UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21969
---------
The Gabelli Global Deal Fund
--------------------------------------------------------
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
----------------------------------------------------
(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
---------------
Date of fiscal year end: December 31
------------
Date of reporting period: December 31, 2007
------------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
[LOGO]
THE GABELLI
GLOBAL DEAL
FUND
THE GABELLI GLOBAL DEAL FUND
Annual Report
December 31, 2007
TO OUR SHAREHOLDERS,
The Sarbanes-Oxley Act requires a fund's principal executive and financial
officers to certify the entire contents of the semi-annual and annual
shareholder reports in a filing with the Securities and Exchange Commission on
Form N-CSR. This certification would cover the portfolio manager's commentary
and subjective opinions if they are attached to or a part of the financial
statements. Many of these comments and opinions would be difficult or impossible
to certify.
Because we do not want our portfolio managers to eliminate their opinions
and/or restrict their commentary to historical facts, we have separated their
commentary from the financial statements and investment portfolio and have sent
it to you separately. Both the commentary and the financial statements,
including the portfolio of investments, will be available on our website at
www.gabelli.com.
Enclosed are the audited financial statements and the investment portfolio
as of December 31, 2007.
COMPARATIVE RESULTS
--------------------------------------------------------------------------------
RETURNS THROUGH DECEMBER 31, 2007 (a)
-------------------------------------
Since
Inception
Quarter (01/31/07)
------- ----------
GABELLI GLOBAL DEAL FUND
NAV TOTAL RETURN (b) ............................. (1.06)% 3.35%
INVESTMENT TOTAL RETURN (c) ...................... (4.50) (14.55)
3 Month U.S. Treasury Bill Index .................... 1.05 4.59
S&P 500 Index ....................................... (3.33) 3.92
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
INVESTMENT RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE. WHEN SHARES ARE SOLD, THEY MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT
ANNUALIZED. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE
PERFORMANCE DATA PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE
INFORMATION AS OF THE MOST RECENT MONTH END. INVESTORS SHOULD CAREFULLY
CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE
FUND BEFORE INVESTING. THE 3 MONTH U.S. TREASURY BILL INDEX IS COMPRISED
OF A SINGLE ISSUE PURCHASED AT THE BEGINNING OF THE MONTH AND HELD FOR A
FULL MONTH. AT THE END OF THE MONTH, THAT ISSUE IS SOLD AND ROLLED INTO
THE OUTSTANDING TREASURY BILL THAT MATURES CLOSEST TO, BUT NOT BEYOND
THREE MONTHS FROM THE RE-BALANCING DATE. TO QUALIFY FOR SELECTION, AN
ISSUE MUST HAVE SETTLED ON OR BEFORE THE RE-BALANCING (MONTH END) DATE.
THE S&P 500 INDEX IS AN UNMANAGED INDICATOR OF STOCK MARKET PERFORMANCE.
DIVIDENDS ARE CONSIDERED REINVESTED EXCEPT FOR THE 3 MONTH U.S. TREASURY
BILL INDEX. YOU CANNOT INVEST DIRECTLY IN AN INDEX.
(b) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN THE NET ASSET
VALUE ("NAV") PER SHARE AND REINVESTMENT OF DISTRIBUTIONS AT NAV ON THE
EX-DIVIDEND DATE AND ARE NET OF EXPENSES. SINCE INCEPTION RETURN IS BASED
ON AN INITIAL NAV OF $19.06.
(c) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN CLOSING MARKET
VALUES ON THE NEW YORK STOCK EXCHANGE AND REINVESTMENT OF DISTRIBUTIONS.
SINCE INCEPTION RETURN IS BASED ON AN INITIAL OFFERING PRICE OF $20.00.
--------------------------------------------------------------------------------
Sincerely yours,
/s/ Bruce N. Alpert
Bruce N. Alpert
President
February 22, 2008
THE GABELLI GLOBAL DEAL FUND
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total
investments as of December 31, 2007:
U.S. Government Obligations ......................................... 34.7%
Health Care ......................................................... 12.3%
Energy and Utilities ................................................ 8.7%
Computer Software and Services ...................................... 7.1%
Wireless Communications ............................................. 5.1%
Consumer Products ................................................... 5.0%
Media ............................................................... 4.1%
Telecommunications .................................................. 3.7%
Building and Construction ........................................... 3.1%
Hotels and Gaming ................................................... 2.8%
Specialty Chemicals ................................................. 2.4%
Financial Services .................................................. 2.1%
Diversified Industrial .............................................. 2.1%
Business Services ................................................... 1.2%
Equipment and Supplies .............................................. 1.1%
Consumer Services ................................................... 1.1%
Food and Beverage ................................................... 0.7%
Electronics ......................................................... 0.6%
Metals and Mining ................................................... 0.6%
Semiconductors ...................................................... 0.5%
Cable and Satellite ................................................. 0.5%
Machinery ........................................................... 0.2%
Retail .............................................................. 0.2%
Communications Equipment ............................................ 0.1%
Environmental Services .............................................. 0.0%
Automotive .......................................................... 0.0%
Materials ........................................................... 0.0%
Transportation ...................................................... 0.0%
Agriculture ......................................................... 0.0%
Computer Hardware ................................................... 0.0%
Broadcasting ........................................................ 0.0%
-----
100.0%
=====
THE GABELLI GLOBAL DEAL FUND (THE "FUND") FILES A COMPLETE SCHEDULE OF
PORTFOLIO HOLDINGS WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") FOR
THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q, THE LAST OF WHICH
WAS FILED FOR THE QUARTER ENDED SEPTEMBER 30, 2007. SHAREHOLDERS MAY OBTAIN THIS
INFORMATION AT WWW.GABELLI.COM OR BY CALLING THE FUND AT 800-GABELLI
(800-422-3554). THE FUND'S FORM N-Q IS AVAILABLE ON THE SEC'S WEBSITE AT
WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE SEC'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330.
PROXY VOTING
The Fund files Form N-PX with its complete proxy voting record for the 12
months ended June 30th, no later than August 31st of each year. A description of
the Fund's proxy voting policies, procedures, and how the Fund voted proxies
relating to portfolio securities is available without charge, upon request, by
(i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One
Corporate Center, Rye, NY 10580-1422; and (iii) visiting the SEC's website at
www.sec.gov.
2
THE GABELLI GLOBAL DEAL FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
MARKET
SHARES COST VALUE
------------ -------------- --------------
COMMON STOCKS -- 65.3%
AGRICULTURE -- 0.0%
1,000 Provimi SA ..................... $ 46,580 $ 27,048
-------------- --------------
AUTOMOTIVE -- 0.0%
6,000 Lear Corp.+ .................... 180,593 165,960
-------------- --------------
BROADCASTING -- 0.0%
1,000 Cumulus Media Inc., Cl. A+ ..... 11,045 8,040
-------------- --------------
BUILDING AND CONSTRUCTION -- 3.1%
5,000 Goodman Global Inc.+ ........... 124,128 122,700
25,000 Hagemeyer NV ................... 161,135 171,060
125,000 The Genlyte Group Inc.+ ........ 11,793,577 11,900,000
-------------- --------------
12,078,840 12,193,760
-------------- --------------
BUSINESS SERVICES -- 1.2%
4,000 Acxiom Corp. ................... 84,020 46,920
2,000 Electronic Clearing
House Inc.+ .................. 33,190 33,220
5,000 Emergis Inc.+ .................. 41,157 41,542
150,000 First Consulting Group Inc.+ ... 1,934,712 1,939,500
157,000 PHH Corp.+ ..................... 4,222,118 2,769,480
25,000 Securitas Direct AB, Cl. B+ .... 104,760 100,183
1,500 United Rentals Inc.+ ........... 39,251 27,540
-------------- --------------
6,459,208 4,958,385
-------------- --------------
CABLE AND SATELLITE -- 0.5%
30,000 EchoStar Communications
Corp., Cl. A+ ................ 1,116,719 1,131,600
38,001 PT Multimedia Servicos de
Telecomunicacoes e
Multimedia SGPS SA ........... 373,550 530,593
5,000 Sogecable SA+ .................. 197,461 200,301
-------------- --------------
1,687,730 1,862,494
-------------- --------------
COMMUNICATIONS EQUIPMENT -- 0.1%
6,309 CommScope Inc.+ ................ 311,266 310,446
-------------- --------------
COMPUTER HARDWARE -- 0.0%
1,000 Printronix Inc. ................ 15,595 15,850
-------------- --------------
COMPUTER SOFTWARE AND SERVICES -- 7.1%
7,500 Affiliated Computer
Services Inc., Cl. A+ ........ 375,849 338,250
300,000 BEA Systems Inc.+ .............. 5,067,559 4,734,000
75,000 Business Objects SA+ ........... 4,582,560 4,583,534
2,000 Business Objects SA, ADR+ ...... 114,790 121,800
200,000 Cognos Inc.+ ................... 11,445,246 11,514,000
6,000 Jupitermedia Corp.+ ............ 41,409 22,920
90,000 NAVTEQ Corp.+ .................. 6,853,600 6,804,000
5,000 Netmanage Inc.+ ................ 33,330 30,200
-------------- --------------
28,514,343 28,148,704
-------------- --------------
CONSUMER PRODUCTS -- 5.0%
250,000 Altadis SA ..................... 17,064,795 18,169,657
24,000 Harman International
Industries Inc. .............. 2,935,295 1,769,040
-------------- --------------
20,000,090 19,938,697
-------------- --------------
CONSUMER SERVICES -- 1.1%
105,000 Tele Atlas NV+ ................. 4,518,125 4,321,461
-------------- --------------
DIVERSIFIED INDUSTRIAL -- 2.1%
570,000 Myers Industries Inc. .......... 12,633,928 8,247,900
-------------- --------------
MARKET
SHARES COST VALUE
------------ -------------- --------------
ELECTRONICS -- 0.6%
211,700 Alliance Semiconductor Corp. ... $ 1,050,065 $ 338,720
60,000 Bel Fuse Inc., Cl. A ........... 2,258,239 2,069,400
15,000 Genesis Microchip Inc.+ ........ 127,275 128,550
-------------- --------------
3,435,579 2,536,670
-------------- --------------
ENERGY AND UTILITIES -- 8.7%
2,000,000 Aquila Inc.+ ................... 8,311,809 7,460,000
235,000 Endesa SA ...................... 12,404,976 12,489,217
30,000 Energy East Corp. .............. 813,846 816,300
100,000 Grant Prideco Inc.+ ............ 5,391,570 5,551,000
85,000 NorthWestern Corp. ............. 2,677,535 2,507,500
30,000 PrimeWest Energy Trust ......... 838,084 818,279
175,000 Puget Energy Inc. .............. 4,900,670 4,800,250
50,000 WesternZagros
Resources Ltd.+ .............. 183,304 121,587
-------------- --------------
35,521,794 34,564,133
-------------- --------------
ENTERTAINMENT -- 0.0%
300 Penn National Gaming Inc.+ ..... 17,971 17,865
-------------- --------------
ENVIRONMENTAL SERVICES -- 0.0%
5,000 Waste Industries USA Inc. ...... 178,926 181,500
-------------- --------------
EQUIPMENT AND SUPPLIES -- 1.1%
100,000 Trane Inc. ..................... 4,556,686 4,671,000
-------------- --------------
FINANCIAL SERVICES -- 2.1%
100,000 Alfa Corp. ..................... 2,162,138 2,167,000
6,000 Asset Acceptance
Capital Corp. ................ 113,430 62,460
5,000 Banco BPI SA ................... 42,724 39,183
4,000 Commerce Bancorp Inc. .......... 150,771 152,560
1,000 First Indiana Corp. ............ 31,305 32,000
120,000 SLM Corp. ...................... 5,269,857 2,416,800
35,000 The Midland Co. ................ 2,219,556 2,264,150
30,000 Wachovia Corp. ................. 1,402,135 1,140,900
-------------- --------------
11,391,916 8,275,053
-------------- --------------
FOOD AND BEVERAGE -- 0.7%
10,000 Bull-Dog Sauce Co. Ltd. ........ 31,857 19,693
18,000 Grolsch NV, CVA ................ 1,266,148 1,260,055
202,000 Katokichi Co. Ltd. ............. 1,278,720 1,262,105
6,000 Reddy Ice Holdings Inc. ........ 180,740 151,860
-------------- --------------
2,757,465 2,693,713
-------------- --------------
HEALTH CARE -- 12.3%
100,000 Adams Respiratory
Therapeutics Inc.+ ........... 5,919,285 5,974,000
125,000 Aspreva
Pharmaceuticals Corp.+ ....... 3,203,306 3,250,000
5,000 Axcan Pharma Inc.+ ............. 112,775 115,000
5,000 Bradley Pharmaceuticals Inc.+ .. 98,655 98,500
500,000 Coley Pharmaceutical
Group Inc.+ .................. 3,964,452 4,000,000
30,000 E-Z-Em-Inc.+ ................... 617,985 621,900
300,000 MGI Pharma Inc.+ ............... 12,026,826 12,159,000
66,000 Pharmion Corp.+ ................ 4,237,324 4,148,760
200 Radiation Therapy
Services Inc.+ ............... 6,197 6,182
150,000 Respironics Inc.+ .............. 9,815,889 9,822,000
200,000 Sierra Health Services Inc.+ ... 8,360,938 8,392,000
3,000 Ventana Medical Systems Inc.+ .. 230,504 261,690
2,000 Visicu Inc.+ ................... 23,510 23,740
-------------- --------------
48,617,646 48,872,772
-------------- --------------
See accompanying notes to financial statements.
