nvq
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
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: March 31, 2010
Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q 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 the 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. § 3507.
 
 

 


 

Item 1. Schedule of Investments.
The Schedule(s) of Investments is attached herewith.
     
The Gabelli Global Deal Fund
  (PHOTO OF MARIO J. GABELLI, CFA)
First Quarter Report
March 31, 2010
 
   
To Our Shareholders,
     The Gabelli Global Deal Fund’s (the “Fund”) net asset value (“NAV”) total return was 0.7% during the first quarter of 2010, compared with a gain of 0.01% and 5.4% for the 3 Month U.S. Treasury Bill Index and the Standard & Poor’s (“S&P”) 500 Index, respectively. The total return for the Fund’s publicly traded shares was (0.8)% during the first quarter.
    Enclosed is the investment portfolio as of March 31, 2010.
Comparative Results
Average Annual Returns through March 31, 2010 (a) (Unaudited)
                                 
                            Since
                            Inception
    Quarter   1 Year   3 Year   (01/31/07)
Gabelli Global Deal Fund
                               
NAV Total Return(b)
    0.69 %     8.83 %     1.64 %     1.77 %
Investment Total Return (c)
    (0.83 )     24.29       (1.59 )     (2.20 )
3 Month U.S. Treasury Bill Index
    0.01       0.17       1.98       2.15  
S&P 500 Index
    5.39       49.73       (4.16 )     (4.21 )
 
(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. 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. Performance returns for periods of less than one year are not annualized. 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 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.
We have separated the portfolio manager’s commentary from the financial statements and investment portfolio due to corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the content of the portfolio manager’s commentary is unrestricted. The financial statements and investment portfolio are mailed separately from the commentary. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com.

 


 

THE GABELLI GLOBAL DEAL FUND
SCHEDULE OF INVESTMENTS
March 31, 2010 (Unaudited)
                 
            Market  
Shares         Value  
       
COMMON STOCKS — 42.8%
       
       
Aerospace and Defense — 0.2%
       
  93,000    
The Allied Defense Group Inc.† .
  $ 670,530  
  15,000    
VT Group plc
    170,718  
       
 
     
       
 
    841,248  
       
 
     
       
Agriculture — 0.0%
       
  2,000    
Terra Industries Inc.
    91,520  
       
 
     
       
Business Services — 4.4%
       
  8,000    
Acxiom Corp.†
    143,520  
  788,400    
AMICAS Inc.†
    4,746,168  
  330,000    
Bowne & Co. Inc.
    3,682,800  
  90,000    
Clear Channel Outdoor Holdings Inc., Cl. A†
    954,900  
  78,000    
Diebold Inc.
    2,477,280  
  600,000    
Oce NV†
    6,853,508  
  5,000    
ODIM ASA
    37,774  
  6,000    
Riskmetrics Group Inc.†
    135,660  
       
 
     
       
 
    19,031,610  
       
 
     
       
Cable and Satellite — 0.0%
       
  25,000    
Zon Multimedia Servicos de Telecomunicacoes e Multimedia SGPS SA
    128,177  
       
 
     
       
Computer Hardware — 0.3%
       
  36,000    
SanDisk Corp.†
    1,246,680  
       
 
     
        Computer Software and Services — 1.0%
  400,000    
Chordiant Software Inc.†
    2,028,000  
  3,000    
COMSYS IT Partners Inc.†
    52,440  
  18,000    
Mentor Graphics Corp.†
    144,360  
  5,000    
Novell Inc.†
    29,950  
  26,300    
PLATO Learning Inc.†
    146,228  
  49,000    
SkillSoft plc, ADR†
    505,680  
  21,600    
Soapstone Networks Inc.
    16,632  
  90,000    
Yahoo! Inc.†
    1,487,700  
       
 
     
       
 
    4,410,990  
       
 
     
       
Consumer Products — 0.3%
       
  24,000    
Harman International Industries Inc.†
    1,122,720  
  10,000    
Heelys Inc.†
    23,800  
  1,300    
Zareba Systems Inc.†
    11,680  
       
 
     
       
 
    1,158,200  
       
 
     
       
Consumer Services — 0.2%
       
  25,000    
Brink’s Home Security Holdings Inc.†
    1,063,750  
       
 
     
       
Diversified Industrial — 1.1%
       
  2,600    
Bway Holding Co.†
    52,260  
  80,000    
Delta plc
    230,963  
  440,000    
Myers Industries Inc.
    4,611,200  
       
