Stern's death sparks a murder probe

THE death of French financier Edouard Stern, which is being treated by Swiss police as murder, leaves a gaping hole in boardrooms across Europe.

Stern, 50, the one-time heir apparent to Michel David-Weill as chairman of investment bank Lazards, was a director of London-quoted engineering group Delta and of Franco-Spanish tobacco giant Altadis. He also ran investment funds said to be worth more than $600m (£314m).

Shares in Delta rose more than 4% as investors speculated that the death of its chairman, who had a 26% stake worth £41.7m, might leave it vulnerable to a bid. The company said it was still awaiting official confirmation of his death.

Staff at Altadis, where Stern had been a director for several years, declined to comment. Nor was there any comment from Eurazéo, a Paris-based private equity group chaired by David-Weill, which has a partnership with investment group IRR Capital, a Cayman Islands-registered company of which Stern was chief executive and vice chairman.

In Geneva, where Stern was found dead in his plush apartment on Wednesday, a magistrate has been appointed to head a murder investigation.

Born into a wealthy Paris family, Stern left the elite Paris postgraduate school Essec after a year to join the family bank. With the support of two uncles, he deposed his father as head of the business and sold it to Lebanese investors. He then joined Lazard, where he stayed for five years, marrying the chairman's daughter, Béatrice, a Sotheby's expert in European paintings, in 1983. He headed the group's US operation in New York.

The couple counted among their friends Lindsay Owen-Jones, the chief executive of cosmetics group L'Oréal.

The relationship between Stern and his father-in-law cooled, and he left Lazard to start his own investment businesses.

Two years ago, Stern and one of his investment companies, Mainz Holdings, brought a legal action against Lazard over the poor performance of an investment company in which they both had an interest. Mainz and Finance & Trading are the vehicles through which Stern held his stake in Delta.

His venture with Eurazéo also disappointed. It and Eastern Promise, a company owned by Stern, each invested €264m (£181m) in IRR Capital, which combined stakes in quoted companies with private equity investments, in April 1997. IRR was controlled by Stern. In 2003, Eurazéo valued its stake at €190m after a writedown of €74m.