The Man Behind The Man
Monday, August 25, 2008
It's early on a spring morning and Peter Kirsch is busily overseeing the fast-moving life of AOL founder James V. Kimsey. Seemingly everything that touches the mogul finds its way to Kirsch's desk in his ninth-floor penthouse office overlooking the White House, from philanthropy to investments, from politics to friendships to the management of the sprawling Kimsey household.
As chief of staff in the Office of James V. Kimsey, Kirsch is a quiet force on the local scene.
He arrives at the office at 7:30 a.m. to prepare for another day of controlled chaos. At 9 a.m., he gets his daily briefing. Office accounting manager Stephanie Weir reports nothing amiss in Kimsey's balance of payments big and small, be it DirecTV or NetJets, Burning Tree Country Club or Nationals baseball tickets, American Express (Black Card) or a utility bill.
Next up is receptionist Brie Hytovitz, the first person to greet office visitors, whether they be Ted Turner or Ted Leonsis. When the Potomac Conservancy wants to have a fundraiser at the Kimsey estate, Hytovitz makes sure the tent company, caterer and parking valet are there. She has recently been putting the final touches on Kimsey's next monthly "boys' lunch" with friends, scheduled for Oceanair, a seafood restaurant in downtown D.C.
On it goes, as the meeting melts into the day. Pinning Kirsch down on the phone or in person takes effort. He jumps from one call to another, holding discussions with Hytovitz and a visitor at the same time, while an entrepreneur who needs cash cools his heels in the conference room. One minute Kirsch is on the phone with a big hedge fund manager, the next he is sweeping down the elevator to attend his son's sporting event.
Kimsey's family office and many others like it were once the province of a rarefied few with names such as Rockefeller, Phipps and Kennedy. But with the huge growth in wealth over the past decade, family offices have become an essential arm of the newly rich.
"Family offices are a relatively new phenomenon," Kimsey said. "There weren't many models where you could go to do this. I did it intuitively. I have four people [in the office] and five people at the house, and I don't even have a job. Why it takes that many people to sustain me is hard to explain. They have been with me for a long time, which makes things run smoothly because they know my habits and predilections."
A recent survey by the Family Wealth Alliance listed 83 multifamily office firms with $334 billion under management, compared with 63 firms advising on $169 billion five years ago. The number of ultra-high net worth households in the United States, defined as those with a net worth of $5 million or more, rose to a record 1.16 million in 2007, up from 210,000 in 1997, according to Chicago-based Spectrem Group. There are now 9.2 million U.S. households worth $1 million or more, not including the value of their primary residence, according to Spectrem.
Between 2,500 and 3,000 family offices operate in the United States with thousands more existing informally inside privately controlled businesses, according to John Benevides, president of the Family Office Exchange, which advises exceptionally wealthy families. Benevides said the market is unquestionably one that continues to grow.
"Family offices come in all different kinds of sizes, shapes and flavors," said Thomas R. Livergood, chief executive and co-founder of the Family Wealth Alliance, which helps wealthy families find qualified family offices to manage their affairs. "It's usually dictated by what a family wants and the skill set they need to run their office."
Kirsch, 45, runs Kimsey's office in a collegial, peripatetic fashion. On this day, he devotes a couple of hours to Kimsey's current passion, the International Commission on Missing Persons, which consumes vast amounts of Kimsey's time and fortune. ICMP, which has taken Kirsch and his boss to Bosnia, Iraq and Afghanistan, identifies victims of mass atrocities around the globe.
Today it takes Kirsch to Pentagon City, where he meets with a State Department representative. He gets lost on the way, which takes a slew of cellphone calls to fix. Later in the day, he will visit Rep. Jim Moran (D-Va.) on Capitol Hill to ask for more money to search for graves.