The Pete Principle

You can’t help gawking at the car. Pete Musser’s ride is parked on this beautiful sunny Sunday in front of the Radnor Hotel, where the legendary venture-capital guru eats breakfast every morning. It’s amazingly, startlingly, blindingly French’s mustard yellow. It’s the yellow of an 11-year-old’s bike, the yellow of an ambitious starlet’s Cannes Film Festival bikini, framing the recent-model convertible with its black interior, tomato-colored seats, and the word MUSTANG singing out in rock-star letters on the doors.

“It’s funny, isn’t it?” Mike Carter, Musser’s 34-year-old colleague, says of the car. The business tycoon’s friends spot it all over the place, parked outside Musser haunts like Fleming’s Steakhouse in Radnor and Aronimink Golf Club in Newtown Square and Chops on City Avenue. The car would be so wrong if it belonged to, say, Hurricane Schwartz. But because Pete Musser is 80, and the former Safeguard Scientifics CEO is a low-key, gentlemanly WASP, it’s somehow perfect. You get the distinct feeling that if Musser wanted to park it in front of Rouge and scoop up some of the Manolo girls at the bar, he could. “He’s a good-looking guy for his age,” says Alex Plotkin, Chops’ owner. That’s certainly true: Musser has been as hot as a share of his NutriSystem stock since he reemerged — at 78 — onto the Main Line dating market two years ago after splitting with his second wife, Hilary.

Sorry, ladies: Musser is now happily involved with Mary Barton, the former wife of Manayunk developer Dan Neducsin, herself a good-looking, dark-haired, youthful grandparent. And while he may appear to be a jet-setter, the truth is that Musser is spending the summer in Bryn Mawr. “As too many women find out when they get into my life [and say] ‘Let’s go to France,’ I don’t really get a lot of zest out of travel,” Musser says. (Sorry again, Rouge girls.) “I keep comparing what I’m doing there to what I could be doing here.” Only a few years ago, this sunny Sunday might have found Musser brunching at his Nantucket estate, or hosting cocktails at the Chester County farm Hilary owned. But today he has exactly three things planned: a game of tennis, spending time with his adored 14-year-old golden retriever Higgins, and taking a walk around his property with Barton, whom Musser gallantly refers to as “the lady I’m dating.” After that, the two will go to dinner at the Wild Onion, the Rosemont tavern that has a very nice wine list, but isn’t exactly tantamount to scoring a table at Tinto.

This is the newest chapter in the roller-coaster life of Pete Musser, the philanthropist and Main Line business icon whom many wrote off after his stunning financial crash seven years ago, but who has regained his iconic stature in the community as he erects the scaffolding of a new business empire. He’s a man who has personally given away more than $50 million to charity, but most days eats half a bologna and cheese on wheat for lunch and then takes the rest home for dinner. “I’ve never seen him happier,” says his friend of 20 years, developer Brian O’Neill.

After Musser’s years of public acclaim and success in turning Safeguard into a blue-chip venture capital firm and himself into one of the richest men in the nation — in 2000, his net worth was nearly a billion dollars — the collapse of his empire in the Internet bubble burst was so sudden and complete that it would have sent most men squirreling off to a golf course in Naples. Or, in Musser’s case, flying off in friend Ira Lubert’s jet to Lubert’s villa on St. Thomas.

But Musser never left town. Instead, he staunchly and steadfastly regrouped. Having quietly retreated in 2001 and 2002 to spend much of his time at Bonfield, his Bryn Mawr house, Musser soared back in 2003, helping launch Epitome Systems, a software start-up. Today he is once again flourishing in business — proof that under the much-praised sweetness and generosity that Musser is known for, there lies an unbreakable core of strength, cunning and pride. His comeback actually began two years ago, when he helped foundering Horsham-based diet company NutriSystem take its stock price from $2 a share to $77 a share in less than 12 months; this year, sales will exceed $800 million. Musser’s now buying into start-up companies, helping entrepreneurs find cash, and also talking about launching a new venture capital fund.