 
     
       
 
    4,894,423  
       
 
     
                 
            Market  
Shares         Value  
       
Educational Services — 0.0%
       
  1,000    
Corinthian Colleges Inc.†
  $ 17,590  
       
 
     
       
Electronics — 1.7%
       
  211,700    
Alliance Semiconductor Corp.†
    35,989  
  103,000    
Bel Fuse Inc., Cl. A
    1,907,560  
  170,000    
Bell Microproducts Inc.†
    1,186,600  
  28,000    
International Rectifier Corp.†
    641,200  
  171,900    
Techwell Inc.†
    3,214,530  
  41,500    
Zygo Corp.†
    383,045  
       
 
     
       
 
    7,368,924  
       
 
     
       
Energy and Utilities — 5.9%
       
  25,000    
Allegheny Energy Inc.
    575,000  
  20,000    
Arrow Energy Ltd.†
    92,316  
  1,000    
BJ Services Co.
    21,400  
  190,000    
CNX Gas Corp.†
    7,229,500  
  30,000    
Constellation Energy Group Inc.
    1,053,300  
  520,000    
Dragon Oil plc†
    3,819,236  
  266,000    
Endesa SA
    7,602,258  
  76,000    
NorthWestern Corp.
    2,037,560  
  100,000    
NRG Energy Inc.†
    2,090,000  
  1,000    
Origin Energy Ltd.
    15,187  
  6,000    
Smith International Inc.
    256,920  
  10,000    
Southwest Water Co.
    104,400  
  100,000    
UTS Energy Corp.†
    239,256  
  100,000    
WesternZagros Resources Ltd.†
    79,752  
       
 
     
       
 
    25,216,085  
       
 
     
       
Entertainment — 1.0%
       
  10,000    
Cedar Fair LP
    119,400  
  1,000    
Lions Gate Entertainment Corp.†
    6,240  
  55,000    
Madison Square Garden Inc., Cl. A†
    1,195,150  
  290,000    
Take-Two Interactive Software Inc.†
    2,856,500  
       
 
     
       
 
    4,177,290  
       
 
     
       
Environmental Services — 0.0%
       
  1,000    
Waste Services Inc.†
    9,890  
       
 
     
       
Equipment and Supplies — 1.3%
       
  35,000    
K-Tron International Inc.† .
    5,248,950  
  5,000    
The Middleby Corp.†
    287,950  
       
 
     
       
 
    5,536,900  
       
 
     
       
Financial Services — 2.1%
       
  120,000    
SLM Corp.†
    1,502,400  
  200,000    
Zenith National Insurance Corp.
    7,664,000  
       
 
     
       
 
    9,166,400  
       
 
     
       
Food and Beverage — 1.5%
       
  160,000    
China Huiyuan Juice Group Ltd.
    114,782  
  150,000    
Diedrich Coffee Inc.†
    5,220,000  
  30,000    
Kraft Foods Inc., Cl. A
    907,200  
  1,000    
Reddy Ice Holdings Inc.†
    4,620  
       
 
     
       
 
    6,246,602  
       
 
     
See accompanying notes to schedule of investments.

2


 

THE GABELLI GLOBAL DEAL FUND
SCHEDULE OF INVESTMENTS (Continued)
March 31, 2010 (Unaudited)
                 
            Market  
Shares         Value  
       
COMMON STOCKS (Continued)
       
       
Health Care — 10.2%
       
  30,000    
Alcon Inc.
  $ 4,846,800  
  19,000    
ArthroCare Corp.†
    564,680  
  3,000    
Biogen Idec Inc.†
    172,080  
  5,000    
Care U.K. plc
    33,935  
  25,000    
Crucell NV, ADR†
    510,000  
  2,000    
Enzon Pharmaceuticals Inc.†
    20,360  
  200,000    
Facet Biotech Corp.†
    5,398,000  
  6,000    
Fresenius Kabi Pharmaceuticals Holding Inc., CVR†
    900  
  44,500    
Indevus Pharmaceuticals Inc., Escrow† (a)
    48,950  
  8,000    
Life Technologies Corp.†
    418,160  
  150,000    
Millipore Corp.†
    15,840,000  
  50,000    
OSI Pharmaceuticals Inc.†
    2,977,500  
  20,000    
Trimeris Inc.†
    49,000  
  252,000    
Varian Inc.†
    13,048,560  
       
