Associated Capital Group, Inc.’s Investment in Gabelli Value Plus+ Trust
June 15 2020 - 3:35AM
Business Wire
Associated Capital Group, Inc. (“AC” or the “Company”) announces
a scheduled meeting of its Board of Directors on June 29, 2020 to
discuss the Company’s investment in the Gabelli Value Plus+ Trust
(“GVP” or the “Trust”). This meeting has been organized in response
to the GVP Board’s request, as it prepares for the proposed
Continuation Vote planned at GVP’s forthcoming Annual General
Meeting.
AC invested in the initial public offering of GVP on the London
Stock Exchange in February of 2015 and has been supportive of its
mandate and structure; AC recently announced additional share
purchases in the open market. AC and its affiliates including Mario
Gabelli, the Company’s Chairman, hold approximately 27.8% of the
share count as of its most recent filing. As a UK PLC operating as
an investment trust, GVP delivers a differentiated long term
investment for AC’s value oriented portfolio.
The Trust brings the U.K. market the Gabelli time-tested Private
Market with a CatalystTM methodology in a concentrated and active
U.S. event-driven value portfolio with a preference towards smaller
companies. Reflective of the Gabelli organization’s deep bottom-up
research capabilities, the Trust uniquely maintains a significant
concentration in many ‘less liquid’ small and micro-cap holdings,
coupled with announced merger and other special situation
investments oriented toward generating total returns. Associated
Capital views this investment trust vehicle as an attractive
closed-ended structure, owing to the London Stock Exchange’s
established and historical market structure and favorable company
rules.
In previous communications with the GVP Board, Associated
Capital had voiced its support for measures which it believed would
have served to enhance shareholder value and effectively provide
temporary liquidity during supply/demand imbalances when reflected
in the Trust’s share price discount to NAV. AC has been, and
continues to remain, supportive of an active share buyback policy.
This policy was highly effective when in place from the IPO through
the second quarter of 2019. The policy was halted in June of 2019,
accommodating other interests and absent in temporarily supporting
imbalances. AC had also proposed other initiatives to the GVP
Board, including a 5% per annum distribution policy.
Based upon a review of publicly available ownership information,
AC believes one local and one international activist entity might
own approximately 30% of GVP on a combined basis and might be
acting in concert with one another. These coordinated efforts
appear to be seeking short term gains by anticipating a possible
liquidation and wind up of GVP, which is contrary to the long term
objectives of the Trust.
As a unique exchange traded investment product, the U.K.
investment trust is well suited for many shareholders, including
Associated Capital. The purpose of the AC Board of Directors
meeting scheduled for June 29, 2020 is to conclude whether current
dynamics at GVP dilute the long term investment benefits of the GVP
value strategy. AC’s Board may decide to accelerate buying
businesses and redeploy assets, even from investments such as GVP,
which provide what Warren Buffett cherishes – compounded, long-term
gains.
About Associated Capital Group, Inc.
Associated Capital, based in Greenwich Connecticut, is a
diversified global financial services company that provides
alternative investment management through Gabelli & Company
Investment Advisers, Inc. (“GCIA” f/k/a Gabelli Securities, Inc.).
We have also earmarked proprietary capital for our direct
investment business that invests in new and existing businesses.
The direct investment business is developing along three core
pillars: Gabelli Private Equity Partners, LLC (“GPEP”), formed in
August 2017 with $150 million of authorized capital as a
“fund-less” sponsor; the SPAC business (Gabelli special purpose
acquisition vehicles), launched in April 2018; and Gabelli
Principal Strategies Group, LLC (“GPS”) created to pursue strategic
operating initiatives.
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Kevin Handwerker General Counsel +1 (203) 629-9595
Associated Capital (NYSE:AC)
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