But his business resurgence is only half the story. The old-school Musser approach — hard work, a gentleman’s insistence on repaying his debts — may appear simple, but he is clearly not a simple person. Spend time with Musser and it strikes you that during his journey from vast wealth to significant debt, through divorce and change, he seems to have figured out not just the secret to surviving in business, but a formula for true happiness. It’s as if he’s reduced life to proverb-like essentials: Eat simply. Be kind to everyone who works for you. Have a beloved dog.

And drive a bright-yellow Mustang? After his quick meal at the Radnor Hotel, Musser heads home in the convertible to pick up, well — you know. “I’ll take my golden out for a ride,” he says, heading out cheerfully with the top down. Obviously, he bought the Mustang for Higgins.

“THIS IS THE OFFICE my ex-wife decorated for herself. Nice, isn’t it?” Musser, wearing one of his signature yellow cashmere sweater vests, is smiling, sitting inside the leafy, condo-like office complex on Devon Park Drive in Wayne that today houses Safeguard and its spin-offs.

Musser sees the humor in the fact that while Hilary moved to a $6 million Mediterranean villa in Palm Beach, he wound up in an office off Route 202. The room does have a cushy Gosford Park vibe, with its rich dark-wood built-ins, a pretty yellow chintz sofa, and silver-framed photos; prominently displayed are shots of Cooper, Musser’s four-year-old son with Hilary. Naturally, Higgins is present, too, featured in an oil painting on the wall, looking hilariously proud as he poses in front of the Bryn Mawr mansion.

Praising his estranged wife’s design sensibilities is quintessentially Musserish. “He thinks highly of everyone,” says Diane Swiggard, who’s been his assistant for 35 years. “There have been times when I’ve made comments to him about people, and he doesn’t like when you say anything negative.” Perhaps thatexplains why, in a town that pounces on weakness faster than socialites lunge at Louboutins at a Saks sale, Musser found himself embraced and supported when Safeguard’s stock finally collapsed in ’01. “When he had his troubles a few years ago, there were a few people who weren’t there for him, but his true friends like Ira Lubert — his best friend — spent every day focused on helping him,” says Brian O’Neill.

Friends like O’Neill and Lubert — men of enormous wealth themselves, entrepreneurs whom Musser befriended and helped fund in business before they became boldface names — understood how devastating it was for Musser to lose his position and his wealth. After all, this was a man whose name opened doors all over the Main Line and Philadelphia, who’d given away millions to build a Red Cross blood bank, who had long been the Boy Scouts’ most generous area supporter, and whose annual Musser Award dinner at Temple’s School of Business drew everyone from Ralph and Brian Roberts to Gerry Lenfest to Dennis Alter.

Raised in Harrisburg, Musser had a childhood that his brother once characterized as “hand-to-mouth,” and which inspired Musser’s charitable giving, as well as his belief that you’re far more likely to achieve success if you start from nothing. “The record’s pretty obvious,” he says. “If you don’t have the motivation, or need to be motivated, it’s hard to get the second generation to work.” Musser himself was purely entrepreneurial. After Lehigh University, he quickly left behind work as a Philadelphia stockbroker to buy Safeguard Checkwriter while still in his 20s, growing the company into a conglomerate that went public as Safeguard Industries in 1971. Musser retained part-ownership as he stewarded Safeguard through investments in smaller companies; his most spectacular success came in the 1980s with computer manufacturer Novell, which vaulted from $2.50 to $500 a share in less than a decade, making him rich. Safeguard morphed into a publicly traded venture capital company revered by investors. Also revered was Musser, who built a reputation as a genius who with each new decade could intuit its most profitable businesses — ­manufacturing in the 1960s, real estate in the ’70s, computers in the ’80s — invest in them, and guide Safeguard investors to ever greater wealth.

