At a Glance
Not well known
"Small boutique, great performance"
"A little loose with the law"
As of August 2005, the firm formerly known as Gabelli Asset Management Inc. became GAMCO Investors, Inc. Company executives said the new name "is a more inclusive parent company name, and more appropriately represents the various investment strategies and asset management brands contributing to the continued growth of our company." Operating under a new moniker, GAMCO's strategy remained unchanged: perform intensive research to find and then invest in undervalued companies that are likely to reach their intrinsic value over time.
As of June 2009, GAMCO had $21.4 billion in assets under management in partnerships, mutual funds, closed end funds and private advisory accounts. The company operates principally through three subsidiaries: GAMCO Asset Management Inc., which manages private advisory accounts; Gabelli Funds, which handles mutual funds and closed-end funds; and Gabelli Securities, Inc., through which the company serves as a general partner or investment manager in a number of limited partnerships with varying investment objectives.
In addition to the value-oriented investment strategy, GAMCO has developed a diversified product mix to serve the financial objectives of a broad range of investors. The company's investment services are primarily offered through its subsidiary, GAMCO Asset Management Inc., which manages separate accounts for high-net-worth individuals, institutions and qualified pension plans, as well as through the company's role as advisor to a family of mutual funds.
One defining feature of the company is its high-profile founder and CEO, Mario Gabelli. A Chartered Financial Analyst and Columbia University MBA grad, Gabelli is a self-taught stock picker who, in an interview with Investors Business Daily, recounted that he learned the stock market as a 16-year-old caddie at a White Plains, N.Y., golf course. Gabelli spent several years working as an analyst in the industry before founding his eponymous firm in 1977, during a time when money managers and research firms were struggling due to changes in the industry. Gabelli credits his company's success to meticulous research techniques, based on applying Graham & Dodd's principles to the analysis of domestic, cash-generating, franchise companies in a wide range of industries.
The terms of GAMCO's $105 million IPO in 1999 allowed Gabelli to retain control of 80 percent of the firm's equity and 97.6 percent of the firm's voting power. Additionally, he reportedly receives 10 percent of the firm's pre-tax profits, plus portfolio management fees. In 2002, he took home $37 million in cash when the firm's net income was $53.3 million. Today, Gabelli owns about 72 percent of the company.
Despite his wealth, Mario Gabelli cannot seem to find his way out of trouble. In March 2006, the U.S. government said it would join a civil fraud lawsuit against Gabelli, which claims that Lynch Interactive Corporation, for which Mario Gabelli served as Chairman, created sham companies to bid for cell phone licenses at a series of Federal Communications Commission auctions between 1995 and 2000. Initially, Gabelli vowed to fight the charges, but by June of 2006, he agreed to settle. Specific terms of the deal were not disclosed, but the business press speculated that Gabelli's settlement payments to the government could top $100 million. Although GAMCO Investors was not named in the cell phone suit, it's unlikely to go unscathed by its leaders actions. "All of GAMCO is predicated on Mario Gabelli's personality, persona and reputation,'' Rachel Barnard, an analyst with Morningstar, told Bloomberg. "These settlements help in the sense that it gets him out of the news, but in terms of reputation, the damage cannot be undone."
The cell phone settlement came just a few weeks after Gabelli settled an unrelated lawsuit brought against him by two of his earliest investors. Frederick Mancheski and David Perlmutter sued in 2003 to dissolve Gabelli Group Capital Partners, Inc. (a privately held company) because it didn't allow them to sell their restricted shares. Under the settlement, Mancheski received two million GAMCO shares, making him the largest individual stockholder.
In October 2003, GAMCO received what many of its peers in the mutual fund industry had been steadily receiving since 2003: a subpoena from the government. The New York Attorney General's office requested information from the firm relating to improper fund-share trading. Shortly thereafter, GAMCO acknowledged that it allowed one client to engage in short-term trading of one of its mutual funds even after other investors had been banned for similar practices (a practice widely known as market timing, or the rapid trading of mutual fund shares to take advantage of gaps between the fund's share price and the current value of its holdings). The SEC also subpoenaed the firm for information in October 2004.
One Corporate Center
Rye, NY 10580-1422
Phone: (800) 422-3554
Employer Type: Public
Stock Symbol: GBL
Stock Exchange: NYSE
Chairman & CEO: Mario J. Gabelli
2007 Employees (All Locations): 211