 
     
       
 
    43,928,925  
       
 
     
       
Hotels and Gaming — 0.1%
       
  20,000    
Lodgian Inc.†
    50,000  
  34,000    
MGM Mirage†
    408,000  
       
 
     
       
 
    458,000  
       
 
     
       
Machinery — 0.2%
       
  50,000    
Sauer-Danfoss Inc.†
    664,000  
       
 
     
       
Materials — 0.0%
       
  2,000    
CIMPOR — Cimentos de Portugal SGPS SA
    15,114  
  5,000    
Intertape Polymer Group Inc.†
    16,550  
       
 
     
       
 
    31,664  
       
 
     
       
Media — 1.3%
       
  72,000    
APN News & Media Ltd.
    152,623  
  220,000    
Cablevision Systems Corp., Cl. A
    5,310,800  
       
 
     
       
 
    5,463,423  
       
 
     
       
Metals and Mining — 0.1%
       
  28,000    
Camino Mineral Corp.† (a)
    4,411  
  4,000    
Corriente Resources Inc., Cl. A†
    32,295  
  20,000    
Forsys Metals Corp.†
    85,266  
  8,000    
Lonmin plc†
    247,413  
  0 (b)  
Royal Gold Inc.
    2  
  9,000    
Xstrata plc†
    170,513  
       
 
     
       
 
    539,900  
       
 
     
       
Publishing — 0.0%
       
  136,000    
SCMP Group Ltd.
    24,523  
       
 
     
                 
            Market  
Shares         Value  
       
Restaurants — 0.0%
       
  10,000    
CKE Restaurants Inc.
  $ 110,700  
  1,000    
Landry’s Restaurants Inc.†
    17,920  
       
 
     
       
 
    128,620  
       
 
     
       
Semiconductors — 0.1%
       
  33,000    
Emulex Corp.†
    438,240  
  5,000    
White Electronic Designs Corp.†
    35,000  
       
 
     
       
 
    473,240  
       
 
     
       
Specialty Chemicals — 0.6%
       
  1,500    
Airgas Inc.
    95,430  
  35,000    
Ashland Inc.
    1,846,950  
  70,200    
ICO Inc.
    567,216  
       
 
     
       
 
    2,509,596  
       
 
     
       
Telecommunications — 7.3%
       
  1,300,000    
3Com Corp.†
    9,997,000  
  725,000    
Asia Satellite Telecommunications Holdings Ltd.
    1,055,157  
  80,000    
BCE Inc.
    2,348,000  
  62,700    
GVT Holding SA†
    2,032,589  
  5,000    
Iowa Telecommunications Services Inc.
    83,500  
  65,000    
Portugal Telecom SGPS SA
    726,748  
  36,200    
RCN Corp.†
    545,896  
  510,000    
Tandberg ASA
    14,545,194  
       
 
     
       
 
    31,334,084  
       
 
     
       
Transportation — 1.9%
       
  100,000    
Smit International NV
    8,103,947  
       
 
     
       
TOTAL COMMON STOCKS
    184,266,201  
       
 
     
                 
Principal              
Amount              
        CONVERTIBLE CORPORATE BONDS — 0.8%
       
Aerospace — 0.1%
       
$ 500,000    
Gencorp Inc., Sub. Deb. Cv., 4.063%, 12/31/39 (c)
    478,750  
       
 
     
       
Computer Hardware — 0.4%
       
  2,000,000    
SanDisk Corp., Cv., 1.000%, 05/15/13
    1,737,500  
       
 
     
       
Specialty Chemicals — 0.3%
       
  1,300,000    
Ferro Corp., Cv., 6.500%, 08/15/13
    1,257,750  
       
 
     
       
TOTAL CONVERTIBLE CORPORATE BONDS
    3,474,000  
       
 
     
See accompanying notes to schedule of investments.