3
THE GABELLI GLOBAL DEAL FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2007
MARKET
SHARES COST VALUE
------------ -------------- --------------
COMMON STOCKS (CONTINUED)
HOTELS AND GAMING -- 2.8%
125,000 Harrah's Entertainment Inc. .... $ 10,780,811 $ 11,093,750
-------------- --------------
MACHINERY -- 0.2%
10,000 Stork NV ....................... 698,108 703,247
-------------- --------------
MATERIALS -- 0.0%
12,500 Intertape Polymer Group Inc.+ .. 58,500 39,250
-------------- --------------
MEDIA -- 4.1%
100,000 APN News & Media Ltd. .......... 469,655 462,731
330,000 Cablevision Systems Corp.,
Cl. A+ ....................... 11,300,471 8,085,000
230,000 Clear Channel
Communications Inc. .......... 8,371,712 7,939,600
-------------- --------------
20,141,838 16,487,331
-------------- --------------
METALS AND MINING -- 0.6%
3,000 Arizona Star Resource Corp.+ ... 53,453 54,258
73,700 Claymont Steel
Holdings Inc.+ ............... 1,721,348 1,720,895
1,000 Cumerio NV/SA .................. 40,067 41,683
5,000 Gloucester Coal Ltd. ........... 20,075 28,976
20,000 Jubilee Mines NL ............... 396,041 398,282
16,000 Uranium One Inc.+ .............. 205,440 143,148
-------------- --------------
2,436,424 2,387,242
-------------- --------------
RETAIL -- 0.2%
3,120 AOKI Holdings Inc. ............. 53,770 54,907
14,500 Genesco Inc.+ .................. 768,962 548,100
-------------- --------------
822,732 603,007
-------------- --------------
SEMICONDUCTORS -- 0.5%
107,600 Nextest Systems Corp.+ ......... 2,121,532 2,140,164
-------------- --------------
SPECIALTY CHEMICALS -- 2.4%
320 Mitsubishi Chemical
Holdings Corp. ............... 2,566 2,458
250,000 UAP Holding Corp. .............. 9,571,862 9,650,000
-------------- --------------
9,574,428 9,652,458
-------------- --------------
TELECOMMUNICATIONS -- 3.7%
100,000 Asia Satellite
Telecommunications
Holdings Ltd., ADR ........... 2,244,548 1,860,000
90,000 Golden Telecom Inc.+ ........... 9,307,842 9,085,500
1,000 Neuf Cegetel ................... 50,717 50,587
300,000 Portugal Telecom SGPS SA ....... 3,972,980 3,916,839
-------------- --------------
15,576,087 14,912,926
-------------- --------------
TRANSPORTATION -- 0.0%
2,000 Midwest Air Group Inc.+ 28,990 29,600
-------------- --------------
WIRELESS COMMUNICATIONS -- 5.1%
280,000 Rural Cellular Corp., Cl. A+ 12,258,390 12,345,200
300,000 SunCom Wireless
Holdings Inc., Cl. A+ ........ 7,743,945 8,004,000
-------------- --------------
20,002,335 20,349,200
-------------- --------------
TOTAL COMMON
STOCKS ....................... 275,177,111 260,409,626
-------------- --------------
MARKET
SHARES COST VALUE
------------ -------------- --------------
WARRANTS -- 0.0%
ENERGY AND UTILITIES -- 0.0%
4,000 WesternZagros Resources Ltd.,
expire 01/18/08+ ............. $ 6,284 $ 608
-------------- --------------
PRINCIPAL
AMOUNT
------------
U.S. GOVERNMENT OBLIGATIONS -- 34.7%
U.S. TREASURY BILLS -- 28.7%
$115,356,000 U.S. Treasury Bills,
2.487% to 3.611%++,
01/10/08 to 06/05/08 ......... 114,366,741 114,312,141
-------------- --------------
U.S. TREASURY NOTES -- 6.0%
23,685,000 U.S. Treasury Note,
4.625%, 03/31/08 ............. 23,720,664 23,771,971
-------------- --------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS .................. 138,087,405 138,084,112
-------------- --------------
TOTAL INVESTMENTS -- 100.0% ................... $ 413,270,800 398,494,346
==============
SECURITIES SOLD SHORT
(Proceeds received $305,054) ................ (310,417)
FORWARD FOREIGN EXCHANGE CONTRACTS
(Unrealized depreciation) ................... (84,362)
OTHER ASSETS AND LIABILITIES (NET) ............ (4,082,540)
--------------
NET ASSETS -- COMMON SHARES
(21,300,610 common shares outstanding) ....... $ 394,017,027
==============
NET ASSET VALUE PER COMMON SHARE
($394,017,027 / 21,300,610 shares outstanding) $ 18.50
==============
MARKET
SHARES PROCEEDS VALUE
------------ -------------- --------------
SECURITIES SOLD SHORT -- (0.1)%
COMMUNICATIONS
EQUIPMENT -- (0.1)%
6,308 CommScope Inc.+ ................ $ 305,054 $ 310,417
PRINCIPAL SETTLEMENT UNREALIZED
AMOUNT DATE DEPRECIATION
------------ -------------- --------------
FORWARD FOREIGN EXCHANGE
CONTRACTS -- (0.0)%
$ 8,117,671(a) Deliver Euros in exchange
for USD11,784,098 ............ 01/31/08 $ (84,362)
==============
----------
(a) Principal amount denoted in Euros.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depository Receipt
% OF
MARKET MARKET
VALUE VALUE
------ --------------
GEOGRAPHIC DIVERSIFICATION
United States ................................. 80.9% $ 322,495,575
Europe ........................................ 14.0 55,811,948
Canada ........................................ 4.1 16,097,671
Asia/Pacific .................................. 0.7 2,749,990
Japan ......................................... 0.3 1,339,162
------ --------------
100.0% $ 398,494,346
====== ==============
See accompanying notes to financial statements.
4
THE GABELLI GLOBAL DEAL FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2007
ASSETS:
Investments, at value (cost $413,270,800) .................. $ 398,494,346
Foreign currency, at value (cost $515,175) ................. 515,321
Deposit at broker .......................................... 305,054
Receivable for investments sold ............................ 10,280,546
Dividends receivable ....................................... 830,722
Prepaid expense ............................................ 11,718
-------------
TOTAL ASSETS ............................................... 410,437,707
-------------
LIABILITIES:
Securities sold short (proceeds received $305,054) ......... 310,417
Payable to custodian ....................................... 664,810
Payable for investments purchased .......................... 14,518,604
Payable for investment advisory fees ....................... 169,384
Payable for payroll expenses ............................... 41,716
Payable for accounting fees ................................ 11,250
Unrealized depreciation on swap contracts .................. 304,194
Payable for offering expenses .............................. 205,068
Unrealized depreciation on forward foreign
exchange contracts ....................................... 84,362
Other accrued expenses ..................................... 110,875
-------------
TOTAL LIABILITIES .......................................... 16,420,680
-------------
NET ASSETS applicable to 21,300,610
shares outstanding ....................................... $ 394,017,027
=============
NET ASSETS CONSIST OF:
Paid-in capital, at $0.001 par value ....................... $ 406,030,136
Undistributed net investment income ........................ 691,417
Accumulated net realized gains on investments,
swap contracts, and foreign currency transactions ........ 2,175,957
Net unrealized depreciation on investments ................. (14,776,454)
Net unrealized depreciation on swap contracts .............. (304,194)
Net unrealized depreciation on securities sold short ....... (5,363)
Net unrealized appreciation on foreign
currency translations .................................... 205,528
-------------
NET ASSETS ................................................. $ 394,017,027
=============
NET ASSET VALUE PER COMMON SHARE:
($394,017,027 / 21,300,610 shares outstanding;
unlimited number of shares authorized) ................... $ 18.50
=============
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 2007 (a)
INVESTMENT INCOME:
Dividends (net of foreign taxes of $194,222) ............... $ 5,643,486
Interest ................................................... 4,461,358
-------------
TOTAL INVESTMENT INCOME .................................... 10,104,844
-------------
EXPENSES:
Investment advisory fees ................................... 1,848,048
Shareholder communications expenses ........................ 129,778
Payroll expenses ........................................... 113,092
Trustees' fees ............................................. 61,198
Custodian fees ............................................. 50,079
Legal and audit fees ....................................... 49,000
Accounting fees ............................................ 45,000
Interest expense ........................................... 16,638
Shareholder services fees .................................. 8,074
Miscellaneous expenses ..................................... 50,803
-------------
TOTAL EXPENSES ............................................. 2,371,710
Less: Custodian fee credits ................................ (66,717)
-------------
NET EXPENSES ............................................... 2,304,993
-------------
NET INVESTMENT INCOME ...................................... 7,799,851
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
SWAP CONTRACTS, SECURITIES SOLD SHORT, AND
FOREIGN CURRENCY:
Net realized gain on investments ........................... 19,755,219
Net realized gain on swap contracts ........................ 1,141,226
Net realized loss on foreign currency transactions ......... (282,139)
-------------
Net realized gain on investments, swap contracts,
and foreign currency transactions ........................ 20,614,306
-------------
Net change in unrealized appreciation/depreciation:
on investments ........................................... (14,776,454)
on swap contracts ........................................ (304,194)
on securities sold short ................................. (5,363)
on foreign currency translations ......................... 205,528
-------------
Net change in unrealized appreciation/depreciation on
investments, swap contracts, securities sold short, and
foreign currency translations ............................ (14,880,483)
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, SWAP CONTRACTS, SECURITIES SOLD SHORT,
AND FOREIGN CURRENCY ..................................... 5,733,823
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ....... $ 13,533,674
=============
----------
(a) The Gabelli Global Deal Fund commenced investment operations on January
31, 2007.
See accompanying notes to financial statements.
5
THE GABELLI GLOBAL DEAL FUND
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED
DECEMBER 31, 2007 (a)
----------------------
OPERATIONS:
Net investment income ........................................................... $ 7,799,851
Net realized gain on investments, swap contracts, and foreign currency
transactions .................................................................. 20,614,306
Net change in unrealized appreciation/depreciation on investments,
swap contracts, securities sold short, and foreign currency translations ...... (14,880,483)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................ 13,533,674
-------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ........................................................... (6,348,376)
Net realized gain on investments, swap contracts, and foreign currency
transactions .................................................................. (19,198,407)
-------------
TOTAL DISTRIBUTIONS TO COMMON SHAREHOLDERS ...................................... (25,546,783)
-------------
FUND SHARE TRANSACTIONS:
Net increase in net assets from common shares issued in offering and
reinvestment of distributions ................................................. 406,953,927
Net decrease from repurchase of common shares ................................... (173,799)
Offering costs for common shares charged to paid-in-capital ..................... (850,000)
-------------
NET INCREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS ......................... 405,930,128
-------------
NET INCREASE IN NET ASSETS ...................................................... 393,917,019
NET ASSETS:
Beginning of period ............................................................. 100,008
-------------
End of period (including undistributed net investment income of $691,417) ....... $ 394,017,027
=============
----------
(a) The Gabelli Global Deal Fund commenced investment operations on January
31, 2007.
See accompanying notes to financial statements.
