Kennon-Green & Co. Recently Grew to More than $105 Million Under Management and Is Relocating to an Expanded Office at 520 Newport Center Drive in Newport Beach, California
Yesterday evening, I posted a 3,600+ word update on the Timeline feature of the Kennon-Green & Co. Private Client Portal, which is essentially the private client-only blog, letting the firm’s private clients know about this. With that done, I can now share a general update about some exciting changes that are happening at our wealth management firm, especially for those of you who have been around since the beginning and like to keep track of our progress.
The short-version: Our recent growth has been explosive. On any given afternoon, we find ourselves entrusted with the responsibility of managing north of $105 million, fueled by a combination of reinvested profits (realized and unrealized gains, dividends, and interest), net client contributions, and new private client relationships. This has been achieved despite not marketing ourselves, not, yet, launching our website, and focusing our time and attention on existing clients while developing a back-office structure that can support us up to the point we truly become an institution. This is going to trigger a round of regulatory changes, some of which we were only barely able to avoid (e.g., large cash and brokered certificate of deposit balances kept us under the Form 13-F threshold but that might not last much longer).
Last year, on the eve of the pandemic, we signed a five-year commercial lease to open an office at 5 Park Plaza in Irvine, California. At that time, I shared pictures with you. As a result of Covid-19, we were forced to work from home, development was delayed (it wasn’t even fully furnished until fairly recently – we still had not even hung a single painting on the wall), and the complex itself, which had restaurants, an upscale hotel, and was home to the regional offices of firms like Coca-Cola and Microsoft, became a ghost town. It was surreal.
With Dorian now here with us, and his brother arriving in November, Aaron and I sat down for a series of meetings on how to best optimize our lives as new parents and in light of where the firm now found itself. We worked with the Irvine Company to terminate our existing five-year lease, effective at the end of August, and replace it with a new five-year lease at the real estate giant’s flagship modern tower, 520 Newport Center Drive. It is down the street from where we live, allowing us to be at our desks within minutes. It’s also almost twice the size of our existing office, allowing enough space that I think we could probably handle $400 million to $600 million in capital before we needed to expand, again. Even better, the finishes were already done and it looks like a private wealth management group, letting us walk in and establish operations right away.
We currently have possession of the suite but our official commence date for operations at the new location will be September 1st, 2021. As a result, our new address is:
Kennon-Green & Co.®
520 Newport Center Drive, Suite 450
Newport Beach, CA 92660
It will look slightly different once our furniture, bookcases, and equipment is/are moved into the space but here are some pictures since many of you have not been able to make it out to Southern California due to travel restrictions over this past year. For those of you who have visited us in person, and we met at Fashion Island (usually the Starbucks or somewhere around there), this is the building right there when you look up to the sky.
Among the details I shared with clients: Our plans for hiring. I’m not going to be as precise here, as I was with them, but between $165 million and $250 million in assets under management, our payroll will expand as we will put together the initial team that will be helping us build the institution. We’ve reached out to most of the leading candidates and begun conversations about what it would take to get them to relocate to Newport Beach. My goal is that, if and when we reach $250+ million in assets under management, I should have materially more free time than I do now, allowing me to spend almost every moment focusing on capital allocation (reading, managing portfolios, etc.), writing private client letters and blog updates, and talking to clients. It’s a bit like the model of a space shuttle taking off; as it reaches higher in the atmosphere, it requires less and less fuel to generate thrust.