David Hodge, CFA, CFP
Gimbal Capital Management
Tell the story of GCM, how it was founded & how it became a family business.
Gimbal Capital Management was founded in 1994 by Dan McAdams to provide investment management services to families in West Michigan. Dan got his start in West Michigan as a commercial lender at Old Kent Bank in the late 1970s, and spent time as the controller of a beef processing company in the early 1980s.
When one of his banking clients developed and sold a large industrial parcel, Dan started working as the Chief Investment Officer of his family office. This gave Dan the experience to see how challenging it could be for families to coordinate their investments with their operating business and generational succession.
Dan founded Gimbal Capital Management to implement his vision of providing best-in-class investment services to families in West Michigan, and his first client was the family with whom he had worked. The business grew rapidly, and in 2003 Dave Hodge, Dan’s nephew, approached Dan to ask him how to start a hedge fund. Dan knew that he could trust Dave and thought he would be a good fit for the business, so in 2004, Dan hired Dave and Gimbal Capital Management became a family business.
What is the most rewarding aspect of being part of a family business?
Investment management is a business that works in and delivers, an intangible product. As a result, quality can be very difficult to gauge, and results are not immediately obvious. In this type of business, trust is extremely important, and the natural bonds formed in families can create the basis for an excellent working relationship.
In addition to helping us work together well, mixing business and family has worked to bring our families closer together. With an uncle-nephew relationship, after the next generation grows up, it can be difficult to keep close family ties, particularly after kids grow up and have kids of their own. Working together means that you live together during the workday, and this keeps our family closer than it would be without the business.
How have you managed to grow and maintain good family relationships?
Good family relationships stem from quality communication. This starts with respect and trust, and by being in a family business, we know that we have to treat each other well, because we’ll be seeing a lot of each other!
In addition, we work hard to maintain openness in our communication. We don’t assume how each other thinks about decisions, and we talk freely about the things we think are important. We don’t think you can have open communication without respect and trust, but just having respect & trust doesn’t mean that you will automatically have openness in your communication. We work on this and make sure to take each others’ thoughts into account before making big decisions.
How has being a family business helped you attract top talent?
In the investment business, the quality of service depends entirely on the people you are dealing with. The value of the business is almost entirely intangible, so business succession and continuity is a point of major importance with our customers and employees. Family involvement assures that our business will thrive for decades to come, and this commitment on the part of our family inspires confidence among our clients and employees.
Talk about your experience as a member of the FBA, how it has helped, what value you’ve gained, and your involvement.
When we first joined the FBA, we quickly learned that the events were filled top-notch, relevant content. The events alone were worth the price of admission to be a member of the FBA, but what added the most value to our experience was when Dave joined NextGen group #11. Being able to interact with peers on a monthly basis and standing shoulders together going through family business transitions was a huge help to enabling a successful transition in our business, and giving Dave the confidence that he needed to step up into new leadership roles.