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
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
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: Bookkeeper / Office Co-ordinator

£9 per hour: Recruitment Genius: This role is based within a small family run ...

Recruitment Genius: Designer - Print & Digital

£28000 - £32000 per annum: Recruitment Genius: This Design and marketing agenc...

Recruitment Genius: Quantity Surveyor

£46000 per annum: Recruitment Genius: This property investment firm are lookin...

Recruitment Genius: Telesales / Telemarketing Executive - OTE £30k / £35k plus

£18000 - £35000 per annum: Recruitment Genius: This company specialises provid...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003