Lord Rothschild, OM
Audacious financier who also applied his brilliant creative brain to the arts and Britain’s heritage
THE 4TH BARON ROTHSCHILD, OM, who has died aged 87, broke away from his family bank to build his own financial empire; he also left a major mark on Britain’s national heritage through his passion for historic buildings and collections.
Jacob Rothschild’s friend Sir James Goldsmith once said of him: “It depends which day it is: on one, Jacob is an excellent banker. The next, he is absorbed by art and heritage. He has been torn between the two strands all his life.” It was said that Jacob inherited an artistic sensibility from his Bloomsbury mother, a first-class mind from his scientist father, and an appetite for risk from the genes of his Rothschild ancestors.
He also inherited two fortunes, one in the form of a stake in the family bank, NM Rothschild & Sons, which he sold in 1980 when he struck out on his own, and another from his cousin by marriage, Dorothy (“Dollie”) de Rothschild, the châtelaine of Waddesdon Manor. Augmented and sometimes dented by bold investment gambits, his wealth was estimated in 2023 at £825 million.
In his various appointments and projects in the heritage field, this background provided him with a unique combination of deal-making skills, the ability to back his connoisseurship with his own money, and the friendship of like-minded multimillionaires who were willing to support him.
His first public role was as chairman of the trustees of the National Gallery in 1985. He was appointed shortly after the then Prince of Wales’s attack on a proposed extension to the Gallery in an avant-garde style which the Prince famously described as a “monstrous carbuncle on the face of a much-loved and elegant friend”.
It fell to Rothschild to manage the aftermath of this intervention, which effectively torpedoed the scheme: it was replaced by a plainer, post-modern design by Robert Venturi, and Rothschild persuaded the Sainsbury family to meet the £30 million cost.
He also persuaded another friend and London neighbour, Sir Paul Getty, to give the Gallery £50 million, enormously boosting its ability to bid for important works of art – not least against the Getty Museum in California endowed by Sir Paul’s father. As a farewell gift to the Gallery when he stepped down as chairman in 1991, Rothschild himself paid for the restoration of the central hall, where a new inscription was added to the frieze: Jacobi Rothschild Munificenta Integrum Restituta (“Restored to its former state by the generosity of Jacob Rothschild”).
Meanwhile, he embarked on two other restoration projects. In 1985 his company bought a lease on Spencer House, the 18th-century palace of Earl Spencer overlooking Green Park. The building had been let as offices for some years, and was in a delapidated state. Rothschild struck a deal which enabled him to build a new office block at the rear of the house and spend the profit from it on the restoration of the house itself.
Attending the gala dinner at which the magnificent principal rooms were unveiled for the first time, the Princess of Wales – herself, of course, a Spencer – described the project as “the most exciting present” of her life.
In 1988 Jacob Rothschild inherited the bulk of the £92 million estate of Dollie de Rothschild, widow of James de Rothschild, a descendant of the French branch of the dynasty. Their home, Waddesdon Manor, was the last of the great 19th-century Rothschild houses, a full-blown French château in the Buckinghamshire countryside, designed as a showcase for the magnificent collection of art, tapestries and furniture – and the equally magnificent wine cellar – assembled by Baron Ferdinand de Rothschild.
The house itself had been given to the National Trust in 1957 and many of its priceless contents had remained hidden under dust sheets. Having inherited responsibilty for its upkeep, Jacob immediately set to restoring it to its fullest glory at his own expense, supervising every detail himself.
After leaving the National Gallery, Rothschild became chairman of the National Heritage Memorial Fund, a body which had been set up in 1980, with modest government funding, to try to prevent historic artefacts from falling into the wrong hands. One of his early successes was to rescue Lord Nelson’s letters, but the job took on larger dimensions from 1995 when the National Lottery came into being and the Fund became responsible for the distribution of proceeds of some
£150 million a year, to causes ranging from national monuments to ancient woodlands and local history museums.
This role inevitably invited controversy, particularly when one of the first grants was a payment of £12.5 million to the Churchill family to buy Sir Winston Churchill’s papers for the nation. Rothschild regarded the price as fair, on the basis that Churchill was “a pure icon of British history”.
Despite the classical refinement of his own tastes, Rothschild took a broad view of the uses of Lottery money; he also took a financier’s view, persuading the Government that the Lottery should not just build buildings but also provide endowments for their future upkeep.