Through the 1980s, Musser lived in Wayne with his wife, Betty, and their two sons and daughter, but never ­ostentatiously — he was, and remains, much more a tennis-at-Aronimink type than a yacht-in-Cannes sort. Like all entrepreneurs, he took some hits — ­especially during the 1987 market crash — but for the most part, his was a spectacular trajectory. Musser sold Comcast’s Ralph Roberts his first cable system; over a breakfast with Franklin Mint founder Joe Segal, he refined Segal’s vague ideas for “video shopping” into the ­multibillion-dollar shop-travaganza that is QVC. A then-unknown Ira Lubert, today head of a mammoth real estate fund, was an early 1980s resident of Safeguard’s famed suite of cubicles for wayward execs, nicknamed the Orphanage.

Then Musser’s beautiful and fulfilling life went utterly and brutally wrong.

THE TRAGEDY OF Musser’s life wasn’t losing his fortune, but rather losing his son, Craig, in 1990. An artist and Harvard graduate, Craig had worked as a model in Manhattan before contracting AIDS in 1984. He moved back to the Main Line, eventually dying at home. The New Yorker story and HBO movie In the Gloaming, written by a Bryn Mawr-based writer friend of the family, is said to be modeled on the Mussers.

Musser soldiered on at work, but friends noticed a change. He broke down when people thanked him for his frequent generosity; once, he got choked up during a partners’ meeting. While he had business cronies and friends around for support, as well as devotees like his assistant Swiggard, his marriage of over four decades didn’t survive Craig’s death.

His friends, always slavishly protective of Musser, worried and watched. Eventually Musser started to become more like his old self, and one day he met a much younger and exuberant woman who would prove to be a welcome distraction from his loss. She was a fund-raiser for the Franklin Institute. Her name was Hilary Grinker.

“We were friends for a long time, for a couple of years, before we got together,” Hilary Grinker Musser tells me on the phone from her summer home in Nantucket, a beautiful shingle-style house that’s been featured in the pages of House Beautiful. “I didn’t really think of Pete as someone I would date. Then I got very sick and almost died; I had a liver tumor. Shortly before that, he told me how he felt about me, and I sort of ran away.”

Waking up in the hospital changed her perspective. “It didn’t matter if I was 29 and he was 67 or 68,” she says. “So that’s how we started. Everybody thought I was just some young girl fascinated by his stature and money, but I fell in love with him.” In the early 1990s, Musser and Betty separated, and Hilary founded a Safeguard education-marketing company.

Ah, Hilary. Where Pete is reserved, Hilary is outgoing, now appearing in the delicious social pages of the Shiny Sheet in Palm Beach. To some in Musser’s circle, she seemed the anti-Pete, which may explain the attraction and her ability to quell Musser’s grief. She was impulsive, adventurous, loved couture and collected Chanel. A Boston native, she was a regular on the Nantucket social whirl, and the couple built two stunning houses there during their relationship, which she decorated in haute-beach Bennett Weinstockian style. She enjoyed hosting parties, having guests, traveling. “I found her delightful,” says one socialite who sat next to her at a Rittenhouse Square fashion luncheon. “She was very chatty.” Another guest at the Nantucket house says she “was very polite and made me feel at ease.” Others, though, characterize her as willful and materialistic. They criticize her for her cavernous closets, and for involving Safeguard in funding an IMAX-like movie business, MegaSystems. The business, now kaput, later defaulted on a $2.1 million Safeguard loan made in 1998.

But Hilary enjoyed life, and decorating, and Chanel, to the fullest, which appealed in its novelty to her more conservative, bologna-eating, much-­older husband, if not to his mother-hen friends. (Some of the Hilary stories are clearly apocryphal, which only makes them that much more amusing: Is it really possible that she bought and returned a horse in one day because it had too much gray hair?) But Musser loved her, and with her he began to travel in new circles that included boldface names like Tyco chairman Dennis Kozlowski and his wife, Karen. Loyal friends grew puzzled: How could the Jimmy Stewart-ish Main Line icon of strength and predictability suddenly be jetting to Sardinia for a Roman-themed hootenanny with the Kozlowskis?

