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French presidential election

Emmanuel Macrons Rothschild years make him an easy election target

Stint at investment bank leaves centrist candidate vulnerable in French campaign

Reuters

MARCH 28, 2017 by: Anne-Sylvaine Chassany in Paris and Arash Massoudi in London

When Emmanuel Macron (https://www.ft.com/topics/people/Emmanuel_Macron) told

friends in 2008 he was joining Rothschild, the prestigious investment bank, the then 30-
year-old civil servant was warned it could scupper a future career in politics.

Youre conscious that banking is not any kind of job? And Rothschild not any kind of
bank? said one friend to the man who, nine years later, would become frontrunner in
Frances presidential election (https://www.ft.com/french-presidential-election).
Mr Macron shrugged off the warnings and learnt the ropes of debt restructuring and
mergers and acquisitions, earning 2.9m and a nickname the Mozart of finance
for his role advising Nestl on its $12bn acquisition of a unit of Pfizer in 2012. At
Rothschild he found himself at the heart of French business intrigues, acquiring the
codes and jargon of a world where careers largely depend on having attended the right
elite university.

Now, with France still scarred by the global financial crisis, Mr Macrons four-year
investment banking stint has made him an easy target for rivals in a presidential contest
fraught with scandals and populist jabs.

Far-right leader Marine Le Pen, who opinion polls suggest will face Mr Macron in the
elections decisive run-off round in May, has portrayed the centrist politician as the
candidate of finance. Socialist candidate Benot Hamon has demanded that Mr Macron
disclose the list of his wealthy donors, while hard-left Jean-Luc Mlenchon has pointed
to the power of money behind his candidacy.

Even the pro-business Republican party, whose candidate Franois Fillon is embroiled in
a corruption probe involving a billionaire friend, released a drawing of the rookie
politician with a hooked nose and top hat, tapping into 1930s antisemitic conspiratorial
imagery (Mr Fillon has apologised and promised to punish those responsible).

Mr Macron said his business connections would not influence his policies. I am free, he
insisted as he fought off attacks during a televised debate last week.

The presidential hopeful is not the first French politician with experience in finance.
Georges Pompidou worked at Rothschild for eight years before becoming Charles de
Gaulles prime minister and successor in the Elyse Palace in the 1960s. But the eurozone
debt crisis, and an underlying suspicion of money and capitalism, have deepened anti-
bank sentiment, according to Luc Rouban, a professor at Sciences Po Cevipof.

Most candidates are vowing to rein in finance, Prof Rouban says. This makes Macron
look like the candidate of the globalised elite.

Macron, right, in 2007 as part of a cross-party commission set up to look at ways to boost French economic growth
Shutterstock jpg Haley/SIPA/REX/Shutterstock

Former Rothschild colleagues and clients who worked with Mr Macron describe a hard-
working, ambitious beginner who learnt fast and had a gift for empathy with clients.
The graduate of ENA, the elite school that breeds Frances future leaders, came
recommended by powerful alumni of the institution, including Franois Henrot, a
longtime Rothschild partner. But young bankers were not so impressed.

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He was the guy who would constantly say thank you, a former colleague said. He
didnt know what ebitda [earnings before interest, tax, depreciation and amortisation]
was. He didnt try to hide it. And instead of looking it up in a corporate finance book, he
asked around, which was disarming.

Another banker who came across Mr Macron on several occasions says that his ambition
was always two steps ahead of his experience, adding: When you are smart like him
that means you are fine 98 per cent of the time, but that means that in 2 per cent of the
time you can end up in a hole. But he managed to avoid any problems.

What Mr Macron lacked in technical knowledge and jargon at first, he made up for with
contacts in government, says Sophie Javary, head of BNP Paribas corporate finance in
Europe, who was asked by Mr Henrot to coach Mr Macron in the first year.

He didnt know anything but he understood it all, says Alain Minc, an adviser who took
him on to help on the debt restructuring of Spanish media group Prisa.

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In a twist of fate epitomising the close ties between the Paris business and political elites,
Mr Macron was part of the Rothschild team advising Thierry Breton, a former economy
minister turned chief executive of technology firm Atos, on the purchase of a Siemens IT
unit in 2010. Four years later, it was Mr Macron who became economy minister.

