Joining the First Families

Operating on their own, either the Rothschilds or the Rockefellers would seem to have all the financial muscle they could want or need. Taken together, the power and acumen of the two families open boundless possibilities. Now for the first time they have joined forces--in a new European mutual fund called the 3-R Fund. Early next month 3-R will offer about $10 million in shares to the Italian public. A quarter of the control will be held by N.M. Rothschild & Sons, the London bank that represents the British branch of the multinational family. Another 25% will be held by IBEC (International Basic Economy Corp.), a publicly owned U.S. development company that is controlled by the Rockefeller family. The third R in the new fund, and owner of 50% of the stock, is a powerful Italian insurance company called R.A.S.

Bringing the Rothschilds and Rockefellers together was a personal triumph for Ettore Lolli, president of R.A.S. Lolli, 61, emigrated from fascist Italy to the U.S. in 1940. After the war, he became the Manhattan representative of Banca Nazionale del Lavoro, Italy's big government-owned bank. Called back to Rome in 1957 to be groomed for the bank's top job, he also became a director of IBEC. Lolli eventually found himself blocked by the Socialists in the government; they wanted a member of their own party to head the bank. So he left Lavoro in 1966 and was asked to run R.A.S. When another major insurance company began tying the cash value of its life policies to the cost-of-living index, Lolli was faced with keen competition. Although he considered his competitor's plans unsound, he had to offer his own clients a hedge against inflation. "I had to give my R.A.S. agents something extra to sell," says Lolli--and he decided on mutual funds.

Ripe for the Venture. The question was, what fund? Lolli's answer was to interest IBEC in helping form a new Italian fund. Later the Rothschilds, with whom Lolli had been involved in forming a British merchant bank, offered their backing, and 3-R was born. The chairman of the fund will be Evelyn de Rothschild, 38. the polo-playing contender for leadership of the British house of Rothschild.

Italy seems ripe for the venture. Poor investment opportunities and the country's continuing political uncertainty have caused a soaring sellers' market in foreign mutual funds. The rush to buy was so great last year that the Bank of Italy stopped all sales except those of foreign funds that agreed to put half their assets into Italian stocks. With its highly placed board of directors and its research talent, 3-R should have little trouble finding investments in Italy. If they succeed there, the two first families of international finance might well look elsewhere for joint ventures.

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