Rothschild & Co has just announced the creation of a dedicated team of around fifty bankers specializing in tech. Alexandre de Rothschild, the company’s executive vice-president, details his ambitions in his first interview.
Rothschild & Co wants to step up in tech. The house of David de Rothschild has just announced the creation of a dedicated team of around fifty specialized bankers, which will be led by Chris Gaertner and Walid Khiari, based in Palo Alto, by Pierre-Henri Chappaz and Virginie Lazès in Paris. , and by Warner Mandel and Albrecht Stewen in London. Alexandre de Rothschild, Executive Vice President of Rothschild & Co, explains this initiative in his first interview.
You open a new page by launching, in Palo Alto, an international team exclusively dedicated to tech. What is your ambition?
We have been advising international tech entrepreneurs for a long time. We have led six operations for Alibaba, we have advised Intel on its acquisition of the Israeli company Mobileye, we have supported KissKissBankBank in its sale to La Banque Postale… The large groups in the traditional economy to which our house is historically very close are by elsewhere in an accelerated search for digital acquisition opportunities. For several years, we have been firmly established in the French tech ecosystem, but also in China, Israel and the United Kingdom. This led us, in 2017 alone, to support around fifty tech transactions. Today, we have therefore decided to crystallize these strengths through a team dedicated to technology, able to reach out, from Silicon Valley, internationally with all of our hubs. This transversal team of 50 bankers gives us greater impetus to conclude cross-border deals, and even between different continents, in the tech sector.
Your competitors, like Goldman Sachs, haven’t been waiting for you. How will you be more competitive?
Unlike other names in investment banking, we will take care not to intervene in silos. All sectors of the economy have a digital dimension. We will therefore mobilize all of the bank’s offers, from IPO advice, mergers and acquisitions to fundraising. To be present as early as possible with entrepreneurs, we will also further strengthen the team formed by Chris Gaertner with a banker specifically dedicated to raising capital from an Anglo-Saxon financial institution from private investors. Let’s not forget that we are only at the beginning of this new digital era. The boards of directors are still in the midst of questioning. They have all these digitization and cybersecurity topics at the top of their priorities … With our existing track record, we are well placed to assess these issues and advise them in their choices.
Prices in tech are already at their highest. Aren’t you worried that the bubble is about to burst?
It would be better to look at each case specifically. Indeed, we see that some private placements before IPO ultimately end in value losses – what we call in our jargon “burn rounds”. But we should not generalize. Many start-ups are launching solutions that are sufficiently disruptive to justify high valuation levels. The whole ecosystem is also driven by the fantastic results of Gafa. We cannot therefore speak of a global bubble.
Do you think that we will see the big tech groups, in particular the Gafa, setting their sights on traditional companies, like Amazon which bought Wholefoods?
Acquisitions will take place in both directions. The Gafa and other unicorns will take advantage of their high valuation to acquire established companies in order to consolidate market shares, business assets or distribution methods. The companies of the old economy, for their part, will take an interest in start-ups to accelerate their digital transformation and make a success of the profound changes in their “business model”. Rothschild, at the confluence of these two worlds, will be ideally placed to help each other achieve this external growth.
Are you also going to launch the Rothschild house in tech investing?
Venture capital, and seed money in particular, has a whole different approach to venture capital investing or LBOs. The group’s long-term investment philosophy, keen to respect a balanced risk-return ratio, is not that of start-ups. Very great successes imply, in this segment of investment, many mortalities. But in the future, we do not refrain from supporting a particular “business angel” initiative in investing.
You are called upon to take over from your father, what is your role in structuring this tech pole?
The evolution of this tech pole will allow us to accelerate this dynamic in tech. It is also a way of rethinking our “business model”, the way in which we operate in our three businesses of advice, asset management / private banking and private equity. We are fortunate to have a house that is two hundred years old, with all the advantages that this entails, and we want to amplify our resonance in the world of tech. We show in any case that we are ready with the initiatives that I have just mentioned! It is my role to support and carry this movement.