6
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION. The Gabelli Global Deal Fund (the "Fund") is a non-diversified
closed-end management investment company organized as a Delaware statutory trust
on October 17, 2006 and registered under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Fund sold 5,236 shares to Gabelli Funds, LLC (the
"Adviser") for $100,008 on December 22, 2006. Investment operations commenced on
January 31, 2007 upon the settlement of the sale of 18,750,000 shares of
beneficial interest in the amount of $357,375,000 (net of underwriting fees and
expenses of $17,625,000). In addition, on March 9, 2007, the Fund issued
2,500,000 shares of beneficial interest in the amount of $47,650,000 (net of
underwriting fees and expenses of $2,350,000) in conjunction with the exercise
of the underwriters' overallotment option. The Adviser agreed to pay all the
Fund's organizational costs and the amount by which the Fund's offering costs
(other than the underwriting fees) exceed $0.04 per common share.
The Fund's primary investment objective is to achieve absolute returns in
various market conditions without excessive risk of capital. The Fund will seek
to achieve its objective by investing primarily in merger arbitrage transactions
and, to a lesser extent, in corporate reorganizations involving stubs,
spin-offs, and liquidations. Under normal market conditions, the Fund will
invest at least 80% of its assets in securities or hedging arrangements relating
to companies involved in corporate transactions or reorganizations, giving rise
to the possibility of realizing gains upon or within relatively short periods of
time after the completion of such transactions or reorganizations.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with United States ("U.S.") generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates. The following is a summary of significant accounting
policies followed by the Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities are being valued. If there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Trustees (the "Board") so determines, by such other method as the Board
shall determine in good faith to reflect its fair market value. Portfolio
securities traded on more than one national securities exchange or market are
valued according to the broadest and most representative market, as determined
by the Adviser.
Portfolio securities primarily traded on a foreign market are generally
valued at the preceding closing values of such securities on the relevant
market, but may be fair valued pursuant to procedures established by the Board
if market conditions change significantly after the close of the foreign market
but prior to the close of business on the day the securities are being valued.
Debt instruments with remaining maturities of 60 days or less that are not
credit impaired are valued at amortized cost, unless the Board determines such
amount does not reflect the securities' fair value, in which case these
securities will be fair valued as determined by the Board. Debt instruments
having a maturity greater than 60 days for which market quotations are readily
available are valued at the average of the latest bid and asked prices. If there
were no asked prices quoted on such day, the security is valued using the
closing bid price. Futures contracts are valued at the closing settlement price
of the exchange or board of trade on which the applicable contract is traded.
Securities and assets for which market quotations are not readily
available are fair valued as determined by the Board. Fair valuation
methodologies and procedures may include, but are not limited to: analysis and
review of available financial and non-financial information about the company;
comparisons to the valuation and changes in valuation of similar securities,
including a comparison of foreign securities to the equivalent U.S. dollar value
ADR securities at the close of the U.S. exchange; and evaluation of any other
information that could be indicative of the value of the security.
In September 2006, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value
Measurements, which clarifies the definition of fair value and requires
companies to expand their disclosure about the use of fair value to measure
assets and liabilities in interim and annual periods subsequent to initial
recognition. Adoption of SFAS 157 requires the use of the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. At this time,
management is in the process of reviewing the requirements of SFAS 157 against
its current valuation policies to determine future applicability.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System, or with other brokers or
dealers that meet credit guidelines established by the Adviser and reviewed by
the Board. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell,
7
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
the obligation at an agreed-upon price and time, thereby determining the yield
during the Fund's holding period. The Fund will always receive and maintain
securities as collateral whose market value, including accrued interest, will be
at least equal to 102% of the dollar amount invested by the Fund in each
agreement. The Fund will make payment for such securities only upon physical
delivery or upon evidence of book entry transfer of the collateral to the
account of the custodian. To the extent that any repurchase transaction exceeds
one business day, the value of the collateral is marked-to-market on a daily
basis to maintain the adequacy of the collateral. If the seller defaults and the
value of the collateral declines or if bankruptcy proceedings are commenced with
respect to the seller of the security, realization of the collateral by the Fund
may be delayed or limited. At December 31, 2007, there were no open repurchase
agreements.
SWAP AGREEMENTS. The Fund may enter into equity swap transactions. The use
of equity swaps is a highly specialized activity that involves investment
techniques and risks different from those associated with ordinary portfolio
security transactions. An equity swap is a swap where a set of future cash flows
are exchanged between two counterparties. One of these cash flow streams will
typically be based on a reference interest rate combined with the performance of
a notional value of shares of a stock. The other will be based on the
performance of the shares of a stock. There is no assurance that the swap
contract counterparties will be able to meet their obligations pursuant to the
swap contracts, or that, in the event of default, the Fund will succeed in
pursuing contractual remedies. The Fund thus assumes the risk that it may be
delayed in or prevented from obtaining payments owed to it pursuant to the swap
contracts. The creditworthiness of the swap contract counterparties is closely
monitored in order to minimize the risk. Depending on the general state of
short-term interest rates and the returns of the Fund's portfolio securities at
that point in time, such a default could negatively affect the Fund's ability to
make dividend payments. In addition, at the time an equity swap transaction
reaches its scheduled termination date, there is a risk that the Fund will not
be able to obtain a replacement transaction or that the terms of the replacement
will not be as favorable as on the expiring transaction. If this occurs, it
could have a negative impact on the Fund's ability to make dividend payments.
The use of derivative instruments involves, to varying degrees, elements
of market and counterparty risk in excess of the amount recognized in the
Statement of Assets and Liabilities.
Unrealized gains related to swaps are reported as an asset and unrealized
losses are reported as a liability in the Statement of Assets and Liabilities.
The change in value of swaps, including the accrual of periodic amounts of
interest to be paid or received on swaps, is reported as unrealized gains or
losses in the Statement of Operations. A realized gain or loss is recorded upon
payment or receipt of a periodic payment or termination of swap agreements.
The Fund has entered into equity swap agreements with Bear, Stearns
International Limited. Details of the swaps at December 31, 2007 are as follows:
NET UNREALIZED
NOTIONAL EQUITY SECURITY INTEREST RATE/ TERMINATION APPRECIATION
AMOUNT RECEIVED EQUITY SECURITY PAID DATE (DEPRECIATION)
-------- --------------- -------------------- ----------- --------------
Market Value Overnight LIBOR plus 40 bps plus
Appreciation on: Market Value Depreciation on:
$ 65,225 (100,000 shares) Gulf Keystone Petroleum Ltd. Gulf Keystone Petroleum Ltd. 04/15/08 $ (1,170)
10,943,612 (800,000 shares) Imperial Chemical Industries plc Imperial Chemical Industries plc 05/15/08 (305,329)
9,193 (1,000 shares) J Sainsbury plc J Sainsbury plc 09/15/08 (718)
74,370 (25,000 shares) Umbro plc Umbro plc 09/15/08 17,908
507,482 (20,000 shares) Burren Energy plc Burren Energy plc 10/15/08 (24,063)
908,941 (75,000 shares) Gyrus Group plc Gyrus Group plc 10/15/08 14,732
1,625,568 (75,000 shares) Kelda Group plc Kelda Group plc 10/15/08 (6,023)
55,710 (10,000 shares) Foseco plc Foseco plc 11/17/08 585
13,593 (1,000 shares) MTL Instruments Group plc MTL Instruments Group plc 11/17/08 (116)
----------
$ (304,194)
==========
FUTURES CONTRACTS. The Fund may engage in futures contracts for the
purpose of hedging against changes in the value of its portfolio securities and
in the value of securities it intends to purchase. Upon entering into a futures
contract, the Fund is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the "initial margin." Subsequent payments ("variation margin") are made
or received by the Fund each day, depending on the daily fluctuations in the
value of the contract, which are included in unrealized
appreciation/depreciation on investments and futures contracts. The Fund
recognizes a realized gain or loss when the contract is closed.
There are several risks in connection with the use of futures contracts as
a hedging instrument. The change in value of futures contracts primarily
corresponds with the value of their underlying instruments, which may not
correlate with the change in value of the hedged investments. In addition, there
is the risk that the Fund may not be able to enter into a closing transaction
because of an illiquid secondary market. At December 31, 2007, there were no
open futures contracts.
8
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SECURITIES SOLD SHORT. The Fund may enter into short sale transactions.
Short selling involves selling securities that may or may not be owned and, at
times, borrowing the same securities for delivery to the purchaser, with an
obligation to replace such borrowed securities at a later date. The proceeds
received from short sales are recorded as liabilities and the Fund records an
unrealized gain or loss to the extent of the difference between the proceeds
received and the value of an open short position on the day of determination.
The Fund records a realized gain or loss when the short position is closed out.
By entering into a short sale, the Fund bears the market risk of an unfavorable
change in the price of the security sold short. Dividends on short sales are
recorded as an expense by the Fund on the ex-dividend date and interest expense
is recorded on the accrual basis. Securities sold short at December 31, 2007 are
reflected in the Schedule of Investments.
FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign
exchange contracts for hedging a specific transaction with respect to either the
currency in which the transaction is denominated or another currency as deemed
appropriate by the Adviser. Forward foreign exchange contracts are valued at the
forward rate and are marked-to-market daily. The change in market value is
included in unrealized appreciation/depreciation on investments and foreign
currency translations. When the contract is closed, the Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
The use of forward foreign exchange contracts does not eliminate
fluctuations in the underlying prices of the Fund's portfolio securities, but it
does establish a rate of exchange that can be achieved in the future. Although
forward foreign exchange contracts limit the risk of loss due to a decline in
the value of the hedged currency, they also limit any potential gain that might
result should the value of the currency increase. In addition, the Fund could be
exposed to risks if the counterparties to the contracts are unable to meet the
terms of their contracts. Forward foreign exchange contracts at December 31,
2007 are reflected in the Schedule of Investments.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund are
maintained in U.S. dollars. Foreign currencies, investments, and other assets
and liabilities are translated into U.S. dollars at the current exchange rates.
Purchases and sales of investment securities, income, and expenses are
translated at the exchange rate prevailing on the respective dates of such
transactions. Unrealized gains and losses that result from changes in foreign
exchange rates and/or changes in market prices of securities have been included
in unrealized appreciation/depreciation on investments and foreign currency
translations. Net realized foreign currency gains and losses resulting from
changes in exchange rates include foreign currency gains and losses between
trade date and settlement date on investment securities transactions, foreign
currency transactions, and the difference between the amounts of interest and
dividends recorded on the books of the Fund and the amounts actually received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the purchase trade date and subsequent sale trade date is
included in realized gain (loss) on investments.
FOREIGN SECURITIES. The Fund may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies, and possible future adverse
political and economic developments. Moreover, securities of many foreign
issuers and their markets may be less liquid and their prices more volatile than
those of securities of comparable U.S. issuers.
FOREIGN TAXES. The Fund may be subject to foreign taxes on income, gains
on investments, or currency repatriation, a portion of which may be recoverable.
The Fund will accrue such taxes and recoveries as applicable, based upon its
current interpretation of tax rules and regulations that exist in the markets in
which it invests.
CONCENTRATION RISKS. The Fund may invest a high percentage of its assets
in specific sectors of the market in order to achieve a potentially greater
investment return. As a result, the Fund may be more susceptible to economic,
political, and regulatory developments in a particular sector of the market,
positive or negative, and may experience increased volatility to the Fund's NAV
and a magnified effect in its total return.
MERGER ARBITRAGE RISK. The principal risk associated with the Fund's
investment strategy is that certain of the proposed reorganizations in which the
Fund invests may involve a longer time frame than originally contemplated, or be
renegotiated or terminated, in which case, losses may be realized. The Fund
invests all or a portion of its assets to seek short-term capital appreciation.
This can be expected to increase the portfolio turnover rate and cause increased
brokerage commission costs.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded on the accrual
basis. Premiums and discounts on debt securities are amortized using the
effective yield to maturity method. Dividend income is recorded on the
ex-dividend date except for certain dividends which are recorded as soon as the
Fund is informed of the dividend.
