Leadership

2023 was a significant year in our history as we completed our transition to becoming a privately owned company. This was a complex project achieved in a very tight timeline and we are delighted that our investors share our dynamic and entrepreneurial approach and will support us as long-term partners in our development.

In terms of our financial performance, after two exceptional years in 2021 and 2022, 2023 was a more challenging year given the macroeconomic and geopolitical environment. Our revenue for the 12-month period was lower at €2,535 million, but thanks to our ability to weather the headwinds and seize opportunities across our three businesses, 2023 was still our third best year ever, illustrating the resilience of our business model. In parallel, we continued to invest heavily across our businesses, so the overall profitability of the firm declined from the record highs of the two previous years with net income group share reaching €292 million, excluding exceptional items.

Global Advisory’s revenue was down 24% to €1,404 million, reflecting lower levels of completion activity in the global M&A market where completed deals were down 32% by value1. We ranked sixth globally by financial advisory revenue2, first globally by number of completed M&A transactions3, and first in Europe by number of completed restructurings4. In total, Global Advisory completed 594 transactions, totalling $425 billion. During 2023, we completed both the acquisition of 100% of Redburn, and its merger with Atlantic Equities, to create Redburn Atlantic, and formalised a new offering, Geopolitical Advisory.

2023 was a strong year for Wealth and Asset Management, with Assets under Management (AuM) of €108 billion, up 15% from last year and exceeding €100 billion for the first time. This was driven by strong investment performance in favourable markets and positive growth in all locations, with net new assets totalling €4.9 billion. Revenues were up 20% versus last year to €816 million, driven by growth in AuM and by strong performance from our banking and treasury activities due to increased interest rates. We continue to invest in the growth of the business, with full-time employees up from 1,605 to 1,733 in 2023. During the year, we opened a new office in Hamburg and we are looking forward to establishing a new team in Dubai in 2024.

Five Arrows’ AuM increased by 12% to €25.7 billion at the end of 2023 when compared with December 2022. This increase was primarily driven by a successful fundraising performance, with €4.8 billion of new capital secured in the year across all strategies. AuM have more than doubled over the last five years. The Five Arrows revenue for 2023 was €282 million, down 31% year-on-year after two exceptional years in 2021 and 2022. Average four-year revenue grew from €287 million to €308 million, an increase of 7%. Recurring revenues have grown to record levels from €156 million to €193 million, an increase of circa 23% versus 2022, in line with fee-earning AuM. Cashflow generation was strong, with €199 million of net proceeds distributed to the Rothschild & Co group in 2023 versus €120 million in 2022.

The group’s long-term ambition to use its influence and expertise to support the sustainability transition of the global economy remains a key pillar of its strategy and is a fundamental part of our approach to business. In 2023, our investment businesses contributed to the group’s long-term sustainability ambition by further developing and implementing their Responsible Investment strategy with a focus on climate action and inclusive growth. Our Global Advisory business continued to take a leading advisory role on transactions relating to innovative energy and climate transition technology and energy management5. Finally, our group-wide commitments to ensure a diverse and inclusive people culture and a balanced working environment, as well as to reduce operational greenhouse gas emissions on a trajectory aligned with the goals of the Paris Agreement, remain key.

We enter 2024 aware that economic risks remain elevated, and with a more precarious geopolitical backdrop. Notwithstanding this, should market conditions improve, we see the potential for growth opportunities. Our strong business model, client focus and long-term approach make us confident for the future.