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Horizons: Family Office & Investor Magazine

Private Time with Stephen Kennedy Smith

Saturday, November 03, 2018

Members of the Kennedy family have been involved in public service since 1884, 35 years after their forebears arrived from the Republic of Ireland.

Stephen Kennedy Smith is the son of Stephen Edward Smith and Jean Kennedy Smith, the eighth of nine children born to Joseph P. Kennedy, Sr. and Rose Fitzgerald, with Jean being their longest-lived and last surviving child. Stephen's father worked in the White House staff of President Kennedy, managed the political campaigns, ran the business affairs and oversaw the Kennedy family trusts.

Stephen Kennedy Smith is a principal at Park Agency - Joseph P. Kennedy Enterprises, the Kennedy family office, and an investor and entrepreneur. Stephen also is the editor of JFK- a Vision for America, published by Harper Collins. He currently is a lecturer at the Sloan school of Management in the visionary investing program, as well as a fellow at the Connection Science Group at MIT. He is also a three-time recipient of the Danforth Award for Excellence in Teaching at Harvard University.

Stephen Kennedy Smith is currently involved as a board member, advisory board member or partner in a number of health care and technology businesses. He received his BA from Harvard University, J.D. from Columbia University, and MA Ed from Harvard University School of Education. His current investment and business focus is scaling innovative healthcare, and neuroscience companies

The bulk of the Kennedy family's wealth is held in a number of trusts which are mostly managed by New York based Joseph P. Kennedy Enterprises, the Kennedy family office with assets dating back to 1927, according to Forbes. Joseph P. Kennedy's choice to place his fortune in trusts is possibly the single most critical reason why the family wealth is still around today.

Matthias Knab: This photo shows the Kennedy family 1938 on the grounds of the U.S. Embassy in London. If you look at it, everyone is smiling and happy. Can you please tell us what happened after that photo?

Stephen Kennedy Smith: Right, this photo of the Kennedy family was taken on July 4, 1938 on the grounds of the U.S. Embassy in London, England. You see my grandfather Joseph Patrick Kennedy who had risen from an immigrant background to being one of the richest men in America. President Franklin D. Roosevelt appointed him to be the first chairman of the U.S. Securities and Exchange Commission (SEC), and he later directed the Maritime Commission and served as the United States Ambassador to the United Kingdom which at that time was most powerful diplomatic position. So, this photo was taken about one year before World War II broke out. As you referred to, what's really remarkable about the photo is what happened afterwards. If you look to my grandfather's right (4th person from the left), you see my mother, Jean Kennedy, who is the last member of the family alive. And then her right (3rd person from the left) is my Aunt Rosemary who was born with intellectual disability. My grandfather was advised by the leading doctors at that time that she should have an operation called prefrontal lobotomies. And so, at age 23 a part of her brain was removed, but the operation failed, and she was disabled for the rest of her life.

And then, to my grandmother's left, you see my Uncle Joe who was a Naval Aviator killed in a secret bombing raid in 1944. On the far right is my Aunt Kathleen who was also killed in a plane crash in 1948. Then, President Kennedy to the left of the photo came home with a war injury from an incident when the Japanese destroyer Amagiri suddenly rammed and cut in half the patrol boat he was commanding on the Solomon Islands. That injury caused him severe pain for the rest of his life.

What this really dramatizes is the tremendous suffering that our family went through, and I think part of what catalyzed our interest in public policy and medicine was an effort to somehow transform this suffering into some constructive purpose. William James has this very famous essay called, "What Makes the Life Significant." And in that essay, he says that "The solid meaning of life is always the same eternal thing,— the marriage, namely, of some unhabitual ideal, however special, with some fidelity, courage, and endurance; with some man's or woman's pains.—And, whatever or wherever life may be, there will always be the chance for that marriage to take place."

I believe when President Kennedy came home from the war he found his unhabitual purpose. He covered the UN Convention in 1945 in San Francisco, and in his dispatches from the convention he said that the one thing the world cannot afford is another war. If you look at his history as a President, he was able to avert war with the Soviet Union during the Cuban Missile Crisis. He also prevented China and India from getting into a nuclear war during his presidency. He was able to get the Nuclear Test Ban Treaty signed. And he gave really one of the greatest speeches of the 20th century history at American University where he said that, "In the final analysis, we all inhabit this small planet, we all breathe the same air, we all cherish our children's future, and we are all mortal." His own life then ended, as we all know, with the assassination in 1963. So, going back again to the July 1938 photo and what then enfolded, this kind of crucible of suffering was and remains a great creative force for our family.