9
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
CUSTODIAN FEE CREDITS AND INTEREST EXPENSE. When cash balances are
maintained in the custody account, the Fund receives credits which are used to
offset custodian fees. The gross expenses paid under the custody arrangement are
included in custodian fees in the Statement of Operations with the corresponding
expense offset, if any, shown as "custodian fee credits." When cash balances are
overdrawn, the Fund is charged an overdraft fee equal to 110% of the 90 day
Treasury Bill rate on outstanding balances. This amount, if any, would be shown
as "interest expense" in the Statement of Operations.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions to shareholders are recorded
on the ex-dividend date. Distributions to shareholders are based on income and
capital gains as determined in accordance with federal income tax regulations,
which may differ from income and capital gains as determined under U.S.
generally accepted accounting principles. These differences are primarily due to
differing treatments of income and gains on various investment securities and
foreign currency transactions held by the Fund, timing differences, and
differing characterizations of distributions made by the Fund. Distributions
from net investment income include net realized gains on foreign currency
transactions. These book/tax differences are either temporary or permanent in
nature. To the extent these differences are permanent, adjustments are made to
the appropriate capital accounts in the period when the differences arise. These
reclassifications have no impact on the NAV of the Fund. For the period ended
December 31, 2007, reclassifications were made to decrease undistributed net
investment income by $760,058 and increase accumulated net realized gains on
investments, swap contracts, and foreign currency transactions by $760,058.
The tax character of distributions paid during the period ended December
31, 2007 was as follows:
DISTRIBUTIONS PAID FROM:
Ordinary income
(inclusive of short-term capital gains) ....................... $ 25,546,783
------------
Total distributions paid ........................................ $ 25,546,783
============
PROVISION FOR INCOME TAXES. The Fund intends to qualify and elect to be
treated as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). It is the policy of the Fund to
comply with the requirements of the Code applicable to regulated investment
companies and to distribute substantially all of its net investment company
taxable income and net capital gains. Therefore, no provision for federal income
taxes is required.
At December 31, 2007, the difference between book basis and tax basis
unrealized appreciation was primarily due to deferral of losses from wash sales
for tax purposes and mark-to-market adjustments on passive foreign investment
companies.
As of December 31, 2007, the components of accumulated earnings (losses)
on a tax basis were as follows:
Net unrealized depreciation on investments ................... $ (15,068,398)
Net unrealized depreciation on foreign currency and swap
contracts .................................................. (98,666)
Undistributed ordinary income ................................ 2,991,405
Post-October currency loss deferral .......................... (141,644)
Other temporary differences .................................. 304,194
--------------
Total ...................................................... $ (12,013,109)
==============
The following summarizes the tax cost of investments and the related
unrealized appreciation (depreciation) at December 31, 2007:
GROSS GROSS
COST/ UNREALIZED UNREALIZED NET UNREALIZED
PREMIUMS APPRECIATION DEPRECIATION DEPRECIATION
------------- ------------- ---------------- ---------------
Investments .... $ 413,557,381 $ 3,062,591 $ (18,125,626) $ (15,063,035)
Short sales .... 305,054 -- (5,363) (5,363)
----------- ------------- -------------
$ 3,062,591 $ (18,130,989) $ (15,068,398)
=========== ============= =============
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes,
an Interpretation of FASB Statement No. 109" (the "Interpretation") established
a minimum threshold for financial statement recognition of the benefit of
positions taken in filing tax returns (including whether the Fund is taxable in
a particular jurisdiction) and required certain expanded tax disclosures. The
Fund has adopted the Interpretation for all open tax years and it had no impact
on the amounts reported in the financial statements.
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES. The Fund has entered into an
investment advisory agreement (the "Advisory Agreement") with the Adviser which
provides that the Fund will pay the Adviser a base fee, computed weekly and paid
monthly, equal on an annual basis to 0.50% of the value of the Fund's average
weekly managed assets. Managed assets consist of all of the assets of the Fund
without deduction for borrowings, repurchase transactions and other leveraging
techniques, the liquidation value of any outstanding preferred shares, or other
liabilities except for certain ordinary course expenses. In addition, the Fund
may pay the Adviser an annual performance fee at calendar year end if the Fund's
total return on its managed assets during the calendar year in question exceeds
the total return of the 3 Month U.S. Treasury Bill Index (the "T-Bill Index")
during the same period. For every 4 basis points that the Fund's total return
exceeds the T-Bill Index, the Fund will accrue weekly and pay annually 1 basis
point performance fee up
10
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
to a maximum performance fee of 150 basis points. Under the performance fee
arrangement, the annual rate of the total fees paid to the Adviser can range
from 0.50% to 2.00% of the average weekly managed assets. For the period ended
December 31, 2007, the Fund did not pay a performance fee to the Adviser. In
accordance with the Advisory Agreement, the Adviser provides a continuous
investment program for the Fund's portfolio and oversees the administration of
all aspects of the Fund's business and affairs.
During the period ended December 31, 2007, the Fund paid brokerage
commissions on security trades of $856,982 to Gabelli & Company, Inc. ("Gabelli
& Company"), an affiliate of the Adviser.
The cost of calculating the Fund's NAV per share is a Fund expense
pursuant to the Advisory Agreement between the Fund and the Adviser. During the
period ended December 31, 2007, the Fund paid or accrued $45,000 to the Adviser
in connection with the cost of computing the Fund's NAV.
As per the approval of the Board, the Fund compensates officers, who are
employed by the Fund and are not employed by the Adviser (although the officers
may receive incentive based variable compensation from affiliates of the
Adviser) and pays its allocated portion of the cost of the Fund's Chief
Compliance Officer. For the period ended December 31, 2007 the Fund paid or
accrued $113,092, which is included in payroll expenses in the Statement of
Operations.
The Fund pays each Trustee who is not considered to be an affiliated
person an annual retainer of $3,000 plus $1,000 for each Board meeting attended
in person ($500 if attended telephonically) and they are reimbursed for any out
of pocket expenses incurred in attending meetings. All Board committee members
receive $500 per committee meeting attended. Trustees who are directors or
employees of the Adviser or an affiliated company receive no compensation or
expense reimbursement from the Fund.
4. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the period ended December 31, 2007, other than short-term and U.S. Government
securities, aggregated $1,511,044,317 and $528,976,116, respectively.
5. CAPITAL. The Fund is authorized to issue an unlimited number of common shares
of beneficial interest (par value $0.001). The Board has authorized the
repurchase of its shares on the open market when the shares are trading at a
discount of 7.5% or more (or such other percentage as the Board may determine
from time to time) from the NAV of the shares. During the period ended December
31, 2007, the Fund repurchased 10,500 shares of its common stock in the open
market at a cost of $173,799 and an average discount of approximately 13.75%
from its NAV. All shares of common stock repurchased have been retired.
Transactions in shares of beneficial interest were as follows:
PERIOD ENDED
DECEMBER 31, 2007 (a)
-------------------------
SHARES AMOUNT
---------- -------------
Initial Seed Capital ............................... 5,236 $ 100,008
Shares issued in offering
(net of underwriting fees and offering costs) .... 21,250,000 405,025,000
Shares issued upon reinvestment of
distributions .................................... 55,874 1,078,927
Shares repurchased ................................. (10,500) (173,799)
---------- -------------
Net increase ....................................... 21,300,610 $ 406,030,136
========== =============
----------
(a) The Gabelli Global Deal Fund commenced investment operations on January
31, 2007.
6. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of
indemnifications. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
7. OTHER MATTERS. The Adviser and/or affiliates received subpoenas from the
Attorney General of the State of New York and the SEC requesting information on
mutual fund share trading practices involving certain funds managed by the
Adviser. GAMCO Investors, Inc. ("GAMCO"), the Adviser's parent company,
responded to these requests for documents and testimony. In June 2006, GAMCO
began discussions with the SEC regarding a possible resolution of their inquiry.
In February 2007, the Adviser made an offer of settlement to the staff of the
SEC for communication to the Commission for its consideration to resolve this
matter. This offer of settlement is subject to agreement regarding the specific
language of the SEC's administrative order and other settlement documents. On a
separate matter, in September 2005, the Adviser was informed by the staff of the
SEC that the staff may recommend to the Commission that an administrative remedy
and a monetary penalty be sought from the Adviser in connection with the actions
of two of nine closed-end funds managed by the Adviser relating to Section 19(a)
and Rule 19a-1 of the 1940 Act. These provisions require registered investment
companies to provide written statements to shareholders when a dividend is made
from a source other than net investment income. While the two closed-end funds
sent annual statements and provided other materials containing this information,
the funds did not send written statements to shareholders with each distribution
in 2002 and 2003. The Adviser believes that all of the funds are now in
compliance. The Adviser believes that these matters would have no effect on the
Fund or any material adverse effect on the Adviser or its ability to manage the
Fund. The staff's notice to the Adviser did not relate to the Fund.
11
THE GABELLI GLOBAL DEAL FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT
THE PERIOD:
PERIOD ENDED
DECEMBER 31, 2007 (d)
---------------------
OPERATING PERFORMANCE:
Net asset value, beginning of period ................ $ 19.06(e)
Net investment income (a) ........................... 0.37
Net realized and unrealized gain on investments,
swap contracts, and foreign currency
transactions ..................................... 0.27
--------
Total from investment operations .................... 0.64
--------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ............................... (0.30)
Net realized gains on investments, swap
contracts, and foreign currency
transactions ..................................... (0.90)
--------
Total distributions to common shareholders .......... (1.20)
--------
FUND SHARE TRANSACTIONS:
Increased in net asset value from common
share transactions ................................ 0.00(f)
--------
NET ASSET VALUE, END OF PERIOD ...................... $ 18.50
========
Net asset value total return + ...................... 3.35%
========
Market value, end of period ......................... $ 15.96
========
Total investment return ++ .......................... (14.55)%
========
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:
Net assets end of period (in 000's) ................. $394,017
Ratio of net investment income to average net
assets ........................................... 2.12%(g)
Ratio of operating expenses to average net
assets (b)(c) .................................... 0.64%(g)
Portfolio turnover rate ............................. 177%
----------
+ Based on net asset value per share, at commencement of operations of
$19.06 per share, adjusted for reinvestment of distributions at the asset
value per share on the ex-dividend dates. Total return for a period of
less than one year is not annualized.
++ Based on market value per share, at initial public offering of $20.00 per
share, adjusted for reinvestments of distributions at prices obtained
under the Fund's dividend reinvestment plan. Total return for a period of
less than one year is not annualized.
(a) Per share amounts have been calculated using the average shares
outstanding method.
(b) The ratio does not include a reduction of expenses for custodian fee
credits on cash balances maintained with the custodian. Including such
custodian fee credits, the expense ratio for the period ended December 31,
2007 would have been 0.63%.
(c) The Fund incurred interest expense during the period ended December 31,
2007. If interest expense had not been incurred, the ratio of operating
expenses to average net assets would have been 0.62%.
(d) The Gabelli Global Deal Fund commenced investment operations on January
31, 2007.
(e) The beginning of the period NAV reflects a $0.04 reduction for costs
associated with the initial public offering.
(f) Amount represents less than $0.005 per share.
(g) Annualized.
See accompanying notes to financial statements.
12
THE GABELLI GLOBAL DEAL FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees of
The Gabelli Global Deal Fund:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of The Gabelli Global Deal Fund (the "Fund"), as of
December 31, 2007, and the related statement of operations, statement of changes
in net assets and financial highlights for the period January 31, 2007
(commencement of operations) through December 31, 2007. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of December 31, 2007, by correspondence with the Fund's
custodian and brokers or by other appropriate auditing procedures where replies
from brokers were not received. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Gabelli Global Deal Fund at December 31, 2007, the results of its operations,
the changes in its net assets and its financial highlights for the period
January 31, 2007 (commencement of operations) through December 31, 2007, in
conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
February 21, 2008
13
THE GABELLI GLOBAL DEAL FUND
ADDITIONAL FUND INFORMATION (UNAUDITED)
The business and affairs of the Fund are managed under the direction of
the Fund's Board of Trustees. Information pertaining to the Trustees and
officers of the Fund is set forth below. The Fund's Statement of Additional
Information includes additional information about the Fund's Trustees and is
available, without charge, upon request, by calling 800-GABELLI (800-422-3554)
or by writing to The Gabelli Global Deal Fund at One Corporate Center, Rye, NY
10580-1422.
NUMBER OF
TERM OF FUNDS IN FUND
NAME, POSITION(S) OFFICE AND COMPLEX
ADDRESS(1) LENGTH OF OVERSEEN BY PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS
AND AGE TIME SERVED(2) TRUSTEE DURING PAST FIVE YEARS HELD BY TRUSTEE(4)
-------------------------- -------------- ---------------- --------------------------------------- -------------------------
INTERESTED TRUSTEES(3):
MARIO J. GABELLI Since 2006** 26 Chairman and Chief Executive Officer Director of Morgan Group
Trustee and of GAMCO Investors, Inc. and Chief Holdings, Inc. (holding
Chief Investment Officer Investment Officer - Value Portfolios company); Chairman of the
Age: 65 of Gabelli Funds, LLC and GAMCO Asset Board of LICT Corp.
