These next-gen business minds are combining personal and family experience to blaze new trails.
Mark Strong has seen the good and the bad of generational wealth transfer. As senior manager for Ernst & Young LLP (EY), he advises a number of affluent families and says that, done right, such a transfer can secure a hard-earned future. “My clients worry about whether they are passing on too much wealth, too soon, to their children,” says Strong. “They want to see their children become fully educated and start their own careers or businesses before giving them full access to the family wealth.”
Coming from the perspective of an heir, Donahue Peebles III has similar reservations. “In many regards,” he shares, “I think irrevocable asset transfer serves to undermine the personal agency and ambition of the next generation.” Peebles, senior associate of development at the Peebles Corporation handles acquisitions and development for the company his father built. “I try to do justice to the opportunity that my family has provided for me,” adds Peebles, who has chalked out an important role in the business, deftly administering the delivery of its SLS Hotel that he says will “build on the cultural vibrancy of downtown Washington D.C.”
Donahue Peebles III is heading up delivery of the new luxury SLS Washington D.C. slated to open in 2019
Many of Strong’s clients would prefer to have heirs as mindful as Peebles III, particularly since many control their own businesses. “In some cases, they are the first generation to have created the family wealth. Passing family businesses down through the generations requires very different planning techniques and strategies, in comparison with those clients whose wealth is in much more liquid form,” says Strong. Rather than focusing on one technique from a checklist, he emphasizes that generational transition of wealth is more of a process, not just a plan.
Zach Leonsis, senior vice president of strategic initiatives for Monumental Sports & Entertainment and general manager of Monumental Sports Network, is another millennial with a family business pedigree. His father, Ted Leonsis, born to a family of working-class Greek immigrants, is founder, chairman and CEO of Monumental Sports & Entertainment. Based on the younger Leonsis’ track record of success, penchant for pushing innovative initiatives—Monumental Sports Network is the country’s first direct-to-fan digital regional sports platform—and recent purchase of Politico founder Robert Allbritton’s former six-bedroom Kalorama home, he might need to start thinking about his own family succession plan soon. One way to do just that is with a family retreat.
Zach Leonsis is overseeing Monumental Sports’ strategic initiatives and livestreaming network
Take EY NextGen Academy, a one-week training event designed for young successors of family businesses to discover their potential, develop their entrepreneurial talent and act as change agents by turning innovation into value. “It informs children and grandchildren about what it means to be in the family business or to have such significant wealth,” explains Strong, who adds he is noticing that many next-gen heirs are becoming more socially conscious.
Case in point: Katherine Lo, the visionary behind Eaton Workshop, a hospitality concept created as a space “where artists, journalists, politicians and people of all ages and classes can come together to learn and grow.” Set to open later this year, Eaton Workshop is part of the Great Eagle portfolio of brands, which is chaired by her father, Dr. Ka Shui Lo, the billionaire Hong Kong property magnate who also controls the luxury hotel brand Langham, where Katherine worked as executive director.
Katherine Lo’s Eaton Workshop combines her passion for social justice with her marketing and hotelier experience
“Four years ago, my father asked me to create a new hotel brand that would anticipate and impact our rapidly changing world. I took my personal background in art and activism and funneled that into my vision for Eaton,” Lo told Capitol File, adding, “Eaton is a way for me to channel my family business’ resources into doing good in the world.”
Peebles III is using his platform to affect societal development too. “The construction of affordable housing aligns with our corporate culture … It’s why we commit to 35 percent of every dollar spent to go to minority-and women-owned businesses,” he says.
Brett Johnson is paving his own path while following in his parents’ entrepreneurial footsteps. The son of billionaire Robert Johnson and uber-businesswoman Sheila Johnson, he started an eponymous luxury menswear line, Brett Johnson Collection, that exudes sophistication and edge. He opened his first concept store in New York’s Soho neighborhood last fall. Like Peebles, Leonsis and Lo, he’s letting his work, not a family name, speak for him. “People prejudge you and believe everything has been given to you and not earned. I try to focus on things that are in my control—work ethic, design and craftsmanship,” says Johnson. “My goal is to consistently embody a willingness to learn, grow each day, never become complacent and continuously question the status quo.”
Brett Johnson recently opened his first menswear concept store in Soho, New York
What do these first- and second-generation business minds need to know to ensure their gains are passed on? “The clients that do this best have real, open communication across generations about their wealth,” Strong states. And about those new tax code changes? Strong quips, “As Benjamin Franklin is often quoted as saying, nothing is certain except death and taxes.”