3


 

THE GABELLI GLOBAL DEAL FUND
SCHEDULE OF INVESTMENTS (Continued)
March 31, 2010 (Unaudited)
                 
Principal         Market  
Amount         Value  
       
CORPORATE BONDS — 0.1%
       
       
Diversified Industrial — 0.0%
       
$ 150,000    
Park-Ohio Industries Inc., Sub. Deb., 8.375%, 11/15/14
  $ 133,125  
       
 
     
       
Energy and Utilities — 0.1%
       
  600,000    
Texas Competitive Electric Holdings Co. LLC, Ser. B (STEP), 10.250%, 11/01/15
    420,000  
       
 
     
       
TOTAL CORPORATE BONDS
    553,125  
       
 
     
 
       
U.S. GOVERNMENT OBLIGATIONS — 56.3%
       
       
U.S. Treasury Bills — 37.6%
       
  161,844,000    
U.S. Treasury Bills,
0.046% to 0.244%††,
04/15/10 to 09/23/10
    161,798,212  
       
 
     
       
U.S. Treasury Cash Management Bills — 18.7%
       
  80,215,000    
U.S. Treasury Cash Management Bills,
0.101% to 0.167%††,
04/01/10 to 07/15/10 (d)
    80,193,612  
       
 
     
       
TOTAL U.S. GOVERNMENT OBLIGATIONS
    241,991,824  
       
 
     
 
TOTAL INVESTMENTS — 100.0%
(Cost $438,838,367)
  $ 430,285,150  
       
 
     
       
Aggregate book cost
  $ 438,838,367  
       
 
     
       
Gross unrealized appreciation
  $ 9,904,162  
       
Gross unrealized depreciation
    (18,457,379 )
       
 
     
       
Net unrealized appreciation/depreciation
  $ (8,553,217 )
       
 
     
                 
            Market  
Shares         Value  
       
COMMON STOCKS SOLD SHORT — (0.1)%
       
       
Energy and Utilities — (0.1)%
       
  3,483    
Schlumberger Ltd.
  $ 221,031  
       
 
     
TOTAL COMMON STOCKS SOLD SHORT
(Total Proceeds $213,082)
$ 221,031  
       
 
     
       
Aggregate proceeds
  $ 213,082  
       
 
     
       
Gross unrealized appreciation
  $  
       
Gross unrealized depreciation
    (7,649 )
       
 
     
       
Net unrealized appreciation/depreciation
  $ (7,649 )
       
 
     
 
(a)   Security fair valued under procedures established by the Board of Trustees. The procedures may include reviewing available financial information about the company and reviewing the valuation of comparable securities and other factors on a regular basis. At March 31, 2010, the market value of the fair valued security amounted to $53,361 or 0.01% of total investments.
 
(b)   Amount is less than 0.1.
 
(c)   Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At March 31, 2010, the market value of the Rule 144A security amounted to $478,750 or 0.11% of total investments.
 
(d)   At March 31, 2010, $1,000,000 of the principal amount was pledged as collateral for common stocks sold short.
 
  Non-income producing security.
 
††   Represents annualized yield at date of purchase.
 
ADR   American Depositary Receipt
 
CVR   Contingent Value Right
 
STEP   Step coupon bond. The rate disclosed is that in effect at March 31, 2010.
                 
    % of        
    Market     Market  
Geographic Diversification   Value     Value  
North America
    87.9 %   $ 378,249,092  
Europe
    10.4       44,729,644  
Africa/Middle East
    0.9       3,819,237  
Latin America
    0.5       2,032,589  
Asia/Pacific
    0.3       1,454,588  
 
           
Total Investments
    100.0 %   $ 430,285,150  
 
           
See accompanying notes to schedule of investments.

4


 

THE GABELLI GLOBAL DEAL FUND
NOTES TO SCHEDULE OF INVESTMENTS (Unaudited)
1. Security Valuation. Portfolio securities listed or traded on a nationally recognized securities exchange or traded in the United States of America 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 Gabelli Funds, LLC (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 sixty 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 sixty 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.
     The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy below:
    Level 1 — quoted prices in active markets for identical securities;
 
    Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and
 
    Level 3 — significant unobservable inputs (including the Fund’s determinations as to the fair value of investments).

5


 

THE GABELLI GLOBAL DEAL FUND
NOTES TO SCHEDULE OF INVESTMENTS (Continued) (Unaudited)
     The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of the Fund’s investments and other financial instruments by inputs used to value the Fund’s investments as of March 31, 2010 is as follows:
                                 
    Valuation Inputs        
    Level 1     Level 2     Level 3     Total  
    Quoted     Other Significant     Significant     Market Value  
    Prices     Observable Inputs     Unobservable Inputs     at 3/31/10  
INVESTMENTS IN SECURITIES:
                               
ASSETS (Market Value):
                               
Common Stocks:
                               
Health Care
  $ 43,879,975     $     $ 48,950     $ 43,928,925  
Metals and Mining
    535,489             4,411       539,900  
Other Industries (a)
    139,797,376                   139,797,376  
 
