Prince Rupert zu Loewenstein: Banker whose invention of the business model for modern rock made rich men of the Rolling Stones

 

Prince Rupert zu Loewenstein described the various roles he performed for the Rolling Stones between 1970 and 2007 as "a combination of bank manager, psychiatrist and nanny, a little bit of agent, business manager, accountant." He was correct in emphasising the financial aspect of what he did for the group, who were nearly broke when Mick Jagger asked for help to extricate them from the clutches of the infamous New Jerseyite Allen Klein in 1968.

With Loewenstein as adviser, the Stones invented a business model designed to maximise income from touring, recording and music publishing, and minimise their exposure to UK tax by living abroad and domiciling their companies in more advantageous territories such as the Netherlands. This business model became the template for many of the biggest acts in the world, including Cat Stevens and Pink Floyd, both Loewenstein clients in the 1970s.

Born at Palma, Majorca, in 1933, he could trace his Bavarian ancestors back to the 15th century. A pupil at Beaumont College, the Catholic public school in Windsor, he read Medieval History at Magdalen College, Oxford, where he formed lifelong friendships with Jonathan Guinness, now Lord Moyne, and Richard Cox-Johnson. In 1962, after training with stockbrokers Bache & Co, he joined forces with Guinness and Cox-Johnson to acquire the merchant bank Leopold Joseph for £600,000. "We decided that young people plus a small traditional City bank was a combination that made sense," Loewenstein recalled. "In those days, many wealthy families had their own financial organisations to manage their money."

They refocused the Leopold Joseph business away from its old-fashioned clientele towards corporate finance and new money. "It's much more interesting than old money," he said. "People with old money are nearly always having to be adjusted downwards; those with new money are much more realistic."

Loewenstein first met Jagger in 1968, at a party held at the Chelsea home of the banker Peter Denman. "We walked into the room and found everybody stoned," he recalled in his 2013 memoir A Prince Amongst Stones. "One of the people whom I tripped over was Mick."

Loewenstein was not a rock fan but took their second meeting, arranged by the art dealer Christopher Gibbs at Jagger's Chelsea Embankment house, more seriously. "At the end of our conversation, it was clear to me that Mick and I had clicked on a personal level," he wrote. "Essentially, the band were handcuffed on the one side by their contract with Allen Klein, and on the other to Decca Records. My job was going to be to allow them to escape, Houdini-like, from both. I also realised that if a way could be found to get past the dodgy business practices that surrounded touring, there was a lot of money to be made."

Looking at British stars who had moved abroad like Noel Coward and Richard Burton, he suggested the Stones "would have to abandon their UK residence. If they did not do this, they could be paying between 83 and 98 per cent of their profits in British income tax and surtax. I selected the South of France as a suitable location" Richards might have talked up the romance of a group driven out by the establishment and recording Exile On Main St on the French Riviera, but as Loewenstein wrote, it was "the only rock album to contain a reference to tax planning in the title." Save for the occasional studio track and live concert, the Stones would not record in the UK again, and rehearsed in Canada before US jaunts. Their tax exile status has been much imitated.

Securing freedom from Decca and the litigious Klein proved costly. Litigation continued for another 18 years after a first agreement in 1972 gave the Stones $1m and Klein's ABKCO the copyrights to the band's '60s recordings, another album, and two tracks from 1971's Sticky Fingers recorded under his watch.

A former LSE student, Jagger found a savvy ally in Loewenstein who orchestrated an undercover auction, helped the Stones start their own label and sign a distribution deal with Atlantic in 1971. The agreement enabled the band to retain the rights to subsequent albums and negotiate new contracts with EMI, Columbia, Virgin and Universal over the next three decades. Given the fact that the Stones have never released a blockbuster album but have been steady catalogue and compilation sellers, this proved a shrewd move from Loewenstein – "very pukka, trustworthy, the mastermind of our set-up," as Richards described him in his memoir Life. He was also behind their decision to license the Jagger-Richards composition "Start Me Up'' to Microsoft for their Windows 95 campaign for a reported $4m. Along with guitarist Ronnie Wood, he also succeeded in putting an end to "World War III" and reconciled Richards and Jagger after the singer's attempt at a solo career.

In 1989, the Canadian impresario Michael Cohl guaranteed Loewenstein and the band $40m for 40 shows. This paved the way for the Steel Wheels tour and the Urban Jungle dates the following year to become the most financially successful tour in rock history, grossing over $260m. Subsequent tours proved even more lucrative, culminating with A Bigger Bang grossing close to $560m by its close in 2007.

The previous year, Loewenstein had suffered a major haemorrhage and decided to bow out. "I could not see the Rolling Stones being able to manage more than one or two more tours of the magnitude of their previous global circumnavigations," he said.

He was never tempted by the rock'n'roll lifestyle, a valuable asset within the Stones inner sanctum. He handled the financial fall-out from Jagger's divorce from his first wife Bianca in 1978 and his separation from his long-time partner Jerry Hall in 1999 and remained on friendly terms with the singer until A Prince Amongst Stones. This prompted Jagger to say, "Call me old fashioned, but I don't think your ex-bank manager should be discussing your financial dealings and personal information in public."

His daughter Dora collaborated with Jools Holland on the 1998 coffee table book The Rolling Stones: A Life On The Road. Both his sons became priests.

PIERRE PERRONE

Rupert Louis Ferdinand Frederick Constantine Lofredo Leopold Herbert Maximilian Hubert John Henry zu Loewenstein-Wertheim-Freudenberg, banker and business manager: born Palma, Majorca 24 August 1933; married 1957 Josephine Lowry-Corry (two sons, one daughter); died Richmond 20 May 2014.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Account Manager

£20000 - £35000 per annum: Recruitment Genius: This full service social media ...

Recruitment Genius: Data Analyst - Online Marketing

£24000 - £35000 per annum: Recruitment Genius: We are 'Changemakers in retail'...

Austen Lloyd: Senior Residential Conveyancer

Very Competitive: Austen Lloyd: Senior Conveyancer - South West We are see...

Austen Lloyd: Residential / Commercial Property Solicitor

Excellent Salary: Austen Lloyd: DORSET MARKET TOWN - SENIOR PROPERTY SOLICITOR...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there