His last major public project was the opening up in 2000 of Somerset House, the palatial quadrangle of buildings between the Strand and the Embankment which had for many years been occupied by the Inland Revenue and the Public Records Office. Under Rothschild’s leadership the inner courtyard was developed as a spectacular public space, with splendid fountains replacing what had previously been a civil service car park.
The Inland Revenue remained in situ, but a large part of Somerset House became a public art gallery. This housed the Gilbert Collection of gold and silver artefacts, and an outpost of the Hermitage in St Petersburg – where Rothschild had travelled to negotiate the deal as a guest on Sir Paul Getty’s yacht. Another wing became the home of the Courtauld Institute, for which Rothschild brokered a partnership with the Getty Museum.
As the culmination of his work both at Somerset House and at Waddesdon, Rothschild acquired an 80-piece silver service made for George III’S palace in Hanover. This was displayed with the Gilbert Collection for some months before moving to its permanent home at Waddesdon. “In my lifetime I wanted to make one major acquisition for Waddesdon,” he said. “The silver once belonged to the Rothschild family in France, so it is returning home.”
Nathaniel Charles Jacob Rothschild was born on April 29 1936, the only son of Victor, the 3rd Lord Rothschild, and his first wife Barbara Hutchinson, whose mother had been part of the Bloomsbury set as mistress to both Clive Bell and Duncan Grant.
Victor was a great-great-grandson of Nathan Mayer Rothschild, the young textile trader sent by his father Mayer Amschel Rothschild from Frankfurt to buy cloth in Manchester in 1798. Nathan, the third of Mayer Amschel’s five sons, subsequently established a counting house at New Court in St Swithin’s Lane in the City of London in 1810-11. While his eldest brother remained at Frankfurt, the other three established banking houses in Paris, Vienna and Naples.
The English Rothschilds financed Wellington’s armies and the building of the Suez Canal, and the extended family was acknowledged as the most powerful banking network in the 19th-century world. The peerage was created in 1885 for “Natty” Rothschild, a hugely influential figure in political as well as financial circles, who on his death in 1915 was described by the Chief Rabbi as “the foremost Jew of the world”.
Victor, Natty’s grandson, was a Cambridge zoologist and wartime MI5 counter-sabotage chief – and a notably unsympathetic father to the children of his first marriage. At the age of five, Jacob was summoned to a drawing-room full of visitors and asked by Victor whether he believed in God, and if not, why not. Some observers felt Victor sought revenge for the failure of his marriage to Barbara by bullying the young Jacob, a diffident child who suffered a bout of polio.
Jacob was educated at Eton and did National Service as a lieutenant in the Life Guards – despite a letter from Victor to the colonel saying that he could not imagine Jacob ever shaping up as an officer. He then went up to Christ Church, Oxford, where he took a First in history under the tutelage of Hugh Trevor-roper (Lord Dacre).
Before joining NM Rothschild as a junior partner in 1963, he spent periods of time with the accountants Cooper Brothers, with the Wall Street firm of Morgan Stanley, and with a private investment partnership. Again, Victor was disparaging: “Jacob thinks a lot about money, perhaps too much.” He later turned this into an uncomfortable joke: “Jacob is so brilliant at finance and I so much the reverse that some people think it casts doubt on his legitimacy.”
Despite these discouragements, and the deeper insecurities conferred on him by a difficult upbringing, Jacob rapidly made his mark on the business. His first success was to win the mandate to finance the Transalpine pipeline under the noses of Morgan Stanley, which regarded the business as its own.
Although Jacob’s second cousin Evelyn de Rothschild – who inherited a majority shareholding in the bank, and joined the partnership in 1957 – was the pre-ordained leader of the firm’s younger generation, many of the new developments in NM Rothschild’s business in the 1960s and 1970s were Jacob’s.
He outpaced his cousin both as a creative thinker and as a risk-taker, declaring in 1965 that “we must try to make ourselves as much a bank of brains as of money.”
Together with the former barrister Philip Shelbourne, Jacob built up the bank’s reputation in corporate takeover work. He established it as a player in the burgeoning eurobond and eurodollar syndicated-loan markets, encouraged its participation in international joint ventures, set up a new Rothschild arm in Zurich, and took charge of Rothschild Investment Trust (RIT).
The latter had been founded shortly before his arrival but flourished under his leadership, investing in everything from oil and gas to hotels and auctioneers. Not all of Jacob’s investment gambits paid off, but by the late 1970s RIT had net assets of £100 million, and had become a distinct business from NM Rothschild, which owned less than 10 per cent of it. Its success was one of several factors which influenced Jacob’s view of the future of the bank.