Total Common Stocks
    184,212,840             53,361       184,266,201  
 
Convertible Corporate Bonds
          3,474,000             3,474,000  
Corporate Bonds
          553,125             553,125  
U.S. Government Obligations
          241,991,824             241,991,824  
 
TOTAL INVESTMENTS IN SECURITIES
  $ 184,212,840     $ 246,018,949     $ 53,361     $ 430,285,150  
 
INVESTMENTS IN SECURITIES:
                               
LIABILITIES (Market Value):
                               
Common Stocks Sold Short (a)
  $ (221,031 )   $     $     $ (221,031 )
 
TOTAL INVESTMENTS IN SECURITIES
  $ (221,031 )   $     $     $ (221,031 )
 
OTHER FINANCIAL INSTRUMENTS:
                               
ASSETS (Unrealized Appreciation):*
                               
EQUITY CONTRACTS
                               
Contract for Difference Swap Agreements
  $     $ 27,792     $     $ 27,792  
LIABILITIES (Unrealized Depreciation): *
                               
EQUITY CONTRACT
                               
Contract for Difference Swap Agreement
  $     $ (33 )   $     $ (33 )
 
TOTAL OTHER FINANCIAL INSTRUMENTS
  $     $ 27,759     $     $ 27,759  
 
 
(a)   Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings.
 
*   Other financial instruments are derivatives not reflected in the Schedule of Investments, such as futures, forwards, and swaps, which are valued at the unrealized appreciation/depreciation of the instrument.

6


 

THE GABELLI GLOBAL DEAL FUND
NOTES TO SCHEDULE OF INVESTMENTS (Continued) (Unaudited)
     The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
                                                                         
                                                                    Net change
                                                                    in unrealized
                                                                    appreciation/
                                                                    depreciation
                            Change in                                   during the
    Balance   Accrued   Realized   unrealized   Net   Transfers   Transfers   Balance   period on Level 3
    as of   discounts/   gain/   appreciation/   purchases/   into   out of   as of   investments held
    12/31/09   (premiums)   (loss)   depreciation   (sales)   Level 3†   Level 3†   3/31/10   at 3/31/10
INVESTMENTS IN SECURITIES:
                                                                       
ASSETS (Market Value):
                                                                       
Common Stocks:
                                                                       
Health Care
  $ 48,950                             $ 48,950      
Metals and Mining
                      (831 )     5,242                   4,411       (831 )
 
TOTAL INVESTMENTS IN SECURITIES
  $ 48,950             $ (831 )   $ 5,242             $ 53,361     $ (831 )
 
 
†    The Fund’s policy is to recognize transfers into and transfers out of Level 3 as of the beginning of the reporting period.
Derivative Financial Instruments.
     The Fund may engage in various portfolio investment strategies by investing in a number of derivative financial instruments for the purpose of increasing the income of the Fund, hedging against changes in the value of its portfolio securities and in the value of securities it intends to purchase, or hedging against a specific transaction with respect to either the currency in which the transaction is denominated or another currency. Investing in certain derivative financial instruments, including participation in the options, futures, or swap markets, entails certain execution, liquidity, hedging, tax, and securities, interest, credit, or currency market risks. Losses may arise if the Adviser’s prediction of movements in the direction of the securities, foreign currency, and interest rate markets is inaccurate. Losses may also arise if the counterparty does not perform its duties under a contract, or that, in the event of default, the Fund may be delayed in or prevented from obtaining payments or other contractual remedies owed to it under derivative contracts. The creditworthiness of the counterparties is closely monitored in order to minimize these risks. Participation in derivative transactions involves investment risks, transaction costs, and potential losses to which the Fund would not be subject absent the use of these strategies. The consequences of these risks, transaction costs, and losses may have a negative impact on the Fund’s ability to pay distributions.
     Swap Agreements. The Fund may enter into equity and contract for difference swap transactions for the purpose of increasing the income of the Fund. The use of swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio security transactions. In a swap, a set of future cash flows is 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. Depending on the general state of short-term interest rates and the returns on the Fund’s portfolio securities at the time a 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.

