How David Hoffmann built the business behind his investment in local newspapers

But before he found success as an entrepreneur, he first discovered what he didn't want to do. 

A few years into his career, working for what’s now GATX, a major lessor of rail rolling stock, that became clear. 

 “I had all the administrative functions, human resources and legal, and one of the things I was tasked with as a young guy was delivering the bad news personally when we had a layoff or corporate restructuring.  

 “I just did not enjoy that at all,” he says.  

He still remembers telling a longtime executive that his position was being eliminated.  

"He broke down in tears and said, 'I've got two kids in college. I'm 58 years old. No company's going to hire me. What am I going to do?'

 “I got tired of delivering that news. I just decided, this is not what I want to do. I just didn’t have the stomach for it. I decided to leave that as a career path, and shortly after that I got involved in executive search.”  

He knew very quickly that he’d found the right path. 

“I was very passionate about it,” he says. “I really believed in what I was doing, and I really liked it. I went from delivering bad news to families and executives to only delivering good news. It was great to tell people, ‘Look, you’ve been selected for this job, and it’s going to advance your career, you’re going to make more money.’”  

Hoffmann adds, “I believed I had a unique ability to match talent with what was needed at a company. I’m good at reading people. I also liked that our performance was measurable. You got measured by whether you were successful in achieving the placement. Then you got measured by how successful the executive was in the new role. I was very proud of the fact that the people I placed did very well in their companies, influenced shareholder value, increased head count, and did all the things that great corporate executives do.  

“I’ve always liked being measured.” 

Hoffmann takes another leap 

Perhaps the most fateful change occurred when Hoffmann’s entrepreneurial nature asserted itself.  He took out a second mortgage and stepped away to form his own search firm. Some 30 of his colleagues followed him, and he has never had a reason to look back. 

Thirty-seven years later, DHR Global is thriving.  “It is bigger than ever,” Hoffmann says. “It’s the hallmark, the basis for our success in the private equity world and the private company world, which has grown to a multibillion-dollar private family business.”  

Just how big is the Hoffmann Family of Companies going to get?  

“I think we will end up being the largest family office. We plan to remain private, although we may have public entities within that office, as with Lee, where we’re the controlling shareholders.  

“My two sons, Greg and Geoff, are intellectually very bright, very well educated, and very street smart. I think they have all the requisite skills for the company to continue to grow, at least for the rest of my lifetime. I mean, I don’t know what would stop it. They continue to excel. The company is very profitable and very growth oriented.”  

Hoffmann and his sons meet once a week to talk about real estate and equity acquisitions. They are not looking to buy distressed companies that they can slice and dice. They look for successful private companies that have excellent management and room to grow.   

 Geoff is the CEO of the private equity arm of Hoffmann Family of Companies, overseeing the overall performance and strategic growth of the family office’s portfolio.  

 “We have many people at the table when we are selecting our investments,” Geoff Hoffmann says. “It is a fast-paced and sophisticated process that turns down dramatically more opportunities than it pursues.”  

 Greg is CEO of the real estate arm of HFC, where his role is to drive strategic growth through acquisition and development of real estate. He has led more than $1 billion in real estate acquisitions.  

 Greg Hoffmann said that working with his father on the real-estate side is incredible. “He’s not only my dad. He’s also a phenomenal mentor and business partner. I pinch myself every day that I get to talk to him about business.”  

 “From a very early age,” Geoff Hoffmann says, “our family dinner conversations not only included the standard chatter around the day’s activities, but also the happenings of the economy and our business. There was always an openness and exposure to include us in topics that mattered to the family and the company.  

 “I certainly didn’t expect, nor want, to have anything handed to me for just showing up,” he adds. “My parents instilled in all of us a work ethic that was reflective of the dedication, sacrifice and many long days required to grow a successful enterprise.”   

 ‘No one lost a penny’  

On the subject of corporate culture, Geoff Hoffmann says, “We operate across a lot of different industries, and our businesses can look very different from one another. But walk into any of them, and you’ll find good people, hard work and a genuine commitment to the communities they serve. We’ve found that when employees feel that the company … has a vested interest in their success, the business results inevitably follow.” 

The Hoffmanns are justifiably proud of the fact that The Hoffmann Family of Companies did not shed employees during the COVID-19 crisis. “We had salary deferrals, but they were completely paid back,” David Hoffmann says. “No one lost a penny, and we didn’t lay off anybody. I don’t believe many companies our size can say that.”  

“The truth,” he says, “is that we don’t have a lot of the problems that other companies struggle with. We don’t have much turnover at all. It’s a rarity when somebody leaves. Our CFO, who’s 53 years old, has never worked anywhere else. We have a lot of people that came to us out of college and never left, and we also have a lot of people who have come to us mid-career. We just have a lot of 20-plus, 30-plus year employees.”  

Hoffmann says he has diversified the company to strengthen it.  

“We wanted to create a lasting company. You can name very few companies that have survived 100 years. There just aren’t that many. I wanted to make sure that the company I built would be around long after I’m gone, that my children and grandchildren would have a choice to work there, but most importantly, our employees could depend on the fact that we could withstand any type of downturn event that might happen in a 100-year cycle.  

"We don’t live in fear of recessions, we don’t live in fear of hurricanes, we don’t live in fear of technological change. We’re disciplined about diversifying our base of operation, and we’re very conservative in our capital structure. Lenders and institutions are always surprised with the amount of capital we have on the balance sheet.  

“That’s why I’m so confident we'll be the survivor in the media space with newspapers, because we have the capital structure to do it, the diversification to do it. We’re just not going to let it fail.” 

Sometimes that diversity places difficult demands on Hoffmann’s time. Case in point: a Tuesday morning in June. He was in Buffalo, New York, scheduled to talk with people from the city's business community at 8 a.m. The trouble was, his beloved Florida Everblades had played for the Kelly Cup, the East Coast Hockey League championship, the night before.  

The game went into two overtimes before the Everblades won their fourth championship in the six years Hoffmann has owned the team. Then the congratulatory calls started flooding in and continued well into the small hours of the night.  

But there was Hoffmann at 7:30 sharp, crisp in a black three-button suit, white shirt and tie, discussing the coming meeting with Lee Enterprises CEO Nathan Bekke, Buffalo News Publisher and President Sean Jacobsen, Editor Margaret Kenny and other Lee brass.  

Then Hoffmann spoke for half an hour and took questions for another hour. He had the advantage of knowing several of the Buffalo business leaders, many of them spend time during the winter in Florida, some in Naples where Hoffmann lives.   

Also present was John McCarron, Hoffmann’s portfolio manager, looking just as dapper and just as pleased as his boss, for good reason. McCarron played several years for the Everblades, who retired his number.  

“The players and the coaches loved Dave,” McCarron says. “Their base pay may have been nominal, but when you figured in all the perks he provided, it was way better than any other team in the league. And the coaches — they get paid more like NHL coaches.”  

After McCarron was done playing, Hoffmann, knowing of his Cornell education in finance, said, “Come to work for me.”  

“It is never dull,” McCarron says of the fast-growing company. “I love this job.”  

Hoffmann has just closed the deal to take ownership of a considerably larger hockey franchise — the NHL’s Pittsburgh Penguins. Some estimate the purchase price at around $1.7 billion.  

In a piece announcing the Penguins’ acquisition, The Naples Daily News opined, “Rest assured, though, Pittsburgh fans: If the Hoffmanns run the Penguins anything like they run the Everblades, the franchise will be both an on-ice force and a continued point of community pride.”