Management Inc.; Director/Trustee or (multimedia and
Chief Investment Officer of other communication services
registered investment companies in the company)
Gabelli/GAMCO Funds complex; Chairman
and Chief Executive Officer of GGCP,
Inc.
EDWARD T. TOKAR Since 2006*** 2 Senior Managing Director of Beacon Trustee of LEVCO Series
Trustee Trust Company since 2004; Chief Trust; Director of DB
Age: 60 Executive Officer of Allied Capital Hodge Strategies Fund LLC;
Management LLC (1997-2004); Vice Director of the Topiary
President - Investments of Honeywell Benefit Plan Investor Fund
International Inc. (1977-2004) LLC (financial services)
NON-INTERESTED TRUSTEES(5):
ANTHONY J. COLAVITA Since 2006*** 35 Partner in the law firm of Anthony J. --
Trustee Colavita, P.C.
Age: 72
JAMES P. CONN Since 2006* 16 Former Managing Director and Chief --
Trustee Investment Officer of Financial
Age: 69 Security Assurance Holdings Ltd.
(insurance holding company) (1992-1998)
CLARENCE A. DAVIS Since 2006* 2 Chief Executive Officer of Nestor, Director of Oneida Ltd.
Trustee Inc.; Former Chief Operating Officer (kitchenware)
Age: 65 (2000-2005) and Chief Financial Officer
(1999-2000) of the American Institute
of Certified Public Accountants
MARIO D'URSO Since 2006** 4 Chairman of Mittel Capital Markets --
Trustee S.p.A. since 2001
Age: 67
ARTHUR V. FERRARA Since 2006* 7 Former Chairman of the Board and Chief --
Trustee Executive Officer of The Guardian Life
Age: 77 Insurance Company of America
(1992-1995)
MICHAEL J. MELARKEY Since 2006** 4 Partner in the law firm of Avansino, Director of Southwest Gas
Trustee Melarkey, Knobel & Mulligan Corporation (natural gas
Age: 58 utility)
SALVATORE J. ZIZZA Since 2006*** 26 Chairman of Zizza & Co., Ltd. Director of Hollis-Eden
Trustee (consulting) Pharmaceuticals
Age: 62 (biotechnology); Director
of Earl Scheib, Inc.
(automotive services)
14
THE GABELLI GLOBAL DEAL FUND
ADDITIONAL FUND INFORMATION (CONTINUED) (UNAUDITED)
TERM OF
NAME, POSITION(S) OFFICE AND
ADDRESS(1) LENGTH OF PRINCIPAL OCCUPATION(S)
AND AGE TIME SERVED(2) DURING PAST FIVE YEARS
-------------------------- -------------- -----------------------
OFFICERS:
BRUCE N. ALPERT Since 2006 Executive Vice President and Chief Operating Officer of Gabelli Funds, LLC
President since 1988 and an officer of most of the registered investment companies in
Age: 56 the Gabelli/GAMCO Funds complex; Director and President of Gabelli Advisers,
Inc. since 1998
CARTER W. AUSTIN Since 2006 Vice President of The Gabelli Equity Trust Inc. since 2000, The Gabelli
Vice President Dividend & Income Trust since 2003, The Gabelli Global Gold, Natural
Age: 41 Resources & Income Trust since 2005; and The Gabelli Healthcare & Wellness(Rx)
Trust since 2007; Vice President of Gabelli Funds, LLC since 1996
PETER D. GOLDSTEIN Since 2006 Director of Regulatory Affairs at GAMCO Investors, Inc. since 2004; Chief
Chief Compliance Officer Compliance Officer of all of the registered investment companies in the
Age: 54 Gabelli/GAMCO Funds complex; Vice President of Goldman Sachs Asset Management
(2000-2004)
JAMES E. MCKEE Since 2006 Vice President, General Counsel, and Secretary of GAMCO Investors, Inc. since
Secretary 1999 and GAMCO Asset Management Inc. since 1993; Secretary of all of the
Age: 44 registered investment companies in the Gabelli/GAMCO Funds complex
SHEILA J. MOORE Since 2006 Assistant Vice President of The Gabelli Global Deal Fund since 2006; Adjunct
Assistant Vice President professor in Economics and Finance, Woodbury University, Burbank, CA prior to
and Ombudsman 2006
Age: 45
AGNES MULLADY Since 2006 Vice President of Gabelli Funds, LLC since 2007; Officer of all of the
Treasurer registered investment companies in the Gabelli/GAMCO Funds complex; Senior
Age: 49 Vice President of U.S. Trust Company, N.A. and Treasurer and Chief Financial
Officer of Excelsior Funds (2004-2005); Chief Financial Officer of AMIC
Distribution Partners (2002-2004); Controller of Reserve Management
Corporation and Reserve Partners, Inc. and Treasurer of Reserve Funds
(2000-2002)
DAVID I. SCHACHTER Since 2006 Vice President of The Gabelli Utility Trust since 1999 and The Gabelli Global
Vice President Utility & Income Trust since 2004; Vice President of Gabelli & Company, Inc.
Age: 54 since 1999; and The Gabelli Healthcare & Wellness(Rx) Trust since 2007
----------
(1) Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted.
(2) The Fund's Board of Trustees is divided into three classes, each class
having a term of three years. Each year the term of office of one class
expires and the successor or successors elected to such class serve for a
three year term. The three year term for each class expires as follows:
* - Term expires at the Fund's 2008 Annual Meeting of Shareholders or
until their successors are duly elected and qualified.
** - Term expires at the Fund's 2009 Annual Meeting of Shareholders or
until their successors are duly elected and qualified.
*** - Term expires at the Fund's 2010 Annual Meeting of Shareholders or
until their successors are duly elected and qualified.
Each officer will hold office for an indefinite term until the date he or
she resigns or retires or until his or her successor is elected and
qualified.
(3) "Interested person" of the Fund as defined in the 1940 Act. Mr. Gabelli is
considered an "interested person" of the Fund because of his affiliation
with the Investment Adviser and with Gabelli & Company, Inc., which is a
principal underwriter for the Fund's common shares and is expected to
execute portfolio transactions for the Fund. Mr. Tokar is considered an
"interested person" of the Fund as a result of his son's employment by an
affiliate of the Adviser.
(4) This column includes only directorships of companies required to report to
the SEC under the Securities Exchange Act of 1934, as amended (i.e. public
companies) or other investment companies registered under the 1940 Act.
(5) Trustees who are not interested persons are considered "Independent"
Trustees.
15
THE GABELLI GLOBAL DEAL FUND
INCOME TAX INFORMATION (UNAUDITED)
DECEMBER 31, 2007
CASH DIVIDENDS AND DISTRIBUTIONS
TOTAL AMOUNT ORDINARY DIVIDEND
PAYABLE RECORD PAID INVESTMENT REINVESTMENT
DATE DATE PER SHARE (a) INCOME (a) PRICE
-------- -------- ------------- ---------- ------------
COMMON SHARES
06/25/07 06/15/07 $0.40000 $0.40000 $19.1320
09/24/07 09/14/07 0.40000 0.40000 17.2356
12/17/07 12/12/07 0.40000 0.40000 15.9673
-------- --------
$1.20000 $1.20000
A Form 1099-DIV has been mailed to all shareholders of record for the
distributions mentioned above, setting forth specific amounts to be included in
the 2007 tax returns. Ordinary income distributions include net investment
income and realized net short-term capital gains. Ordinary income is reported in
box 1a of Form 1099-DIV. Long-term capital gain distributions are reported in
box 2a of Form 1099-DIV.
CORPORATE DIVIDENDS RECEIVED DEDUCTION, QUALIFIED DIVIDEND INCOME, AND U.S.
TREASURY SECURITIES INCOME
The Fund paid to common shareholders ordinary income dividends of $1.20 per
share in 2007. For the period ended December 31, 2007, 13.45% of the ordinary
dividends qualified for the dividend received deduction available to
corporations, and 16.07% of the ordinary income distributions were qualified
dividend income. The percentage of ordinary income dividends paid by the Fund
during 2007 derived from U.S. Treasury Securities was 2.79%. Such income is
exempt from state and local tax in all states. However, many states, including
New York and California, allow a tax exemption for a portion of the income
earned only if a mutual fund has invested at least 50% of its assets at the end
of each quarter of its fiscal year in U.S. Government Securities. The Fund did
not meet this strict requirement in 2007. The percentage of net assets of U.S.
Government Securities held as of December 31, 2007 was 35.05%.
HISTORICAL DISTRIBUTION SUMMARY
COMMON SHARES
SHORT-TERM
INVESTMENT CAPITAL TOTAL
INCOME (a) GAINS (a) DISTRIBUTIONS
---------- ---------- -------------
2007 ................................. $0.2982 $0.9018 $1.20000
----------
(a) Taxable as ordinary income for Federal tax purposes.
16
AUTOMATIC DIVIDEND REINVESTMENT
AND VOLUNTARY CASH PURCHASE PLANS
ENROLLMENT IN THE PLAN
It is the policy of The Gabelli Global Deal Fund (the "Fund") to
automatically reinvest dividends payable to common shareholders. As a
"registered" shareholder you automatically become a participant in the Fund's
Automatic Dividend Reinvestment Plan (the "Plan"). The Plan authorizes the Fund
to credit common shares to participants upon an income dividend or a capital
gains distribution regardless of whether the shares are trading at a discount or
a premium to net asset value. All distributions to shareholders whose shares are
registered in their own names will be automatically reinvested pursuant to the
Plan in additional shares of the Fund. Plan participants may send their share
certificates to American Stock Transfer ("AST") to be held in their dividend
reinvestment account. Registered shareholders wishing to receive their
distributions in cash must submit this request in writing to:
The Gabelli Global Deal Fund
c/o American Stock Transfer
6201 15th Avenue
Brooklyn, NY 11219
Shareholders requesting this cash election must include the shareholder's
name and address as they appear on the share certificate. Shareholders with
additional questions regarding the Plan or requesting a copy of the terms of the
Plan may contact AST at (888) 422-3262.
If your shares are held in the name of a broker, bank, or nominee, you
should contact such institution. If such institution is not participating in the
Plan, your account will be credited with a cash dividend. In order to
participate in the Plan through such institution, it may be necessary for you to
have your shares taken out of "street name" and re-registered in your own name.
Once registered in your own name your distributions will be automatically
reinvested. Certain brokers participate in the Plan. Shareholders holding shares
in "street name" at participating institutions will have dividends automatically
reinvested. Shareholders wishing a cash dividend at such institution must
contact their broker to make this change.
The number of common shares distributed to participants in the Plan in
lieu of cash dividends is determined in the following manner. Under the Plan,
whenever the market price of the Fund's common shares is equal to or exceeds net
asset value at the time shares are valued for purposes of determining the number
of shares equivalent to the cash dividends or capital gains distribution,
participants are issued common shares valued at the greater of (i) the net asset
value as most recently determined or (ii) 95% of the then current market price
of the Fund's common shares. The valuation date is the dividend or distribution
payment date or, if that date is not a New York Stock Exchange ("NYSE") trading
day, the next trading day. If the net asset value of the common shares at the
time of valuation exceeds the market price of the common shares, participants
will receive common shares from the Fund valued at market price. If the Fund
should declare a dividend or capital gains distribution payable only in cash,
AST will buy common shares in the open market, or on the NYSE, or elsewhere, for
the participants' accounts, except that AST will endeavor to terminate purchases
in the open market and cause the Fund to issue shares at net asset value if,
following the commencement of such purchases, the market value of the common
shares exceeds the then current net asset value.
The automatic reinvestment of dividends and capital gains distributions
will not relieve participants of any income tax which may be payable on such
distributions. A participant in the Plan will be treated for federal income tax
purposes as having received, on a dividend payment date, a dividend or
distribution in an amount equal to the cash the participant could have received
instead of shares.
17
VOLUNTARY CASH PURCHASE PLAN
The Voluntary Cash Purchase Plan is yet another vehicle for our
shareholders to increase their investment in the Fund. In order to participate
in the Voluntary Cash Purchase Plan, shareholders must have their shares
registered in their own name.