In my own life, when I was 11 years old, I was on Robert Kennedy's funeral train which my father organized. Robert or "Bobby" Kennedy was United States Attorney General and then Senator for New York until his assassination in 1968. His body was taken from St. Patrick's Cathedral in New York to Arlington Cemetery in Washington, and while typically that trip might have taken four hours, it took us eight hours because of the thick crowds lining the tracks on the 225-mile journey, of every kind of person you can imagine: Black people, white people, Chinese, American, Jewish people, war veterans and holding flags and their children's hands.

That made a very big impression on me. There were more than two million people in total, often as far as you could see on both sides of the tracks for eight hours. When you go through an experience like that, you just realize that you are connected to a much bigger reality than your own personal ego, and I don't say that in a grandiose way, but a reminder of what is really true in life, which is that we are all mortal. I believe if you keep that in mind, then it organizes your priorities in a different way than when you just focus on money or on getting what you want. That was one big lesson I believe I learned quite early in life.

The other lesson is that that you have to persevere, and one in the quotes that I put in my book JFK- a Vision for America was from President Kennedy's journal and it's from one of his favorite writers, John Buchan: "No cause is ever lost or won. The battle must always be rejoined, the creed restated." I think that my uncles taught me tremendous sense of perseverance and dedication by their example, which is still inspir inspiring to me. I feel very fortunate to have been able to benefit from their example.

Matthias Knab: What do you think is the role or the message of the Kennedy family today?

Stephen Kennedy Smith: That's a really good question. I think that there could be a lot of messages, Ironically the motto of the Kennedy family is "consider the end". To me that means consider the end to which you are devoting your time, and also consider your actions in relation to your own mortality. I would say that possibly the overriding message is that personal responsibility and contributing to society is important. In line with that, and because of our religious upbringing and Catholicism, I think we believe that it's important to help others and not just be focused on yourself.

Allow me to take you back over 50 years ago when Robert F. Kennedy gave his greatest speech in South Africa which people then called "Ripple of Hope" speech saying that "it is from numberless diverse acts of courage and belief that human history is shaped each time a man stands up for an ideal or acts to improve the lot of others or strikes out against injustice. He sends forth a tiny ripple of hope, and crossing each other from a million different centers of energy and daring, those ripples build a current that can sweep down the mightiest wall of oppression and resistance."

And so, when he left South Africa, Robert Kennedy had instructed the pilot to fly down low over Robben Island and tilt the wings of the plane. The gesture was symbolic, of course – a show of solidarity with the political prisoners – and one that angered the apartheid regime at that time. Many years later, Nelson Mandela personally came to to the Kennedy Library to thank my uncle Ted Kennedy for that speech. That is an example of the kind of connection a moral act can have. And so, when you feel like you are personally powerless in the face of the great circumstances of history, I guess you can always pull back on your ability to do something that is the right thing, as small as that could be. I think that's really the message that I take in response to your question

But let me also add that the Kennedys are not saints, we have plenty of faults, right? So I am not saying we are better than anybody else, I'm just telling you what I learned from watching my uncles when I was growing up. This is what I took from it. They have their faults and we all have our faults.

Matthias Knab: At a recent family office conference I heard you speak about two angles in your family office's healthcare investments – commercial and non-profit. Can you tell us more about those?

Stephen Kennedy Smith: Sure. Because of what we went through, our family office and the Kennedy Foundation has been focusing a lot on sponsoring new research and innovation in medicine and healthcare. My grandfather was very generous and endowed the chair of Neuroscience at Harvard Medical School as well as ten other centers of medical excellence, including the Georgetown Center for Bioethics and other things. My aunt Eunice initiated the Special Olympics, and so as an extended family we have non-profit involvement and then also a deep involvement with medical innovation and research.

I personally and other family members have taken an interest in some investments in this area as well because of our network in health care. My uncle Ted Kennedy was very involved in overseeing and funding of biomedical research for many, many years, so we didn't really get involved in business when he was around because we didn't think it was appropriate, but now members of my generation are. In 2017 I published JFK - a Vision for America, for which I also asked the most prominent American

political leaders, historians, artists, and writers to write about JFK's great speeches. One contributor was the historian David McCullough who is perhaps considered our greatest historian, now I think 84 years old. He told me that if he was a young man today, he would be writing or studying the history of science, because he thinks science is going to be the transformative and most influential force in global civilization in the coming period. I fully agree and that's exactly why I am tremendously interested in science and medical research right now. When you look at the explosion of innovation which happens in complementary ways in areas such as genetics, stem cell biology, artificial intelligence, I think that the coming together of those different, completely new technologies are going to transform global health and human civilization. I would say that if you are an intelligent person or an investor, you can't ignore that fact.