The new and luxurious lifestyle was certainly well within Musser’s reach: By the early 1990s, he was safely and quietly very rich. In Robert Frank’s book Richistan, Musser recounts that his net worth at the time he met Hilary was $70 million. The ’90s, Musser and Safeguard had decided, would be the decade of the Internet, and the firm became an internationally renowned incubator of high-tech concerns, with Musser’s Radnor Hotel breakfast meetings spinning off companies like Internet Capital Group and VerticalNet, which saw massive surges in their stock prices. Plugged-in Main Liners were buying and selling ICG stock as fast as rabbits mate, minting ­millions — everyone, that is, except Musser, who never sold stock, and whose holdings in Safeguard and ICG totaled more than $900 million by early 2000. In fact, Musser and Hilary found out that he was a billionaire one day as they lounged at Las Ventanas resort in Mexico, during a phone call back to Diane Swiggard at his office. It was intoxicating, thrilling, unreal-seeming. “Looking back,” Musser says now, rather wryly, “if I had sold 10 or 20 percent, that would have been a smart thing.”

Instead, in 2000 came the crash.

MUSSER’S INTERNET WEALTH vanished especially painfully. He’d borrowed money to buy stock on margin; there was a $26.5 million Safeguard loan to cover his margin calls. In the middle of the financial shitstorm, he and Hilary got married.

“I married him broke,” Hilary points out. “I married him in November; his troubles started in October. We were pretty well under water by Thanksgiving.” She also has a very different take on the mythology of Musser’s close-knit circle. “I think there were less than five people who were there for Pete the whole time,” she says, adding, “It was a very sad time for us, a sad time more for him. To have so many people who seem to adore you, and then realize that they may have adored you for their own reasons … ” They disappeared, she says, when they figured out “you can no longer provide them with a job, or with this and that.”

In 2001, Kozlowski and Tyco CFO Mark Swartz floated Musser a $15 million loan to help him repay part of the Safeguard funds, using the Nantucket place as collateral. But that was a stopgap: There were shareholder lawsuits against both Safeguard and Musser (which were later dismissed). That same year, he stepped down as CEO of the company. “It was discouraging, in that I’d always been so productive,” he says. So he did the only thing he could think to do: He kept going, quietly laying the groundwork for what would be his comeback: the Musser Group. “I certainly never thought he was going to retire,” Hilary says, adding, “As I stood by him while he was on his way up and down at Safeguard, I stood by him at the Musser Group. The first deal he did, he needed money wired within 24 hours. And I was the only one he could turn to, so I put up the money.” That money went to buy Epitome, the software maker.

Hilary sold off the Chester County farmhouse, and both Pete and Hilary weathered a devastating fire at Bonfield and rebuilt it. In ’02 and ’03 the Mussers began resurfacing on the Main Line social circuit, capped by the birth of Cooper in ’03. Pete hardly seemed like a man giving up on the future. In contrast, he and Hilary looked happy together just two months before they split, she in a long pink satin gown at a PAFA anniversary event chatting with Brook and Dawn Lenfest and Don Caldwell, Cooper toddling about in a tiny blue blazer at a Boy Scouts event honoring Musser. But in April 2005 the couple separated, and Hilary left town, her son in tow, to begin a new life in Palm Beach.

“The only reason we split up is because Pete is a bit of a ladies’ man,” she says, sounding rather good-humored as she drops the bombshell. “Oh, she had to get that in there, did she?” responds Musser, with a laugh. (Come to think of it, perhaps we will be seeing Pete making the rounds at Rouge.) Anyway, says Hilary, “It’s not like I chose to split up with him when he was on his way up or down. I didn’t really plan that. I took my marriage vows a little more seriously than that.” Musser acolytes scoff at Hilary’s comments. “She wanted him to be a billionaire, and she pushed that,” says one Main Line observer. “Now she’s got her money and houses, and she’s gone.”