Participants in the Voluntary Cash Purchase Plan have the option of making
additional cash payments to AST for investments in the Fund's common shares at
the then current market price. Shareholders may send an amount from $250 to
$10,000. AST will use these funds to purchase shares in the open market on or
about the 1st and 15th of each month. AST will charge each shareholder who
participates a pro rata share of the brokerage commissions. Brokerage charges
for such purchases are expected to be less than the usual brokerage charge for
such transactions. It is suggested that any voluntary cash payments be sent to
American Stock Transfer, 6201 15th Avenue, Brooklyn, NY 11219 such that AST
receives such payments approximately 10 days before the investment date. Funds
not received at least five days before the investment date shall be held for
investment until the next purchase date. A payment may be withdrawn without
charge if notice is received by AST at least 48 hours before such payment is to
be invested.
SHAREHOLDERS WISHING TO LIQUIDATE SHARES HELD AT AST must do so in writing
or by telephone. Please submit your request to the above mentioned address or
telephone number. Include in your request your name, address, and account
number. The cost to liquidate shares is $1.00 per transaction as well as the
brokerage commission incurred. Brokerage charges are expected to be less than
the usual brokerage charge for such transactions.
For more information regarding the Automatic Dividend Reinvestment Plan
and Voluntary Cash Purchase Plan, brochures are available by calling (914)
921-5070 or by writing directly to the Fund.
The Fund reserves the right to amend or terminate the Plan as applied to
any voluntary cash payments made and any dividend or distribution paid
subsequent to written notice of the change sent to the members of the Plan at
least 90 days before the record date for such dividend or distribution. The Plan
also may be amended or terminated by AST on at least 90 days written notice to
participants in the Plan.
--------------------------------------------------------------------------------
The Annual Meeting of The Gabelli Global Deal Fund's shareholders will be held
on Monday, May 19, 2008 at the Greenwich Library in Greenwich, Connecticut.
--------------------------------------------------------------------------------
18
[GRAPHIC OMITTED]
TRUSTEES AND OFFICERS
THE GABELLI GLOBAL DEAL FUND
ONE CORPORATE CENTER, RYE, NY 10580-1422
TRUSTEES OFFICERS
Mario J. Gabelli, CFA Bruce N. Alpert
CHAIRMAN & CHIEF EXECUTIVE OFFICER, PRESIDENT
GAMCO INVESTORS, INC.
Carter W. Austin
Anthony J. Colavita VICE PRESIDENT
ATTORNEY-AT-LAW,
ANTHONY J. COLAVITA, P.C. Peter D. Goldstein
CHIEF COMPLIANCE OFFICER
James P. Conn
FORMER MANAGING DIRECTOR & James E. McKee
CHIEF INVESTMENT OFFICER, SECRETARY
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
Sheila J. Moore
Clarence A. Davis ASSISTANT VICE PRESIDENT & OMBUDSMAN
CHIEF EXECUTIVE OFFICER,
NESTOR, INC. Agnes Mullady
TREASURER
Mario d'Urso
CHAIRMAN, MITTEL CAPITAL MARKETS SPA David I. Schachter
VICE PRESIDENT
Arthur V. Ferrara
FORMER CHAIRMAN & CHIEF EXECUTIVE OFFICER, INVESTMENT ADVISER
GUARDIAN LIFE INSURANCE COMPANY OF AMERICA
Gabelli Funds, LLC
Michael J. Melarkey One Corporate Center
ATTORNEY-AT-LAW, Rye, New York 10580-1422
AVANSINO, MELARKEY, KNOBEL & MULLIGAN
CUSTODIAN
Edward T. Tokar
SENIOR MANAGING DIRECTOR, Mellon Trust of New England, N.A.
BEACON TRUST COMPANY
COUNSEL
Salvatore J. Zizza
CHAIRMAN, ZIZZA & CO., LTD. Skadden, Arps, Slate, Meagher & Flom LLP
TRANSFER AGENT AND REGISTRAR
American Stock Transfer and Trust Company
STOCK EXCHANGE LISTING
Common
------
NYSE-Symbol: GDL
Shares Outstanding: 21,300,610
The Net Asset Value per share appears in
the Publicly Traded Funds column, under
the heading "Specialized Equity Funds,"
in Monday's The Wall Street Journal. It
is also listed in Barron's Mutual
Funds/Closed End Funds section under the
heading "Specialized Equity Funds."
The Net Asset Value per share may be
obtained each day by calling (914)
921-5070 or visiting www.gabelli.com.
--------------------------------------------------------------------------------
For general information about the Gabelli Funds, call 800-GABELLI
(800-422-3554), fax us at 914-921-5118, visit Gabelli Funds' Internet homepage
at: WWW.GABELLI.COM, or e-mail us at: closedend@gabelli.com
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Fund may, from time to time, purchase
its common shares in the open market when the Fund's shares are trading at a
discount of 7.5% or more from the net asset value of the shares.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
THE GABELLI GLOBAL DEAL FUND
ONE CORPORATE CENTER, RYE, NY 10580-1422
PHONE: 800-GABELLI (800-422-3554)
FAX: 914-921-5118 INTERNET: WWW.GABELLI.COM
E-MAIL: CLOSEDEND@GABELLI.COM
GDL Q4/2007
--------------------------------------------------------------------------------
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report,
has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party.
(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are
employed by the registrant or a third party, and that relates to any
element of the code of ethics description.
(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are
employed by the registrant or a third party, that relates to one or
more of the items set forth in paragraph (b) of this item's
instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the registrant's Board of
Directors has determined that Salvatore J. Zizza is qualified to serve as an
audit committee financial expert serving on its audit committee and that he is
"independent," as defined by Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
AUDIT FEES
(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are $0
for 2006 and $28,000 for 2007.
AUDIT-RELATED FEES
(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this
Item are $0 for 2006 and $0 for 2007.
TAX FEES
(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $0 for 2006 and $0 for
2007.
ALL OTHER FEES
(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are
$0 for 2006 and $0 for 2007.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
Pre-Approval Policies and Procedures. The Audit Committee
("Committee") of the registrant is responsible for pre-approving (i)
all audit and permissible non-audit services to be provided by the
independent auditors to the registrant and (ii) all permissible
non-audit services to be provided by the independent auditors to the
Adviser, Gabelli Funds, LLC, and any affiliate of Gabelli Funds, LLC
("Gabelli") that provides services to the registrant (a "Covered
Services Provider") if the independent auditors' engagement related
directly to the operations and financial reporting of the registrant.
The Committee may delegate its responsibility to pre-approve any such
audit and permissible non-audit services to the Chairperson of the
Committee, and the Chairperson must report to the Committee, at its
next regularly scheduled meeting after the Chairperson's pre-approval
of such services, his or her decision(s). The Committee may also
establish detailed pre-approval policies and procedures for
pre-approval of such services in accordance with applicable laws,
including the delegation of some or all of the Committee's
pre-approval responsibilities to the other persons (other than Gabelli
or the registrant's officers). Pre-approval by the Committee of any
permissible non-audit services is not required so long as: (i) the
permissible non-audit services were not recognized by the registrant
at the time of the engagement to be non-audit services; and (ii) such
services are promptly brought to the attention of the Committee and
approved by the Committee or Chairperson prior to the completion of
the audit.
(e)(2) The percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are
as follows:
(b) Not applicable
(c) Not applicable
(d) Not applicable
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was zero percent (0%).
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen
by another investment adviser), and any entity controlling, controlled
by, or under common control with the adviser that provides ongoing
services to the registrant for each of the last two fiscal years of
the registrant was $0 for 2006 and $65,000 for 2007.
(h) The registrant's audit committee of the board of directors has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant has a separately designated audit committee consisting of the
following members: Vincent D. Enright, Clarence Davis and Salvatore J. Zizza.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The Proxy Voting Policies are attached herewith.
THE VOTING OF PROXIES ON BEHALF OF CLIENTS
Rules 204(4)-2 and 204-2 under the Investment Advisers Act of 1940 and
Rule 30b1-4 under the Investment Company Act of 1940 require investment advisers
to adopt written policies and procedures governing the voting of proxies on
behalf of their clients.
These procedures will be used by GAMCO Asset Management Inc., Gabelli
Funds, LLC, Gabelli Securities, Inc., and Teton Advisors, Inc. (collectively,
the "Advisers") to determine how to vote proxies relating to portfolio
securities held by their clients, including the procedures that the Advisers use
when a vote presents a conflict between the interests of the shareholders of an
investment company managed by one of the Advisers, on the one hand, and those of
the Advisers; the principal underwriter; or any affiliated person of the
investment company, the Advisers, or the principal underwriter. These procedures
will not apply where the Advisers do not have voting discretion or where the
Advisers have agreed to with a client to vote the client's proxies in accordance
with specific guidelines or procedures supplied by the client (to the extent
permitted by ERISA).
I. PROXY VOTING COMMITTEE
The Proxy Voting Committee was originally formed in April 1989 for the
purpose of formulating guidelines and reviewing proxy statements within the
parameters set by the substantive proxy voting guidelines originally published
in 1988 and updated periodically, a copy of which are appended as Exhibit A. The
Committee will include representatives of Research, Administration, Legal, and
the Advisers. Additional or replacement members of the Committee will be
nominated by the Chairman and voted upon by the entire Committee.
Meetings are held as needed basis to form views on the manner in which
the Advisers should vote proxies on behalf of their clients.
In general, the Director of Proxy Voting Services, using the Proxy
Guidelines, recommendations of Institutional Shareholder Corporate Governance
Service ("ISS"), other third-party services and the analysts of Gabelli &
Company, Inc., will determine how to vote on each issue. For non-controversial
matters, the Director of Proxy Voting Services may vote the proxy if the vote is
(1) consistent with the recommendations of the issuer's Board of Directors and
not contrary to the Proxy Guidelines; (2) consistent with the recommendations of
the issuer's Board of Directors and is a non-controversial issue not covered by
the Proxy Guidelines; or (3) the vote is contrary to the recommendations of the
Board of Directors but is consistent with the Proxy Guidelines. In those
instances, the Director of Proxy Voting Services or the Chairman of the
Committee may sign and date the proxy statement indicating how each issue will
be voted.
All matters identified by the Chairman of the Committee, the Director
of Proxy Voting Services or the Legal Department as controversial, taking into
account the recommendations of ISS or other third party services and the
analysts of Gabelli & Company, Inc., will be presented to the Proxy Voting
Committee. If the Chairman of the Committee, the Director of Proxy Voting
Services or the Legal Department has identified the matter as one that (1) is
controversial; (2) would benefit from deliberation by the Proxy Voting
Committee; or (3) may give rise to a conflict of interest between the Advisers
and their clients, the Chairman of the Committee will initially determine what
vote to recommend that the Advisers should cast and the matter will go before
the Committee.
A. CONFLICTS OF INTEREST.
The Advisers have implemented these proxy voting procedures in
order to prevent conflicts of interest from influencing their
proxy voting decisions. By following the Proxy Guidelines, as
well as the recommendations of ISS, other third-party services
and the analysts of Gabelli & Company, the Advisers are able
to avoid, wherever possible, the influence of potential
conflicts of interest. Nevertheless, circumstances may arise
in which one or more of the Advisers are faced with a conflict
of interest or the appearance of a conflict of interest in
connection with its vote. In general, a conflict of interest
may arise when an Adviser knowingly does business with an
issuer, and may appear to have a material conflict between its
own interests and the interests of the shareholders of an
investment company managed by one of the Advisers regarding
how the proxy is to be voted. A conflict also may exist when
an Adviser has actual knowledge of a material business
arrangement between an issuer and an affiliate of the Adviser.
In practical terms, a conflict of interest may arise, for
example, when a proxy is voted for a company that is a client
of one of the Advisers, such as GAMCO Asset Management Inc. A
conflict also may arise when a client of one of the Advisers
has made a shareholder proposal in a proxy to be voted upon by
one or more of the Advisers. The Director of Proxy Voting
Services, together with the Legal Department, will scrutinize
all proxies for these or other situations that may give rise
to a conflict of interest with respect to the voting of
proxies.
B. OPERATION OF PROXY VOTING COMMITTEE
For matters submitted to the Committee, each member of the
Committee will receive, prior to the meeting, a copy of the
proxy statement, any relevant third party research, a summary
of any views provided by the Chief Investment Officer and any
recommendations by Gabelli & Company, Inc. analysts. The Chief
Investment Officer or the Gabelli & Company, Inc. analysts may
be invited to present their viewpoints. If the Director of
Proxy Voting Services or the Legal Department believe that the
matter before the committee is one with respect to which a
conflict of interest may exist between the Advisers and their
clients, counsel will provide an opinion to the Committee
concerning the conflict. If the matter is one in which the
interests of the clients of one or more of Advisers may
diverge, counsel will so advise and the Committee may make
different recommendations as to different clients. For any
matters where the recommendation may trigger appraisal rights,
counsel will provide an opinion concerning the likely risks
and merits of such an appraisal action.