In the mid-1970s he became convinced that the traditional model of merchant banking was outdated, and that a broader, more exciting business could be created by a merger with the rival firm of SG Warburg. The plan, codenamed “War and Peace”, was strongly opposed both by Evelyn and by Victor, who became chairman in 1975. An alternative plan to merge the bank and RIT was also shot down, on the basis that it would dilute family control.
Jacob was by this stage a rival to Evelyn for the chairmanship of the bank, but Evelyn’s shareholding counted strongly. Victor was disinclined to support his own son, and other directors regarded the older cousin as the safer pair of hands of the two.
After Evelyn succeeded to the chair in 1976, relations between the two became increasingly strained, provoking the departure of some of Rothschilds’ brightest executives. “The court just isn’t big enough for Evelyn and Jacob,” said one insider, “not the way they play tennis.”
By 1980, following a series of internal ructions in which NM Rothschild formally stood down as financial adviser to RIT, Jacob had had enough. He sold his 11 per cent stake in the bank for £6.6 million, and resigned as a director. It was agreed that he should take with him the management of RIT. His new business was to be distinguished from the bank by his initial, as J Rothschild Holdings.
Expectations that NM Rothschild would wither away without Jacob’s creative drive were confounded as the bank went on to become a leader of Margaret Thatcher’s privatisation programme. Jacob, meanwhile, rapidly built up a diversified group which overtook NM Rothschild in scale, but did not endure.
He merged RIT with Great Northern Investment to form RIT & Northern, and acquired stakes in, among others, the unrelated Wall Street firm of LF Rothschild Unterberg Towbin, the City stockbrokers Kitkat & Aitken, and the breakfast television venture Tv-am.
Finally, he merged with the Charterhouse merchant banking group to form Charterhouse J Rothschild, with a market capitalisation of some £400 million. This was intended to be the foundation of an American-style financial conglomerate, but its meteoric progress was halted in 1984 by the failure of an attempt to merge with the insurance company Hambro Life.
Over the next three years the arrangements with Charterhouse, Kitkat and LF Rothschild were all unwound – though at a significant profit.
As an investor prepared to take large strategic stakes, Jacob Rothschild was a force to be reckoned with throughout the 1980s takeover boom. He played a part in the controversial Guinness takeover of Distillers, for example, and helped reshape the British textile industry through a series of manoeuvres involving Carrington Viyella and Tootal.
But his biggest gambit, a £13 billion bid in 1989 for British American Tobacco in partnership with Sir James Goldsmith and Kerry Packer, ended in failure.
By 1990, when he succeeded to the peerage (and a baronetcy dating from 1847) on Victor’s death, Jacob’s business interests had been scaled back. He continued to preside over a successful private investment group under the names of RIT Capital Partners, from which he retired as chairman in 2019, and Five Arrows (a reference to the five sons of Mayer Amschel Rothschild) and to make occasional forays into the markets. But more and more of his energy was devoted to cultural pursuits.
Through his mother’s third marriage, to a Greek artist, for example, he had many connections in Greece; he kept a house in Corfu, where he was able to pursue his interest in collecting Byronic memorabilia, and his support for archaeological work in the ancient city of Butrint in Albania. He was also for a time the owner of Colnaghi, the Bond Street art dealer. And the radically contemporary Flint House he commissioned by the architects Skene Catling de la Peña on the Waddesdon Estate won the RIBA’S 2016 House of the Year Award.
Lord Rothschild was a leader of the Anglo-jewish community. He was president of the Institute of Jewish Affairs and a member of the Reform synagogue at Marble Arch. He was deeply committed to Israel, and in 1992 he led a delegation of 20 family members to the opening of the new Supreme Court building in Tel Aviv, a gift from the Rothschild’s Yad Hanadiv foundation.
He was appointed GBE in 1998, joined the Order of Merit in 2002 and was made CVO for services to the Duchy of Cornwall in 2020.
He married, in 1961, Serena Dunn, granddaughter of a Canadian baronet on her father’s side and of the 5th Earl of Rosslyn on her mother’s, and sister of the writer Nell Dunn. She died in 2019. Lord Rothschild is survived by three daughters and his son, Nathaniel (Nat), who was born in 1971 and succeeds as 5th Baron and 6th baronet.