Even though he’s hardly living the life he had with Hilary, Musser still enjoys some of the finer things, such as good wine. He says he’ll spend maybe $30 a bottle, but chooses his pinot noir by the label. “I’ve been buying something with a horse on it,” he offers. He’s no longer a collector. “We did have a wine cellar,” he says. When  asked what happened to the stash of good stuff, he laughs again.

“Hilary took it,” he says with a grin.

“Pete still thinks he’s in the prime of life, which is the beautiful thing about him,” Hilary says of her soon-to-be-ex. “Good for him.” Perhaps deep down, they aren’t so very different — two competitive and driven people with outwardly dissimilar manners. The two are friendly, but not close, these days (Hilary blames Musser’s attorney, Dick Sprague), but she’s hopeful they will be. Like Musser, she’s ready for the divorce to wind up. “It’s been two years,” she says. “Pete has a girlfriend, I’ve met someone,” adding that she is now engaged to be married — if she can get divorced.

FOR HIS PART, Musser has seen his business life, like his personal life, come full circle. “I do have a loan with [Safeguard] for $15 million,” Musser says staunchly, “and I fully expect to repay it.”

Since 2003, Musser has bought stakes in and helped find investors for several companies, including NutriSystem, which was bought out of destitution by a former Safeguard protégé, Mike Hagan, and now ranks as one of the region’s biggest successful-turnaround stories. Musser also recently backed InfoLogix, a digital data company with medical applications for its products, and stacked its board with friends like former Eagles coach Dick Vermeil; along with Vermeil and cable billionaire Gerry Lenfest, he has invested in Sprinturf, an artificial turf company that he believes has potential to carpet thousands of high-school and college fields across the country with bright-green, seasonless faux grass. The latter was a deal he literally crashed into. “He was in his yellow Mustang and he backed into someone’s car at a business function,” says InfoLogix CEO David Gulian, adding that the subsequent conversation became the Sprinturf deal.

Musser’s still swooping in to rescue anyone he knows who’s in trouble, folding anyone who’s lost a job into the Orphanage. Perhaps there’ll be a slot there for Kozlowski, whom Musser visits three or four times a year in prison near Rome, New York. “I’m still friends with Dennis,” he says. “He’s got the poor end of the equation; he’s in jail for something like eight years. I can’t imagine, when you’re a creative, hardworking guy like that.” Does he feel Kozlowski was wrongly convicted? He nods. “If you listen to his description, yes. … He’s a very humble man, not arrogant, always working, and he built a great company. His company’s thriving.” Musser pauses for a moment. “I stand by friends, no matter what.”

This summer, Musser will be hanging with Higgins, Barton and, as often as he can, Cooper, who flies in with his nanny and likes to go to Bertucci’s. He’ll play a couple of hours of tennis a day, field dozens of business proposals, and flirt mildly with the 20-year-old waitresses at the Radnor Hotel. And while he can, he’s still enjoying the gorgeous life at Bonfield, though Hilary just signed an agreement of sale on the place, which was listed at $7.5 million.  

“I would not mind continuing to live there,” Musser says, explaining that the house is in Hilary’s name. Still, he says he can let go of the Italian-pottery-tiled pool and tennis court bubble and billiards room. “As long as you have good health and a good mind, you have everything. I really don’t get that hung up on material things.” He shrugs. “Now if she’d taken my dog — I’d have minded that.”

Who knows? Sprague permitting, maybe he’ll spend some time with Hilary over the summer, too. She says she still sometimes stays at the house with Musser and Cooper. “We met with our lawyers, came back to the house, played a round of tennis,” Hilary says. “I’m obviously much younger and faster, and we tied. The only way I can beat him is if I drop-shot him,” she adds, “which I don’t want to do.”