfolio of £700m ($1bn). His
personal fortune is reputed to be £400m.
- The great exception to his pursuit of the
quiet life came in early 1989, when, with Sir James Goldsmith
and Kerry Packer, he created Hoylake to bid for BAT, the tobacco
group. He enjoys having invented the notorious 'unbundlin'
expression, which was to be used by many an entrepreneur as they
went about breaking up monoliths.
- So Rothschild,s decision to join the BSkyB
board is all the more astonishing. Even people working with him
in his office at RIT have been asking why he is doing it.
- Close friends are equally mystified. Perhaps
he likes to surprise, to do the unpredictable, just as he has
done through his friendship with the jailed Khodorkovsky, whose
political ambitions are said to have troubled President Putin
and led to his arrest.
- There are a few clues. He knows Rupert
Murdoch well, having been friends since the Australian newspaper
proprietor first came to the UK in the 1960s. The job is clearly
a challenge the 67-year-old finds irresistible, one made all the
more fascinating simply because of all the fuss kicked up by
investors furious at what they considered Murdoch,s blatant
nepotism in pushing through his son,s appointment.
- But as one friend said, Rothschild is likely
to have considerable sympathy for the view that Murdoch is
probably more ruthless and 'self-selecting' in his choice of
heir than anyone else, having already knocked his older
children, Elisabeth and Lachlan, out of the race. "Jacob is a
very loyal man. Maybe he likes the idea that he can play elder
statesman to the younger Murdoch while helping the father too.
He will also be powerful in helping bring new fresh blood on to
the board which needs reform. He,s not frightened of being a
rebel," he said.
- One of Rothschild's supporters was Allan
Leighton, a BSkyB non-executive director since 1999 and the new
chairman of its audit committee. He had suggested Rothschild to
the headhunters Spencer Stuart as someone who was "confident,
independently wealthy, and could add enormously to the board".
- Meanwhile, Rothschild's links with Russia's
Khodorkovsky, until recently head of the Yukos oil company, go
back three to four years and stem from their shared love of the
arts and philanthropy. Rothschild met Khodorkovsky through their
patronage of the Hermitage Rooms at London's Somerset House but
the two struck up friendship when the Russian businessman
invited Rothschild to become a trustee of the Open Russia
Foundation that he opened in London to promote educational and
cultural ties between Russia and the West.
- But the true extent of their relationship
became muddied last week after reports that Khodorkovsky, who
was jailed last week for fraud and tax evasion, had transferred
his share stake in the event of arrest to Rothschild, who would
act as a trustee. However, Menatap, the Gibraltar-based holding
parent company of Yukos, has consistently denied that Rothschild
had any rights or links to the shares or that he was a
- Menatep's Yury Kotler has said Rothschild
had no involvement but that the shares were held in trust by
Leonid Nevzlin, himself a big Yukos investor, now in exile in
Israel. Rumours have been swirling in Russia for months that
Rothschild might even become chairman of Yukos, but these have
all been dismissed.
- Rothschild's London office maintains a
Soviet-style silence on the issue, refusing to make any comments
on the share stake, other than to report that "Khodorkovsky is a
progressive businessman who is devoted to Russia".
- Nathaniel Charles Jacob Rothschild is the
head of the UK Rothschild family, having inherited the fourth
baronetcy from his father, Victor, an eminent zoologist, who
married a Strachey, one of the Bloomsbury set. His father was a
sometime MI5 agent, interested too in politics, having chaired
Prime Minister Edward Heath,s Central Policy Review Staff in
1971, often known just as the Think Tank.
- Rothschild was brought up in a conventional
upper-class British way: Eton, and Christ Church, Oxford, where
he gained a first in history. He worked for years at the family
bank, running the corporate finance department, and was chairman
of the executive committee before quitting suddenly in 1980
after the row with his cousin. The job of running the family
bank had already passed to Sir Evelyn because Lord Rothschild's
father had chosen science rather than banking as his career.
- Like that slightly older generation of
Jewish aesthetes, such as Sir Isaiah Berlin, whom he knew well,
Lord Rothschild is extremely proud of his heritage and has
worked passionately to strengthen ties with Israel.
- He is chairman of Yad Hanadiv, the
Rothschild foundation, which built and gave the Knesset
government buildings and the Supreme Court to Israel, and chairs
the Jewish Policy Research, dedicated to promoting issues
affecting Jews worldwide.
- At the same time he is equally energetic in
the UK's art world and is a dynamic patron of a multitude of
cultural projects. He caused a stir by spending some £10m on
refurbishing Spencer House, the former home of the late Princess
of Wales, family, in which he lives. As chairman of the National
Gallery from 1985 to 1991, he oversaw the building of the
Sainsbury wing and has just finished six years as chairman of
the National Heritage Memorial Fund, during which he helped
donate £1.25bn of National Lottery money for heritage works in
the UK. On a more quixotic note, he has worked with Lord
Sainsbury for the conservation of archeological sites in
Butrint, Albania. He also looks after Waddesdon Manor, given to
the National Trust by a cousin, Mrs James Rothschild, and is a
director of the State Hermitage Museum in St Petersburg.
- There aren't too many families like the
Rothschilds that demonstrate so well the ability to pass on good
genes. After all, they have been the power behind the throne of
many a government since the family first arrived in Britain in
the 1700s, emigrating from the Frankfurt ghettos.
- Their first fortune was made out of the
Napoleonic War, when they supplied the Duke of Wellington's
soldiers fighting in the Peninsular War with gold for their
wages. By the middle of the 19th century, they were spreading
their wealth around Britain and France, investing in great
properties and vineyards, while helping fund Disraeli's UK
government to build the Suez Canal.
- Rothschild's children have not joined the
family firm. His son, Nat, works for Atticus Capital in New York
while his three daughters have an eclectic mix of work and
leisure out of the public eye. No wonder Murdoch wants a little
advice from his old friend on how to really maintain an empire.