Gamco announces $60 million investment
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- October
- 6
A private investment company controlled by Microsoft founder Bill Gates agreed to make a $60 million investment in Rye-based investment company Gamco Investors Inc.
As a result of the investment, Gates’ Cascade Investment LLC will own 18.9 percent of Gamco’s Class A common stock, up from a current stake of 10.4 percent.
Gamco, which is run by famed money manager Mario Gabelli, manages accounts for investors and operates a family of mutual funds.
It hasn’t been an easy year for Gamco as the investment industry feels the effects of the worsening credit crisis and a 29 percent decline in the S&P 500 index this year.
Earnings at Gamco dropped nearly 20 percent during the second quarter. Assets under management fell 7.5 percent to $28.3 billion at the end of the quarter.
In outlining the details of the investment, Gamco said it agreed to sell a $60 million convertible note in a private placement transaction to Cascade. The ten-year note, which pays interest at 6.5 percent, is convertible into Gamco Class A common stock at $70 per share.
“This investment together with our significant existing financial resources provides broad flexibility in pursuing our growth initiatives,†Gabelli said.
Karl Otto Pohl, director emeritus of Gamco, added: “This investment, coupled with other options we are pursuing, are expected to greatly augment Gamco’s financial strength at a time when we are examining a variety of initiatives, including some in Europe. They range from investments in our proprietary hedge funds, to seeding our own fund of funds, joint ventures, and affiliations.â€
Shares of Gamco climbed $6.82 to $55.12 in trading today on the New York Stock Exchange.
This entry was posted
on Monday, October 6th, 2008 at 12:53 pm by Jay Loomis.
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