Original GBL Prospectus - Gabelli

RISK FACTORS
In addition to the other information contained in this Prospectus, prospective investors should consider
carefully the following factors relating to the Company and the Class A Common Stock before making an
investment in the Class A Common Stock oÅered by this Prospectus.
Control by Mr. Gabelli; ConÖicts of Interest
Upon completion of the OÅering, Mr. Gabelli, through his approximately two-thirds ownership of GFI,
will beneÑcially own all of the Company's outstanding Class B Common Stock, representing approximately
97.6% of the combined voting power of all classes of voting stock of the Company (97.2% if the Underwriters'
over-allotment option is exercised in full). As long as Mr. Gabelli indirectly beneÑcially owns a majority of the
combined voting power of the Common Stock, he will have the ability to elect all of the members of the Board
of Directors and thereby control the management and aÅairs of the Company, including determinations with
respect to acquisitions, dispositions, borrowings, issuances of Common Stock or other securities of the
Company, and the declaration and payment of dividends on the Common Stock. In addition, Mr. Gabelli will
be able to determine the outcome of matters submitted to a vote of the Company's shareholders for approval
and will be able to cause or prevent a change in control of the Company. As a result of Mr. Gabelli's control of
the Company, none of the Company's agreements with Mr. Gabelli and other companies controlled by him
have been arrived at through ""arm's-length'' negotiations, although the Company believes that the parties
endeavored to implement market-based terms. There can be no assurance that the Company would not have
received more favorable terms from an unaÇliated party. See ""Certain Relationships and Related
Transactions.''
In order to minimize conÖicts and potential competition with the Company's investment management
business, Mr. Gabelli has entered into a written agreement to limit his activities outside of the Company.
Mr. Gabelli has undertaken that so long as he is associated with the Company or for a period of Ñve years from
the consummation of the OÅering, whichever is longer, he shall not provide investment management services
for compensation other than in his capacity as an oÇcer or employee of the Company except for (a) those
investment funds and accounts currently managed by Mr. Gabelli outside the Company under performance
fee arrangements, but only to the extent that any such investment fund or account consists solely of one or
more of the persons who were investors as of the date of the consummation of the OÅering and (b) successor
funds and accounts which serve no investors other than those in the funds and accounts referred to in clause
(a) or those investors' successors, heirs, donees or immediate families, which funds and accounts operate
according to an investment style similar to such other accounts or funds, which style is not used at the
Company as of the date of consummation of the OÅering, and which are subject to performance fee
arrangements. References to the ""Permissible Accounts'' mean the funds and accounts managed outside the
Company which are permitted under the agreement described above in this paragraph. To the extent that such
activities are not prohibited under the foregoing agreement, Mr. Gabelli intends to continue devoting time to
activities outside the Company, including managing his own assets and his family's assets, managing or
controlling companies in other industries and managing assets for other investors through the Permissible
Accounts (approximately $110 million as of September 30, 1998). These activities may present conÖicts of
interest or compete with the Company. The CertiÑcate of Incorporation of the Company expressly provides in
general that Mr. Gabelli, members of his immediate family who are oÇcers or directors of the Company and
entities controlled by such persons have an obligation to present corporate opportunities to the Company and
resolve conÖicts of interest through one of the processes described in the CertiÑcate of Incorporation, which
include independent director or independent shareholder approval. See ""Description of Capital Stock Ì
CertiÑcate of Incorporation and Bylaw Provisions Ì Overview of Corporate Opportunity and ConÖict of
Interest Policies.'' As of the date of the consummation of the OÅering, it is expected that there will be no
members of Mr. Gabelli's immediate family who are oÇcers or directors of the Company.
The Company will not derive any income from activities outside the Company by Mr. Gabelli or
members of his immediate family who are oÇcers or directors of the Company and may not be able to take
advantage of business and investment opportunities that could later prove to be beneÑcial to the Company and
its shareholders, either because such opportunities were not Company opportunities at the time they arose or
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