François Pérol (Rothschild): “The challenge is to keep society together. May growth reach everyone ”| Business

American billionaire Andrew Carnegie taught that “there is no greater failure in life than dying rich.” Do you share it? Smile. François Pérol (Le Creusot, France, 1963), head of the consulting firm that bears the surname Rothschild, knows that it is not a joke. “I understand the question. I am not a Rothschild. I just run the company. I do not belong to the family. But to be a member of it, you have to work and you have to give. If you do not participate in the world, you do not create companies, you do not work and you do not give back to the community what you have received: then you are not part of them ”, he says.

It has been two years since he came to Madrid and he was surprised to see a more animated T-4. “It is a sign of activity,” he says. He orders a tea, which he won’t even touch during the 45-minute interview. It has a lot to tell. Even from his friend, Nicolas Sarkozy. There is time for that. Now he explains that the company is entering the competitive wealth management business in Spain. His new Wealth Management office takes off in Madrid. Independent advice, family wealth management, entrepreneurs, charities. There is no entry ticket. They want to conquer a space that they have known for decades. They have brought professionals, especially Spaniards, from Geneva to the new offices.

Question. Why Spain? Because right now? Are there more millionaires after the covid crisis?

Answer. It was the only country in Europe where we did not have a high net worth management structure. We are in the UK, Switzerland, Italy, France. Spain was missing. It is a land that we know very well, because we created our consulting business 30 years ago. We also have many Spanish clients in Switzerland to whom we handle their money. It was more logical to enter Madrid. Our strategy is to grow organically.

P. But do you know that it is a space full of competitors?

R. Tell me a market where there are none. Spain is no different.

P. Now society requires companies to have a purpose that they contribute to the collective. What does Rothschild offer?

R. This is a family business and what we are going to give the client is global advice. To investors, in mergers and acquisitions operations, in investment decisions. What we try to do is make our entire business sustainable. This means entering criteria [ESG, medio ambiente, sociales y de gobernanza, en su traducción española] in our investment policy, although the metrics are still not clear about what is and is not sustainable. But we scrap coal projects. An example. We are working on a family of carbon neutral impact funds. We are small. We cannot change the world. However, we have a responsibility to introduce and take into account changes in the way we do business.

P. Is the gap between those who have money to invest in the stock market, and benefit from huge profits, and those who do not?

R. Yes. And it is a concern for everyone. Several challenges arise. How to create a sustainable environmental transition? Because climate change is already happening. It is very complicated, much more than we had initially thought. There are the gas prices. It is part of the equation. How do we manage it? The other challenge is the ability to hold society together, for everyone to benefit from economic growth. Something that is not happening. But I really believe that we can conduct business sustainably.

P. Let’s go back to the numbers. What forecasts do you have for this year and the next?

R. It’s very complicated. I don’t have a crystal ball.

P. But will it be pessimistic or the opposite?

R. It is a variable moment. Markets may be nervous about rising interest rates, inflation – but I’d say the economy is recovering.

P. Despite geostrategic changes? In the last decade there have been countless transactions destined for China, with the change of course of its president, Xi Jinping, will there be less investment?

R. We don’t see a great time for international operations (cross-border, in financial jargon) with China. A decade ago yes. But now there is mistrust. Between the United States, Europe and the Asian country. This will have consequences, especially in strategic industries.

P. Is the Asian giant closing in?

R. There is a concern about the relationship between the United States and China. It is going to redefine the next 20 or 30 years of the world. It is something very important that will undoubtedly come. America is concerned that China will become the world’s leading economic and political power.

P. That change may be true; others, like activist investors, are already here. They remove and put CEOs. We saw them with Danone.

R. It was a trend in the United States and has reached Europe. We are advising quite a number of clients when activist funds enter equity. Shareholders ask questions and want answers.

P. For many years they have been very active in mergers and acquisitions, and with the pandemic, the restructuring sector contributed a lot to the bottom line.

R. Our business is global. There are favorable winds. Low financing and interest rates. This is combined with structural trends: the health crisis has led many companies to think that they have to accelerate their transformation, be it digital or towards zero carbon emissions. All companies have an interest in these areas. But we also know from experience that this industry is cyclical. However, our brand is very strong.

P. You have worked for three years in the French Ministry of the Economy, with former French President Nicolas Sarkozy, sentenced to one year in prison for illegally financing his campaign in 2012. How do you feel?

R. I have an excellent professional relationship with him and he is someone I personally appreciate. I am very proud of what I did when we were dealing with the crisis of 2008. I feel a little sad when I see what is happening. I have the feeling that he is concentrating too much, too much attention. That’s all I have to say.