An Interview With Lady De Rothschild

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L.G.: You mentioned E.L. Rothschild, which is the company that you run, you're the C.E.O. of. What does it do? I know you have investments in India, which we'll talk about, but what is the idea for the company?

L.R.: The idea for the company is to essentially be a holding company for our global interests, but largely focused on India. So the company oversees our investment in the Economist, for instance, in the U.K. Our most active activity is in India. I sold my last business in June 2000; Evelyn retired as chairman at N.M. Rothschild in 2002. In 2003, we both decided that we wanted to do another major business, and we wanted to do it together, and so we stepped back and looked at where in the world and what industry would be a growth situation. And we decided that Asia was going to be the next spurt of real growth. We were agnostic between China and India, so we spent a year going to both countries, having meetings with whoever would meet with us. I had once read that Henry Kravis when he started K.K.R., went through his father's Rolodex and visited C.E.O.'s of Midwest companies and just said, "You know, how are things going? Would it be of any interest to you to have an outside investor, and you stay in and manage? What do you think the opportunities are?" And that was kind of what I was thinking about when we were making calls to businesspeople, bankers, journalists, think-tank people, politicians, to get a sense of what opportunities there might be.

L.G.: In both countries?

L.R.: In both countries. It started out with both countries, but within about four months, five months, we decided to limit ourselves to India. Part of that was that in 2003, $49 billion of foreign direct investment had gone into China, and $4.9 billion had gone into India. And on a macro level, if China is better, or was better, it wasn't 10 times better. So our opportunity seemed better just financially. Also, we were more comfortable with democracy. We were more comfortable with rule of law. There's the obvious British-Indian link culturally that was important for Evelyn and interesting for me, so we began focusing on India.

L.G.: If you're a business, is an unwieldy, sometimes insane-seeming democracy better than an authoritarian regime?

L.R.: Well, it's not better when you're in the middle of it and it's driving you crazy. It doesn't always feel better. But you do know in your heart of hearts that when you play by the rules and you get something in place in India, it is going to stay there. So I believe in the long term — and sometimes India can feel like it's exasperatingly long-term — it is a safer bet.

L.G.: And how did you hit upon the export of fresh fruits and vegetables? I've looked at your history. I don't see any of that in your history unless you have a mean kitchen garden in the country.

L.R.: [Laughs.] Well Evelyn was the closest that we got to agriculture. He's a gentleman farmer in England, so he was our closest link to agriculture. No, that was a very unexpected result. But in that process that I was describing to you, one of the first questions to people would be: So what is the next opportunity? B.P.O.-business processing operation-that's already well-known. Outsourcing and technology are well-known. My area, which was technology and telecom, was already very highly capitalized even back in 2003. So what's next? What's next, what's needed, and what's big? And from different sources, consultants, businesspeople, we would be given this series of facts about the agricultural sector-that 40 percent of all produce in India goes to waste.

L.G.: Right.

L.R.: That China has 60 percent of the arable land of India, but it's 40 percent more productive because of technology. That India is the largest producer of fruits, No. 1 in the world, No. 2 in vegetables, and has only 1 percent of the export market. So, those are all really big factors that we know how to fix. You fix them with technology on the ground, with cold storage and infrastructure on the ground. And if the retail sector isn't ready to buy higher-quality fruit and vegetables, which I always thought they would be-but three years ago, it was less obvious than now-you could export them and be the lowest-cost exporter.

L.G.: So you can export them to parts of Asia and Europe?

L.R.: Yes, and Japan.

L.G.: I see where you have you established this agricultural research center-is that now up and running?

L.R.: Yes, yes, it's up and running.

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