Closed-End Fund Gabelli Equity Trust Offers High Income with Equity Exposure at a Steep Price

The Gabelli Equity Trust (GAB) is a closed-end fund that offers high income while retaining equity exposure. However, it is considered expensive. The fund's lack of tech exposure is seen as a positive aspect, but investors should weigh this against the high cost. GAB may be suitable for investors seeking income and equity exposure, but they should carefully consider the expense.

Associated Capital Group, Inc. (AC) reported its financial results for the first quarter of 2025, revealing a mixed performance with both positive and negative aspects. The company's Merger Arbitrage strategy showed strong performance, with a gross return of 3.8% before expenses and 2.8% after expenses [1]. However, the company faced significant operational challenges, including a decrease in total revenues and a substantial increase in operating losses.

Financial Highlights

- Assets Under Management (AUM) increased to $1.27 billion, up from $1.25 billion at the end of 2024, reflecting a positive market appreciation and a resilient investment strategy despite net outflows [1].
- Book value per share rose to $42.51 from $42.14, suggesting an improvement in the company's financial health and shareholder value [1].
- Total revenues declined to $2.1 million compared to $3.0 million a year earlier, driven by lower AUM and increased operating expenses [1].
- Operating loss before management fee increased significantly from $(2,988) thousand in Q1 2024 to $(4,185) thousand in Q1 2025, indicating worsening operational performance [1].
- Net income was $7.67 million, resulting in a net income of $0.36 per share [1].
- Dividend declared by the Board of Directors was $0.10 per share, payable on June 26, 2025 [1].

Leadership Changes

Doug Jamieson retired as CEO, and Patrick Huvane was named Interim Chief Executive Officer following his retirement [1]. Mr. Huvane expressed optimism about the company's prospects and his commitment to serving AC shareholders.

M&A Activity

Global M&A activity for the first quarter of 2025 totaled $890 billion, an increase of 15% compared to the first quarter of 2024. Technology was the most active sector with $165 billion, followed by Financials and Energy & Power [1].

Investor Activity

Hedge funds have shown mixed interest in AC. Some institutional investors added shares to their portfolios, while others decreased their positions. Notable recent moves include Horizon Kinetics Asset Management LLC removing 57,498 shares from its portfolio and UBS Group AG adding 8,114 shares [1].

Conclusion

Associated Capital Group reported a mixed bag of results for the first quarter of 2025. While the Merger Arbitrage strategy performed well, the company faced significant operational challenges, including a decrease in total revenues and a substantial increase in operating losses. The appointment of a new interim CEO and the strong performance of the Merger Arbitrage strategy may provide a positive outlook for the company. However, investors should carefully consider the company's financial health and operational performance before making investment decisions.

References

[1] https://www.nasdaq.com/articles/associated-capital-group-inc-reports-first-quarter-2025-financial-results-and-leadership