And then, of course, we have the very human dimension of transforming lives. This is probably the fundamental reason why I find healthcare so compelling. Information technology is great and in some ways it does change lives in very important ways, but there's nothing like actually saving a life, or helping someone who has an incurable illness is a whole different level than just creating better communication, and so I find that tremendously exciting.

Matthias Knab: Can you mention some company names you are currently involved with?

Stephen Kennedy Smith: I have a holding company New Frontier Bio that develops companies. One company we cofounded is Pear Therapeutics. We just got the first FDA approval for digital health which includes disease-modifying treatment using a cellphone. We have partnerships with Sandoz and Novartis to create ten different drug software combinations utilizing evidence-based cellphone interventions combined with medication to treat different diseases. The areas we have now partnerships are in addiction, sleep disorders, schizophrenia and serious depression.

We also have a company that is using computational biology and synthetic peptide design to develop a whole new category of drugs for brain-related illness and for cancer the technology was originally funded by the U.S. Defense Department. That company is called Resolute Bio. Then I'm also starting a state-of the-art regenerative medicine clinic. We are seeking regulatory approval in a number of countries to open up what we believe could be the world's most advanced regenerative medicine clinic.

Matthias Knab: If somebody is interested to invest with you and support your purposes, how would that work? Do you offer co-investments or are these companies public already?

Stephen Kennedy Smith: Pear is projected to go public in 2019. We just did a large institutional round, so I'm not sure if we have more room for investment in that company. We are taking investments right now into the other two companies.

Matthias Knab: In this "Private Time" interview series in Horizons, we also aim to get to know our interview partners on a more personal level as well, for example, we ask for books that you love or if you want to share anything more personal

Stephen Kennedy Smith: Well, In terms of something idiosyncratically personal, I grew up in a competitive and somewhat combative family and when I was a young man I used to box in college and in law school, I boxed in Norman Mailer's boxing club " The Raging Jews" which included the actor Ryan O'Neil and the former light heavyweight champ Jose Torres. And boxing taught me some interesting things.

When I was in my late twenties I gave up boxing and started to do yoga and meditate and meditation has now become the foundation for my response to the world. I still think there is a virtue to learning how to defend yourself against bullies though. When they asked President Kennedy how he wanted to be remembered he said, "As an idealist without illusions " I admire that response.

I can surely continue now talking about some books that I love: I love Ralph Waldo Emerson – just on top of my head I recall his essay on self-reliance and also an essay called the "American Scholar." In my view, Ralph Waldo Emerson is the greatest American philosopher – he also has a connection to the great mystic philosophers of other times and cultures. Emerson and Thoreau were the transcendentalists, and their transcendental philosophy connects in a way with the deep meditative tradition of the East, for example, Buddha or the Indian Rishis.

I think when you're looking for a deeply inspirational, spiritual American thinker, I can't think of anyone who really compares to Emerson. I also obviously love William James because William James was the inventor of psychology, the application of science to the life of the mind, and by marring philosophy and science he really created a whole new discipline.

Another writer or personality that comes to mind is Vaclav Havel. Two of his greatest writings are the Power of the Powerless, and Living in Truth. I think he is to some extend very connected spiritually to my uncles in terms of his political philosophy, his advocacy, his zest, and his courage in taking on a totalitarian regime. He spent multiple stints in prison, the longest being nearly four years between 1979 and 1983, before becoming the last President of Czechoslovakia from 1989 until the dissolution of Czechoslovakia in 1992 and then as the first President of the new Czech Republic from 1993 to 2003. His Civic Forum party played a major role in the Velvet Revolution that toppled communism, and so ultimately through his own perseverance and genius, he was able to transform his society and also keep the country try on a peaceful path during that challenging time of regime change and the split of Czechoslovakia into the Czech and Slovak Republic. He is considered by some to be one of the most important intellectuals of the 20th century, and clearly, he is a wonderful example of how much leadership matters.

In terms of science books, I think E.O. Wilson's book, "The Nature of Human Existence" is one of the really great modern books and should be read by everyone because he talks about the connection between human beings and all other forms of life. I believe this is really an important message right now. He delivers that message in a really profound way that makes you realize that our over emphasis on the uniqueness of human beings is misguided, and that we really need to pay attention to other species and the health of the planet because of this truth that my uncles taught me already when I was young, the truth of interdependence. At the moment we are in this particular historical moment where for whatever reasons we are having this upwelling of materialism and tribalism and selfishness. I am sure these forces have always been present, but they seem to be having a little bit of a moment right now. I think that it's important to people to speak and act in ways that contribute to common good, and for me this is also the way to live a really happy life.

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