Each matter submitted to the Committee will be determined by the vote
of a majority of the members present at the meeting. Should the vote concerning
one or more recommendations be tied in a vote of the Committee, the Chairman of
the Committee will cast the deciding vote. The Committee will notify the proxy
department of its decisions and the proxies will be voted accordingly.
Although the Proxy Guidelines express the normal preferences for the
voting of any shares not covered by a contrary investment guideline provided by
the client, the Committee is not bound by the preferences set forth in the Proxy
Guidelines and will review each matter on its own merits. Written minutes of all
Proxy Voting Committee meetings will be maintained. The Advisers subscribe to
ISS, which supplies current information on companies, matters being voted on,
regulations, trends in proxy voting and information on corporate governance
issues.
If the vote cast either by the analyst or as a result of the
deliberations of the Proxy Voting Committee runs contrary to the recommendation
of the Board of Directors of the issuer, the matter will be referred to legal
counsel to determine whether an amendment to the most recently filed Schedule
13D is appropriate.
II. SOCIAL ISSUES AND OTHER CLIENT GUIDELINES
If a client has provided special instructions relating to the voting of
proxies, they should be noted in the client's account file and forwarded to the
proxy department. This is the responsibility of the investment professional or
sales assistant for the client. In accordance with Department of Labor
guidelines, the Advisers' policy is to vote on behalf of ERISA accounts in the
best interest of the plan participants with regard to social issues that carry
an economic impact. Where an account is not governed by ERISA, the Advisers will
vote shares held on behalf of the client in a manner consistent with any
individual investment/voting guidelines provided by the client. Otherwise the
Advisers will abstain with respect to those shares.
III. CLIENT RETENTION OF VOTING RIGHTS
If a client chooses to retain the right to vote proxies or if there is
any change in voting authority, the following should be notified by the
investment professional or sales assistant for the client.
- Operations
- Legal Department
- Proxy Department
- Investment professional assigned to the account
In the event that the Board of Directors (or a Committee thereof) of
one or more of the investment companies managed by one of the Advisers has
retained direct voting control over any security, the Proxy Voting Department
will provide each Board Member (or Committee member) with a copy of the proxy
statement together with any other relevant information including recommendations
of ISS or other third-party services.
IV. VOTING RECORDS
The Proxy Voting Department will retain a record of matters voted upon
by the Advisers for their clients. The Advisers will supply information on how
an account voted its proxies upon request.
A letter is sent to the custodians for all clients for which the
Advisers have voting responsibility instructing them to forward all proxy
materials to:
[Adviser name]
Attn: Proxy Voting Department
One Corporate Center
Rye, New York 10580-1433
The sales assistant sends the letters to the custodians along with the
trading/DTC instructions. Proxy voting records will be retained in compliance
with Rule 204-2 under the Investment Advisers Act.
V. VOTING PROCEDURES
1. Custodian banks, outside brokerage firms and clearing firms are responsible
for forwarding proxies directly to the Advisers.
Proxies are received in one of two forms:
o Shareholder Vote Authorization Forms ("VAFs") - Issued by Broadridge
Financial Solutions, Inc. ("Broadridge") VAFs must be voted through the
issuing institution causing a time lag. Broadridge is an outside service
contracted by the various institutions to issue proxy materials.
o Proxy cards which may be voted directly.
2. Upon receipt of the proxy, the number of shares each form represents is
logged into the proxy system according to security.
3. In the case of a discrepancy such as an incorrect number of shares, an
improperly signed or dated card, wrong class of security, etc., the issuing
custodian is notified by phone. A corrected proxy is requested. Any arrangements
are made to insure that a proper proxy is received in time to be voted
(overnight delivery, fax, etc.). When securities are out on loan on record date,
the custodian is requested to supply written verification.
4. Upon receipt of instructions from the proxy committee (see Administrative),
the votes are cast and recorded for each account on an individual basis.
Records have been maintained on the Proxy Edge system. The system is backed up
regularly.
Proxy Edge records include:
Security Name and Cusip Number
Date and Type of Meeting (Annual, Special, Contest)
Client Name
Adviser or Fund Account Number
Directors' Recommendation
How GAMCO voted for the client on each issue
5. VAFs are kept alphabetically by security. Records for the current proxy
season are located in the Proxy Voting Department office. In preparation for the
upcoming season, files are transferred to an offsite storage facility during
January/February.
6. Shareholder Vote Authorization Forms issued by Broadridge are always sent
directly to a specific individual at Broadridge.
7. If a proxy card or VAF is received too late to be voted in the conventional
matter, every attempt is made to vote on one of the following manners:
o VAFs can be faxed to Broadridge up until the time of the meeting. This is
followed up by mailing the original form.
o When a solicitor has been retained, the solicitor is called. At the
solicitor's direction, the proxy is faxed.
8. In the case of a proxy contest, records are maintained for each opposing
entity.
9. Voting in Person
a) At times it may be necessary to vote the shares in person. In this case, a
"legal proxy" is obtained in the following manner:
o Banks and brokerage firms using the services at Broadridge:
The back of the VAF is stamped indicating that we wish to vote in person.
The forms are then sent overnight to Broadridge. Broadridge issues individual
legal proxies and sends them back via overnight (or the Adviser can pay
messenger charges). A lead-time of at least two weeks prior to the meeting is
needed to do this. Alternatively, the procedures detailed below for banks not
using Broadridge may be implemented.
o Banks and brokerage firms issuing proxies directly:
The bank is called and/or faxed and a legal proxy is requested.
All legal proxies should appoint:
"REPRESENTATIVE OF [ADVISER NAME] WITH FULL POWER OF SUBSTITUTION."
b) The legal proxies are given to the person attending the meeting along with
the following supplemental material:
o A limited Power of Attorney appointing the attendee an Adviser
representative.
o A list of all shares being voted by custodian only. Client names and account
numbers are not included. This list must be presented, along with the
proxies, to the Inspectors of Elections and/or tabulator at least one-half
hour prior to the scheduled start of the meeting. The tabulator must
"qualify" the votes (i.e. determine if the vote have previously been cast, if
the votes have been rescinded, etc. vote have previously been cast, etc.).
o A sample ERISA and Individual contract.
o A sample of the annual authorization to vote proxies form.
o A copy of our most recent Schedule 13D filing (if applicable).
APPENDIX A
PROXY GUIDELINES
PROXY VOTING GUIDELINES
GENERAL POLICY STATEMENT
It is the policy of GAMCO INVESTORS, INC. to vote in the best economic interests
of our clients. As we state in our Magna Carta of Shareholders Rights,
established in May 1988, we are neither FOR nor AGAINST management. We are for
shareholders.
At our first proxy committee meeting in 1989, it was decided that each proxy
statement should be evaluated on its own merits within the framework first
established by our Magna Carta of Shareholders Rights. The attached guidelines
serve to enhance that broad framework.
We do not consider any issue routine. We take into consideration all of our
research on the company, its directors, and their short and long-term goals for
the company. In cases where issues that we generally do not approve of are
combined with other issues, the negative aspects of the issues will be factored
into the evaluation of the overall proposals but will not necessitate a vote in
opposition to the overall proposals.
BOARD OF DIRECTORS
The advisers do not consider the election of the Board of Directors a routine
issue. Each slate of directors is evaluated on a case-by-case basis.
Factors taken into consideration include:
o Historical responsiveness to shareholders
This may include such areas as:
-Paying greenmail
-Failure to adopt shareholder resolutions receiving a majority of
shareholder votes
o Qualifications
o Nominating committee in place
o Number of outside directors on the board
o Attendance at meetings
o Overall performance
SELECTION OF AUDITORS
In general, we support the Board of Directors' recommendation for auditors.
BLANK CHECK PREFERRED STOCK
We oppose the issuance of blank check preferred stock.
Blank check preferred stock allows the company to issue stock and establish
dividends, voting rights, etc. without further shareholder approval.
CLASSIFIED BOARD
A classified board is one where the directors are divided into classes with
overlapping terms. A different class is elected at each annual meeting.
While a classified board promotes continuity of directors facilitating long
range planning, we feel directors should be accountable to shareholders on an
annual basis. We will look at this proposal on a case-by-case basis taking into
consideration the board's historical responsiveness to the rights of
shareholders.
Where a classified board is in place we will generally not support attempts to
change to an annually elected board.
When an annually elected board is in place, we generally will not support
attempts to classify the board.
INCREASE AUTHORIZED COMMON STOCK
The request to increase the amount of outstanding shares is considered on a
case-by-case basis.
Factors taken into consideration include:
o Future use of additional shares
-Stock split
-Stock option or other executive compensation plan
-Finance growth of company/strengthen balance sheet
-Aid in restructuring
-Improve credit rating
-Implement a poison pill or other takeover defense
o Amount of stock currently authorized but not yet issued or reserved for
stock option plans
o Amount of additional stock to be authorized and its dilutive effect
We will support this proposal if a detailed and verifiable plan for the use of
the additional shares is contained in the proxy statement.
CONFIDENTIAL BALLOT
We support the idea that a shareholder's identity and vote should be treated
with confidentiality.
However, we look at this issue on a case-by-case basis.
In order to promote confidentiality in the voting process, we endorse the use of
independent Inspectors of Election.
CUMULATIVE VOTING
In general, we support cumulative voting.
Cumulative voting is a process by which a shareholder may multiply the number of
directors being elected by the number of shares held on record date and cast the
total number for one candidate or allocate the voting among two or more
candidates.
Where cumulative voting is in place, we will vote against any proposal to
rescind this shareholder right.
Cumulative voting may result in a minority block of stock gaining representation
on the board. When a proposal is made to institute cumulative voting, the
proposal will be reviewed on a case-by-case basis. While we feel that each board
member should represent all shareholders, cumulative voting provides minority
shareholders an opportunity to have their views represented.
DIRECTOR LIABILITY AND INDEMNIFICATION
We support efforts to attract the best possible directors by limiting the
liability and increasing the indemnification of directors, except in the case of
insider dealing.
EQUAL ACCESS TO THE PROXY
The SEC's rules provide for shareholder resolutions. However, the resolutions
are limited in scope and there is a 500 word limit on proponents' written
arguments. Management has no such limitations. While we support equal access to
the proxy, we would look at such variables as length of time required to
respond, percentage of ownership, etc.
FAIR PRICE PROVISIONS
Charter provisions requiring a bidder to pay all shareholders a fair price are
intended to prevent two-tier tender offers that may be abusive. Typically, these
provisions do not apply to board-approved transactions.
We support fair price provisions because we feel all shareholders should be
entitled to receive the same benefits.
Reviewed on a case-by-case basis.
GOLDEN PARACHUTES
Golden parachutes are severance payments to top executives who are terminated or
demoted after a takeover.
We support any proposal that would assure management of its own welfare so that
they may continue to make decisions in the best interest of the company and
shareholders even if the decision results in them losing their job. We do not,
however, support excessive golden parachutes. Therefore, each proposal will be
decided on a case-by-case basis.
NOTE: CONGRESS HAS IMPOSED A TAX ON ANY PARACHUTE THAT IS MORE THAN THREE TIMES
THE EXECUTIVE'S AVERAGE ANNUAL COMPENSATION.
ANTI-GREENMAIL PROPOSALS
We do not support greenmail. An offer extended to one shareholder should be
extended to all shareholders equally across the board.
LIMIT SHAREHOLDERS' RIGHTS TO CALL SPECIAL MEETINGS
We support the right of shareholders to call a special meeting.
CONSIDERATION OF NONFINANCIAL EFFECTS OF A MERGER
This proposal releases the directors from only looking at the financial effects
of a merger and allows them the opportunity to consider the merger's effects on
employees, the community, and consumers.
As a fiduciary, we are obligated to vote in the best economic interests of our
clients. In general, this proposal does not allow us to do that. Therefore, we
generally cannot support this proposal.
Reviewed on a case-by-case basis.
MERGERS, BUYOUTS, SPIN-OFFS, RESTRUCTURINGS
Each of the above is considered on a case-by-case basis. According to the
Department of Labor, we are not required to vote for a proposal simply because
the offering price is at a premium to the current market price. We may take into
consideration the long term interests of the shareholders.