On the Atos deal, Mr Macron had a fairly junior role at the time he would be asked to
redo the financial models on Excel, the basics, recalled an adviser. But a few days after
the deal was announced, Mr Macron was made a partner. A few months later, he stunned
colleagues and rivals by winning a role in Nestls purchase of Pfizers infant food
operations.

At the time, Lazard, Rothschilds arch-rival in Paris, dominated cross-border dealmaking

and had a close relationship with the Swiss group. Luckily for Mr Macron, Lazard was
conflicted because French yoghurt maker Danone, another of its clients, was also eyeing
the deal. It also helped that Mr Macron had already made an impression on Nestls
chairman. Peter Brabeck-Letmathe had served on a cross-party panel on reforming the
French economy; before joining Rothschild, Mr Macron had helped draft the panels
report.

At the bank, Mr Macron mastered the art of networking and navigated around the
numerous conflicts of interest that arise in close-knit Parisian business circles, making
good use of his connections as an Inspecteur des Finances an elite corps of the very
highest-ranking graduates from ENA.

In 2010, he advised, for free, the staff of Le Monde when the newspaper was put up for
sale. Journalists at the daily started doubting his loyalty when they happened upon him
in conversation with Mr Minc, who was representing a bidding consortium that the staff
opposed. They did not know that it was Mr Minc, a fellow Inspecteur des Finances, who
had helped the young Mr Macron secure his interview at Rothschild.

A media executive who was part of the same consortium recalled: It wasnt clear who
Emmanuel worked for. He was around, trading intelligence, friends with everyone. It was
smart, because he got to know everybody in the media world.

French election

Poll tracker (https://ig.ft.com/sites/france-election/polls/)

Who is leading the presidential race in France?

(https://ig.ft.com/sites/france-election/polls/)

Mr Macron moved up, while some stayed put, whatever their experience. Pierre Albouy, a
less-favoured pharmaceuticals dealmaker at Rothschild, was the first in the bank to pitch
the Nestl-Pfizer deal, arranging two meetings between the companies in Vevey long
before the US company put its infant unit up for sale, according to two people with
knowledge of the matter. He left Rothschild after it was suggested he had little chance of
becoming a partner. Mr Albouy declined to comment for this story.

Mr Macron says he does not regret his Rothschild years. I have learnt a job; every
political leader should have one, he wrote in his book Revolution, released earlier this
year.

En route to becoming a politician, Mr Macron made use of his banking skills. As

economic adviser to President Franois Hollande, he leaned on the Peugeot family to
appoint the industrialist Louis Gallois (another ENA graduate) as chairman of the
troubled carmaker as part of a state bailout. The Peugeot family was advised by Etienne
Boursican, a corporate lawyer, who happens to be Mr Fillons son-in-law.

Mr Macrons time at the bank shows how he sought to benefit from a network of contacts
within Frances tight-knit establishment in contrast with his campaign promises to rid
the countrys insiders of their privileges.

The issue for Macron is that he is the symbol of the French oligarchic elite, which is
difficult to reconcile with his promise of renewal and political disruption, Prof Rouban
notes.

While he wants to overturn the bipartisan structure of French politics, the centrist
candidate does not question the way elites are trained and recruited, notes Jean
Garrigues, a historian. He comes from a middle-class background (he is the son of a
neurology professor and a doctor from Amiens), he is no heir, so he is proof that merit
has still its place in this elitist system.

Hes a perfect product of the French Republican monarchy, Mr Minc says. There are
two Frances, one thats doing well and another thats not. He is a son of the former. He
wants to convince the latter that their children will be able to join him in the former.
 Timeline
1977 Emmanuel Macron born in Amiens, northern France
1995 Attends a prestigious high school in Paris. Studies philosophy at Nanterre
university and public affairs at Sciences Po before moving to the cole nationale
dadministration (ENA) an elite school preparing top candidates for Frances
senior civil service
2004 Graduates from ENA to become an Inspector of Finances at the
economy ministry
2008 Works as investment banker at Rothschild, where he earns about 2.9m,
notably for his role in advising Nestl on the acquisition of a Pfizer unit
2010 Begins work as economic adviser to Franois Hollande, the Socialist
presidential candidate
2012 Serves as deputy secretary-general at the Elyse Palace
2014 Becomes economy minister in the Hollande government
2015 Introduces a business reform package that prime minister Manuel Valls
forces through parliament despite protest from the public as well as within the
Socialist party
2016 Resigns from government shortly before launching his own independent
party En Marche!

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