R-R Alliance Aims at Chinese Rich Men
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The stock transfer involving about 100 million pounds united the two best known financial families together. The alliance was formed on May 30 (EST), RIT Capital Partners (RIT) under the famous Rothschild family from Europe acquired 37% shares of Rockefeller Financial Services with 100 million pounds. The latter is a subsidiary company under the famous Rockefeller family from the United States.
This acquisition turned the two families’ relation from private contact into commercial alliance. Due to the great amount of assets managed by the two families, the global wealth management situation might be influenced.
Presently, Rockefeller Financial Services is managing about 34 billion U.S. dollars of client assets while the net assets of RIT amounted to 1.9 billion pounds.
Reuben Jeffery III, CEO of Rockefeller Financial Services, explained the cause and effect of this alliance.
As he said, when depression is harassing the global economy, the two families still have great progress in the financial service section. “Now we are negotiating to find possible cooperative opportunities. It is quite possible that the union of the two families will intensify our investment in markets other than the United States. China is also a potential market.”
According to him, though Rockefeller has already invested in many sections in China, they may focus on the wealth management of chinese rich families through the cooperation with the Rothschild family in the future.
50-year private relation results in the alliance
“The alliance was formed due to many factors,” said Jeffery. He is the witness and promoter of the formation of this alliance.
Two years ago, Jeffery got to know Jacob Rothschild with the introduction of David de Rockefeller. One year later, Jeffery proposed to Jacob Rothschild about acquiring the shares of Societe Generale held by Rockefeller.
“Many investors are interested in those shares. But I encouraged Rothschild to buy them because the two families have long and stable private friendship and we hope to build a logistical strategic partnership,” Jeffery said. That consideration reflects the conservativeness of the wealth families.
Jeffery said that David Rockefeller, who is 96 years now, met Jacob Rothschild, 76 now, in the 1960s when the former was working in New York.
“Time helped to build a bridge of trust be- tween the two families,” he said.
Actually, the acquisition is a part of the incremental adjustment strategy for the Rothschild family.
Prior to that, the Rothschild family plans to combine their assets in France and UK to avoid hostile acquisition. The family hopes for a larger reform to improve the efficiency of their global business. Now the acquisition of the assets of the Rockefeller family, the Rothschild family can get into the new assets management market more artfully, which is good for the integration of its global business.
“Rothschild is now committing itself to the development and expansion in the sections of financial services and assets management. This is the core business of Rockefeller, which is devoted to the growing client basis and expansion of the market other than the United States,” said Jeffery.“Coincidentally, France-based Societe Generale is planning to end the investment into us. Therefore it is quite normal for us to reach the cooperation with the Rothschild family.”
Chinese rich men are the targets
According to Jeffery, the cooperation will have influence upon the Chinese family because the two families are going to extend their arms into China.
“In the short term, we focus on providing the financial services of wealth maintenance and creation for Chinese wealthy families to benefit them for generations. Simultaneously, we hope to provide investors in China – both private and institutional investors – with the investment opportunities in the international capital market,” he said.
Previously, Rockefeller’s investment projects were quite scattered in China.
Rockefeller Group entered China in June 2010. Its family member Rose Rock Fund worked with Beijing New Hongji Sheng Cheng Real Estate Co., Ltd and Orient Group to develop the Qinglong Lake International Culture Club in Beijing. The investment totaled 50 billion yuan. After that, this Fund began to invest in the new energy, IT, telecommunication and biopharmacy in China
The Rothschild family founded PE funds in China. The Rockefeller family immediately followed suit by founding the Rose Rock (Tianjin) Equity Investment Fund Management Co., Ltd, which invested into different industries in the form of e fund equity management. The Fund initially raised the capital of 5 billion yuan and its total fundraising amounted to 2 billion U.S. dollars. With this Fund, the Rockefeller family invested into another commercial real estate project in Tianjin.
According to Jeffery, the next move of Rockefeller and Rothschild is probably to focus on services for rich men in China through founding new funds or acquiring other wealth management companies.
Jimmy Chang, executive director and senior investment portfolio manager of Rockefeller Financial Services, said: “Many families in China have accumulated their wealth to a certain extent. The first generation of business starters earned and accumulated their wealth and they are looking of methods to maintain and increase the value of their assets which could work for generations. I think this is a section that will be under heavy scrutiny in China in the future.”
Though the European and American financial service market is shaking in the wind, the business of the two families seems to be immune to the influence. From the financial crisis in 2008, the Rothschild family became the financial consultant for Ireland, the Netherlands, UK and a dozen of countries. The Rockefeller family also had no loss during the crisis.
“The cooperation was driven by another big impetus – the cooperation enables us to build a more stable client network and market when the global economy ceaselessly faces uncertain factors,” Jeffery said. “We will bring more investors into China, Japan, South Asia, and Latin America through the investment channels of the two families.”
That’s why RIT spent about 100 million pounds acquiring 37% shares of Rockefeller Financial Services from Societe Generale and became an important minority shareholder of the former.
In addition, the two parties reached the strategic partnership contract, according to which they will send non-executive director to each other’s board of directors.
“We are excited by the fact that Lord Jacob Rothschild and RIT could invest in Rockefeller,”Jeffery said. “The cooperation will combine the professional experiences of the two century-old families in assets management together.”