7


 

THE GABELLI GLOBAL DEAL FUND
NOTES TO SCHEDULE OF INVESTMENTS (Continued) (Unaudited)
     The Fund has entered into equity contract for difference swap agreements with The Goldman Sachs Group, Inc. Details of the swaps at March 31, 2010 are as follows:
                                         
                                    Net Unrealized  
Notional     Equity Security   Interest Rate/   Termination     Appreciation/  
Amount     Received   Equity Security Paid   Date     Depreciation  
 
          Market Value   One Month LIBOR plus 90 bps plus                
 
          Appreciation on:   Market Value Depreciation on:                
$1,059,820
  (340,000 Shares)   Chloride Group plc   Chloride Group plc     6/25/10     $ 23,717  
125,994
  (100,000 Shares)   Gulf Keystone Petroleum Ltd.   Gulf Keystone Petroleum Ltd.     6/25/10       4,075  
5,002
  (1,000 Shares)   J Sainsbury plc   J Sainsbury plc     6/25/10       (33 )
 
                                     
 
                                  $ 27,759  
 
                                     
     The Fund’s volume of activity in equity contract for difference swap agreements during the quarter ended March 31, 2010 had an average monthly notional amount of approximately $1,179,790.
     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, and 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. During the quarter ended March 31, 2010, the Fund had no investments in futures contracts.
     Forward Foreign Exchange Contracts. The Fund may engage in forward foreign exchange contracts for the purpose of 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 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. During the quarter ended March 31, 2010, the Fund had no investments in forward foreign exchange contracts.

8


 

THE GABELLI GLOBAL DEAL FUND
NOTES TO SCHEDULE OF INVESTMENTS (Continued) (Unaudited)
     The following table summarizes the net unrealized appreciation/depreciation of derivatives held at March 31, 2010 by primary risk exposure:
         
    Net Unrealized
    Appreciation/
    (Depreciation)
 
Asset Derivatives:
       
Equity Contracts
  $ 27,792  
 
       
Liability Derivatives:
       
 
Equity Contract
  $ (33 )
3. Tax Information. Under the current tax law, capital losses related to securities and foreign currency realized after October 31 and prior to the Fund’s year end may be treated as occurring on the first day of the following year. For the year ended December 31, 2009, the Fund deferred capital losses of $1,270,277 and currency losses of $59,775.

9


 

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.
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.

10


 

(GRAPHIC)
TRUSTEES AND OFFICERS
THE GABELLI GLOBAL DEAL FUND
One Corporate Center, Rye, NY 10580-1422
Trustees
Mario J. Gabelli, CFA
   Chairman & Chief Executive Officer,
    GAMCO Investors, Inc.
Anthony J. Colavita
   President,
   Anthony J. Colavita, P.C.
James P. Conn
   Former Managing Director &
   Chief Investment Officer,
   Financial Security Assurance Holdings Ltd.
Clarence A. Davis
   Former Chief Executive Officer,
   Nestor, Inc.
Mario d’Urso
   Former Italian Senator
Arthur V. Ferrara
   Former Chairman & Chief Executive Officer,
   Guardian Life Insurance Company of America
Michael J. Melarkey
   Attorney-at-Law,
   Avansino, Melarkey, Knobel & Mulligan
Edward T. Tokar
   Senior Managing Director,
   Beacon Trust Company
Salvatore J. Zizza
   Chairman, Zizza & Co., Ltd.
Officers
Bruce N. Alpert
   President & Acting Treasuer
Carter W. Austin
   Vice President
Peter D. Goldstein
   Chief Compliance Officer & Acting Secretary
Laurissa M. Martire
   Vice President
Agnes Mullady*
   Treasurer & Secretary
Delian Naydenov
   Assistant Vice President & Ombudsman
David I. Schachter
   Vice President
Investment Adviser
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
Custodian
The Bank of New York Mellon
Counsel
Skadden, Arps, Slate, Meagher & Flom LLP
Transfer Agent and Registrar
American Stock Transfer and Trust Company
Stock Exchange Listing
                 
            8.50%
    Common   Preferred
NYSE-Symbol:
  GDL   GDL PrA
Shares Outstanding:
    21,177,810       1,920,242  
 
*   Agnes Mullady is on a leave of absence for a limited period of time.
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 Fund may also, from time to time, purchase its preferred shares in the open market when the preferred shares are trading at a discount to the liquidation value.

 


 

(GRAPHIC)

 


 

Item 2. 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 last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 3. Exhibits.
Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 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 6/1/10
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 & Principal Financial Officer     
 
Date 6/1/10
 
*   Print the name and title of each signing officer under his or her signature.