In one of the most remarkable U-turns the financial world has seen for many years, the highly secretive Rothschild Group is, in effect, pulling out of retail fund management and concentrating instead on the higher-margin areas of private banking and wealth management.
The group set up Rothschild Asset Management only three years ago and, less than a year ago, it launched the first nationwide advertising campaign in its 200-year history to publicise RAM's Five Arrows brand, complete with a lavish party at the exclusive Axis restaurant in London followed by a dinner at the Hilton hotel in Park Lane. "That's life," said a source close to RAM. "It's been a lot of fun, but the fact is that the asset management business has fallen away since last year and shows no sign of recovering."
RAM currently manages around £13bn of retail and institutional funds, principally in London, but also operates from a number of other offices in Guernsey, the Isle of Man, Singapore and Japan.
An official statement said yesterday: "We are examining various options for the future of the retail and institutional asset management businesses of RAM that may include an alliance with a larger investment management group. RAM has a highly regarded fixed income and currency business which is complemented by a growing reputation in global equities. In addition, RAM has built a leading position in the growing retail multi-manager market."
Rothschild ' s institutional & retail asset management businesses in France and the US are unaffected by these arrangements.
The family-owned banking group put a positive spin on the RAM decision by simultaneously unveiling the appointment of Mike Bussey, formerly joint chief executive of Schroders Private Banking, to be chief executive of Rothschild's Private Banking and Wealth Management with a brief to create a worldwide integrated private banking operation. He will begin on 1 November.
Rothschild's existing London-based private client business will be combined with its private banking and trust operations in the UK, Switzerland, Guernsey, Bermuda, and nine other key locations, to create a single worldwide private banking business.