Original GBL Prospectus - Gabelli

ecause the Company did not pursue them. Where a conÖict of interest involves a transaction between
Mr. Gabelli or members of his immediate family who are oÇcers or directors of the Company or their
aÇliates and the Company, there can be no assurance that the Company would not receive more favorable
terms if it were dealing with an unaÇliated party, although the Company will seek to achieve market-based
terms in all such transactions. See ""Description of Capital Stock Ì CertiÑcate of Incorporation and Bylaw
Provisions Ì Overview of Corporate Opportunity and ConÖict of Interest Policies.''
Dependence on Mario J. Gabelli and Other Key Personnel
The Company is dependent on the eÅorts of Mr. Gabelli, its Chairman of the Board, Chief Executive
OÇcer, Chief Investment OÇcer and the primary portfolio manager for a signiÑcant majority of the
Company's assets under management. The loss of Mr. Gabelli's services would have a material adverse eÅect
on the Company.
In addition to Mr. Gabelli, the future success of the Company depends to a substantial degree on its
ability to retain and attract other qualiÑed personnel to conduct its investment management business. The
market for qualiÑed portfolio managers is extremely competitive and has grown more so in recent periods as
the investment management industry has experienced growth. The Company anticipates that it will be
necessary for it to add portfolio managers and investment analysts as the Company further diversiÑes its
investment products and strategies. See ""Business Ì Business Strategy.'' There can be no assurance, however,
that the Company will be successful in its eÅorts to recruit and retain the required personnel. In addition, the
investment professionals as well as the senior marketing personnel have direct contact with the Company's
Separate Account clients, which can lead to a strong client relationship. The loss of these personnel could
jeopardize the Company's relationships with certain Separate Account clients, and result in the loss of such
accounts. The loss of key management professionals or the inability to recruit and retain suÇcient portfolio
managers and marketing personnel could have a material adverse eÅect on the Company's business.
Potential Adverse EÅects on the Company's Performance Prospects from a Decline in the Performance of
the Securities Markets
The Company's results of operations are aÅected by many economic factors, including the performance
of the securities markets. During recent years, unusually favorable and sustained performance of the
U.S. securities markets, and the U.S. equity market, in particular, has attracted substantial inÖows of new
investments in these markets and has contributed to signiÑcant market appreciation which has, in turn, led to
an increase in assets under management and revenues for the Company. At September 30, 1998,
approximately 88% of the Company's assets under management were invested in portfolios consisting
primarily of equity securities. More recently, the securities markets in general have experienced signiÑcant
volatility, with declines in value experienced during the third quarter of 1998. Any further decline in the
securities markets, in general, and the equity markets, in particular, could further reduce the Company's assets
under management and consequently reduce the Company's revenues. In addition, any such continuing
decline in the equity markets, failure of these markets to sustain their prior levels of growth, or continued
short-term volatility in these markets could result in investors withdrawing from the equity markets or
decreasing their rate of investment, either of which would be likely to further adversely aÅect the Company.
The Company's growth rate has varied from year to year, and there can be no assurance that the average
growth rates sustained in the recent past will continue. From time to time, a relatively high proportion of the
assets managed by the Company may be concentrated in particular industry sectors. A general decline in the
performance of securities in those industry sectors could have an adverse eÅect on the Company's assets under
management and revenues.
13