MILITARY ISSUES
Shareholder proposals regarding military production must be evaluated on a
purely economic set of criteria for our ERISA clients. As such, decisions will
be made on a case-by-case basis.
In voting on this proposal for our non-ERISA clients, we will vote according to
the client's direction when applicable. Where no direction has been given, we
will vote in the best economic interests of our clients. It is not our duty to
impose our social judgment on others.
NORTHERN IRELAND
Shareholder proposals requesting the signing of the MacBride principles for the
purpose of countering the discrimination of Catholics in hiring practices must
be evaluated on a purely economic set of criteria for our ERISA clients. As
such, decisions will be made on a case-by-case basis.
In voting on this proposal for our non-ERISA clients, we will vote according to
client direction when applicable. Where no direction has been given, we will
vote in the best economic interests of our clients. It is not our duty to impose
our social judgment on others.
OPT OUT OF STATE ANTI-TAKEOVER LAW
This shareholder proposal requests that a company opt out of the coverage of the
state's takeover statutes. Example: Delaware law requires that a buyer must
acquire at least 85% of the company's stock before the buyer can exercise
control unless the board approves.
We consider this on a case-by-case basis. Our decision will be based on the
following:
o State of Incorporation
o Management history of responsiveness to shareholders
o Other mitigating factors
POISON PILL
In general, we do not endorse poison pills.
In certain cases where management has a history of being responsive to the needs
of shareholders and the stock is very liquid, we will reconsider this position.
REINCORPORATION
Generally, we support reincorporation for well-defined business reasons. We
oppose reincorporation if proposed solely for the purpose of reincorporating in
a state with more stringent anti-takeover statutes that may negatively impact
the value of the stock.
STOCK OPTION PLANS
Stock option plans are an excellent way to attract, hold and motivate directors
and employees. However, each stock option plan must be evaluated on its own
merits, taking into consideration the following:
o Dilution of voting power or earnings per share by more than 10%
o Kind of stock to be awarded, to whom, when and how much
o Method of payment
o Amount of stock already authorized but not yet issued under existing
stock option plans
SUPERMAJORITY VOTE REQUIREMENTS
Supermajority vote requirements in a company's charter or bylaws require a level
of voting approval in excess of a simple majority of the outstanding shares. In
general, we oppose supermajority-voting requirements. Supermajority requirements
often exceed the average level of shareholder participation. We support
proposals' approvals by a simple majority of the shares voting.
LIMIT SHAREHOLDERS RIGHT TO ACT BY WRITTEN CONSENT
Written consent allows shareholders to initiate and carry on a shareholder
action without having to wait until the next annual meeting or to call a special
meeting. It permits action to be taken by the written consent of the same
percentage of the shares that would be required to effect proposed action at a
shareholder meeting.
Reviewed on a case-by-case basis.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
PORTFOLIO MANAGER
-----------------
Mr. Mario J. Gabelli, CFA, is primarily responsible for the day-to-day
management of The Gabelli Global Deal Fund, (the Fund). Mr. Gabelli has served
as Chairman, Chief Executive Officer, and Chief Investment Officer -Value
Portfolios of GAMCO Investors, Inc. and its affiliates since their organization.
MANAGEMENT OF OTHER ACCOUNTS
----------------------------
The table below shows the number of other accounts managed by Mario J. Gabelli
and the total assets in each of the following categories: registered investment
companies, other paid investment vehicles and other accounts. For each category,
the table also shows the number of accounts and the total assets in the accounts
with respect to which the advisory fee is based on account performance.
------------------------- ------------------- ------------------- -------------- ----------------- ----------------
Total Assets
No. of Accounts in Accounts
Name of Portfolio Total where Advisory where Advisory
Manager or Type of No. of Accounts Total Fee is Based on Fee is Based
Team Member Accounts Managed Assets Performance on Performance
------------------------- ------------------- ------------------- -------------- ----------------- ----------------
1. Mario J. Gabelli Registered 23 $15.5B 6 $5.2B
Investment
Companies:
------------------------- ------------------- ------------------- -------------- ----------------- ----------------
Other Pooled 12 $269.6M 11 $188.6M
Investment
Vehicles:
------------------------- ------------------- ------------------- -------------- ----------------- ----------------
Other Accounts: 1991 $10.6B 6 $1.6B
------------------------- ------------------- ------------------- -------------- ----------------- ----------------
POTENTIAL CONFLICTS OF INTEREST
-------------------------------
As reflected above, Mr. Gabelli manages accounts in addition to the Fund. Actual
or apparent conflicts of interest may arise when a Portfolio Manager also has
day-to-day management responsibilities with respect to one or more other
accounts. These potential conflicts include:
ALLOCATION OF LIMITED TIME AND ATTENTION. As indicated above, Mr. Gabelli
manages multiple accounts. As a result, he will not be able to devote all of his
time to management of the Fund. Mr. Gabelli, therefore, may not be able to
formulate as complete a strategy or identify equally attractive investment
opportunities for each of those accounts as might be the case if he were to
devote all of his attention to the management of only the Fund.
ALLOCATION OF LIMITED INVESTMENT OPPORTUNITIES. As indicated above, Mr. Gabelli
manages managed accounts with investment strategies and/or policies that are
similar to the Fund. In these cases, if the he identifies an investment
opportunity that may be suitable for multiple accounts, a Fund may not be able
to take full advantage of that opportunity because the opportunity may be
allocated among all or many of these accounts or other accounts managed
primarily by other Portfolio Managers of the Adviser, and their affiliates. In
addition, in the event Mr. Gabelli determines to purchase a security for more
than one account in an aggregate amount that may influence the market price of
the security, accounts that purchased or sold the security first may receive a
more favorable price than accounts that made subsequent transactions.
SELECTION OF BROKER/DEALERS. Because of Mr. Gabelli's position with the
Distributor and his indirect majority ownership interest in the Distributor, he
may have an incentive to use the Distributor to execute portfolio transactions
for a Fund.
PURSUIT OF DIFFERING STRATEGIES. At times, Mr. Gabelli may determine that an
investment opportunity may be appropriate for only some of the accounts for
which he exercises investment responsibility, or may decide that certain of the
funds or accounts should take differing positions with respect to a particular
security. In these cases, he may execute differing or opposite transactions for
one or more accounts which may affect the market price of the security or the
execution of the transaction, or both, to the detriment of one or more other
accounts.
VARIATION IN COMPENSATION. A conflict of interest may arise where the financial
or other benefits available to Mr. Gabelli differ among the accounts that he
manages. If the structure of the Adviser's management fee or the Portfolio
Manager's compensation differs among accounts (such as where certain accounts
pay higher management fees or performance-based management fees), the Portfolio
Manager may be motivated to favor certain accounts over others. The Portfolio
Manager also may be motivated to favor accounts in which he has an investment
interest, or in which the Adviser, or their affiliates have investment
interests. Similarly, the desire to maintain assets under management or to
enhance a Portfolio Manager's performance record or to derive other rewards,
financial or otherwise, could influence the Portfolio Manager in affording
preferential treatment to those accounts that could most significantly benefit
the Portfolio Manager. For example, as reflected above, if Mr. Gabelli manages
accounts which have performance fee arrangements, certain portions of his
compensation will depend on the achievement of performance milestones on those
accounts. Mr. Gabelli could be incented to afford preferential treatment to
those accounts and thereby by subject to a potential conflict of interest.
The Adviser, and the Funds have adopted compliance policies and procedures that
are designed to address the various conflicts of interest that may arise for the
Adviser and their staff members. However, there is no guarantee that such
policies and procedures will be able to detect and prevent every situation in
which an actual or potential conflict may arise.
COMPENSATION STRUCTURE FOR MARIO J. GABELLI
-------------------------------------------
Mr. Gabelli receives incentive-based variable compensation based on a percentage
of net revenues received by the Adviser for managing the Fund. Net revenues are
determined by deducting from gross investment management fees the firm's
expenses (other than Mr. Gabelli's compensation) allocable to this Fund. Five
closed-end registered investment companies managed by Mr. Gabelli have
arrangements whereby the Adviser will only receive its investment advisory fee
attributable to the liquidation value of outstanding preferred stock (and Mr.
Gabelli would only receive his percentage of such advisory fee) if certain
performance levels are met. Additionally, he receives similar incentive based
variable compensation for managing other accounts within the firm and its
affiliates. This method of compensation is based on the premise that superior
long-term performance in managing a portfolio should be rewarded with higher
compensation as a result of growth of assets through appreciation and net
investment activity. The level of compensation is not determined with specific
reference to the performance of any account against any specific benchmark. One
of the other registered investment companies managed by Mr. Gabelli has a
performance (fulcrum) fee arrangement for which his compensation is adjusted up
or down based on the performance of the investment company relative to an index.
Mr. Gabelli manages other accounts with performance fees. Compensation for
managing these accounts has two components. One component is based on a
percentage of net revenues to the investment adviser for managing the account.
The second component is based on absolute performance of the account, with
respect to which a percentage of such performance fee is paid to Mr. Gabelli. As
an executive officer of the Adviser's parent company, GBL, Mr. Gabelli also
receives ten percent of the net operating profits of the parent company. He
receives no base salary, no annual bonus, and no stock options.
OWNERSHIP OF SHARES IN THE FUND
-------------------------------
Mario Gabelli owned over $1,000,000 of the Fund as of December 31, 2007.
(B) Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
REGISTRANT PURCHASES OF EQUITY SECURITIES
============= ========================= ============================= ========================== ===============================
(C) TOTAL NUMBER OF (D) MAXIMUM NUMBER (OR
SHARES (OR UNITS) APPROXIMATE DOLLAR VALUE) OF
(A) TOTAL NUMBER OF PURCHASED AS PART OF SHARES (OR UNITS) THAT MAY
SHARES (OR UNITS) (B) AVERAGE PRICE PAID PER PUBLICLY ANNOUNCED PLANS YET BE PURCHASED UNDER THE
PERIOD PURCHASED SHARE (OR UNIT) OR PROGRAMS PLANS OR PROGRAMS
============= ========================= ============================= ========================== ===============================
Month #1 Common - N/A Common - N/A Common - N/A Common - 21,311,110
07/01/07
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
07/31/07
============= ========================= ============================= ========================== ===============================
Month #2 Common - N/A Common - N/A Common - N/A Common - 21,311,110
08/01/07
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
08/31/07
============= ========================= ============================= ========================== ===============================
Month #3 Common - N/A Common - N/A Common - N/A Common - 21,311,110
09/01/07
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
09/30/07
============= ========================= ============================= ========================== ===============================
Month #4 Common - N/A Common - N/A Common - N/A Common - 21,311,110
10/01/07
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
10/31/07
============= ========================= ============================= ========================== ===============================
Month #5 Common - 10,500 Common - $16.5523 Common - 10,500 Common - 21,311,110 - 10,500
11/01/07 = 21,300,610
through
11/30/07 Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
============= ========================= ============================= ========================== ===============================
Month #6 Common - N/A Common - N/A Common - N/A Common - 21,300,610
12/01/07
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
12/31/07
============= ========================= ============================= ========================== ===============================
Total Common - 10,500 Common - $16.5523 Common - 10,500 N/A
Preferred - N/A Preferred - N/A Preferred - N/A
============= ========================= ============================= ========================== ===============================
Footnote columns (c) and (d) of the table, by disclosing the following
information in the aggregate for all plans or programs publicly announced:
a. The date each plan or program was announced - The notice of the potential
repurchase of common and preferred shares occurs quarterly in the Fund's
quarterly report in accordance with Section 23(c) of the Investment Company
Act of 1940, as amended.
b. The dollar amount (or share or unit amount) approved - Any or all common
shares outstanding may be repurchased when the Fund's common shares are
trading at a discount of 7.5% or more from the net asset value of the
shares.
Any or all preferred shares outstanding may be repurchased when the Fund's
preferred shares are trading at a discount to the liquidation value of
$25.00.
c. The expiration date (if any) of each plan or program - The Fund's
repurchase plans are ongoing.
d. Each plan or program that has expired during the period covered by the
table - The Fund's repurchase plans are ongoing.
e. Each plan or program the registrant has determined to terminate prior to
expiration, or under which the registrant does not intend to make further
purchases. - The Fund's repurchase plans are ongoing.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's Board of Directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these
controls and procedures required by Rule 30a-3(b) under the 1940 Act
(17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) The Gabelli Global Deal Fund
--------------------------------------------------------------------
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date 03/07/08
----------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date 03/07/08
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady, Principal Financial Officer and
Treasurer
Date 03/07/08
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.