Portfolio Overview

We are research-driven fundamental investors focusing on the “PMV with a catalyst” method of investing. This process, developed at Gabelli, is an extension of the value investing principles articulated by Graham and Dodd in 1934. This philosophy is utilized within all of our hedge fund portfolios.

This method of analysis involves looking at businesses as a function of their assets and earnings power. We examine businesses as if we were owners of those businesses, and we believe that we can do that in a rational way by looking at industries on a global basis. Our investment professionals visit with hundreds of companies each year. Our work is proprietary, bottom up, and involves the full utilization of public resources.

In this process, we do sector-by-sector analysis, assessing the PMV of a business, and identifying the catalyst in place to realize returns. A company’s PMV is not constant, and changes as a function of many variables. The objective is to identify large differences between our estimate of PMV and the stock market price. We then identify the catalyst to realize a return with minimal influence from the overall direction of the stock market. It is our belief that we can earn superior risk adjusted returns following this event-driven approach.

These events may be industry specific, such as a new technology; regulatory, such as changes in accounting rules; or may be company specific, and include:

  • Financial Engineering
  • Spin-offs
  • Restructurings
  • Workouts
  • Liquidations
  • Stubs
  • Arbitrage

Our portfolios offer the broad spectrum of catalyst-driven value investing. Our alternative investment group is a specialized investment division within Gabelli, utilizing the full resources of the organization, while maintaining its independence and flexibility.

Merger Arbitrage:
  • Invests primarily in announced deals
  • Seeks to avoid overall market risk and correlation
  • Strategic buyers
  • Industries we know well
  • Positions increase over time as hurdles are crossed
  • Low volatility historically
Event Driven:
  • Equity event-driven strategy/special situations
  • Seeks to avoid overall market risk and correlation
  • Valuation oriented, fundamentally research-driven
  • Take positions utilizing Gabelli’s proprietary research
  • Focus on stock selection across all sectors and capitalizations
  • Long-short/emphasize event-driven opportunities to maximize returns
  • Derive exposures as a by-product of stock selection process
  • Apply top-down analysis seeking to moderate portfolio risk
*****
*****
*****
*****
*****
*****
*****
*****
*****
*****
*****
*****
*****
*****