Original GBL Prospectus - Gabelli

assigned to a speciÑc client from the onset of the client relationship. The Company's sales force maintains
direct relationships with corporate pension and proÑt sharing plans, foundations, endowment funds, jointly
trusteed plans, municipalities and high net worth individuals that comprise the Company's Separate Accounts
business.
Partnerships
The Company oÅers alternative investment products through its majority-owned subsidiary, GSI. These
alternative investments products consist primarily of risk arbitrage and merchant banking limited partnerships
and oÅshore companies. The Partnerships had $147 million of assets at September 30, 1998. Gabelli
Associates Fund had $115 million of assets under management as of September 30, 1998 and invests in
merger arbitrage opportunities. Merchant banking activities are carried out through ALCE Partners, L.P.
(""Alce''), and Gabelli Multimedia Partners, L.P. (""Multimedia''), both of which are closed to new investors.
Aggregate assets for Alce and Multimedia as of September 30, 1998 were approximately $9 million and $6
million, respectively. Gabelli Associates Limited, which had approximately $17 million of assets as of
September 30, 1998, is an oÅshore investment company designed for non-U.S. investors seeking to participate
in risk arbitrage opportunities utilizing the same investment objectives and strategies as the Gabelli Associates
Fund. The Company also manages the Gabelli International Gold Fund Limited, which as of September 30,
1998 had less than $1 million of assets. The Company's alternative investment products are marketed
primarily through its direct sales force. The Company does not expect that assets invested in the Partnerships
or other alternative investment products will contribute signiÑcantly to the Company's future growth.
Brokerage and Mutual Fund Distribution
The Company oÅers underwriting, execution and trading services through its subsidiary, Gabelli &
Company. Gabelli & Company is a broker-dealer registered under the Securities Exchange Act of 1934 and a
member of the NASD. Gabelli & Company's revenues are derived primarily from distribution of the Mutual
Funds, brokerage commissions and selling concessions on transactions in equity securities for the Mutual
Funds, Separate Accounts and other customers, and from underwriting fees and market-making activities.
The Company distributes the open-end Mutual Funds pursuant to distribution agreements with each
open-end Mutual Fund. Under each distribution agreement with an open-end Mutual Fund, the Company
oÅers and sells such open-end Mutual Fund's shares on a continual basis and pays all of the costs of marketing
and selling the shares of such open-end Mutual Fund, including printing and mailing prospectuses and sales
literature, advertising and maintaining sales and customer service personnel and sales and services fulÑllment
systems, and payments to the sponsors of Third-Party Distribution Programs, Ñnancial intermediaries and
sales personnel of the Company. The Company receives fees for such services pursuant to distribution
agreements adopted under provisions of Rule 12b-1. Distribution fees from the open-end Mutual Funds
amounted to $4.7 million and $8.8 million for the nine months ended September 30, 1997 and 1998,
respectively, and $6.2 million, $7.1 million and $7.5 million for the years ended December 31, 1995, 1996 and
1997, respectively. The Company is the principal underwriter for several funds distributed with a sales charge,
including shares of The Gabelli Value Fund Inc. and service class shares of the Gabelli Westwood Equity
Fund and the Gabelli Westwood Balanced Fund.
Under the distribution agreements, the open-end Mutual Funds (except the Treasurer's Funds, the
Gabelli U.S. Treasury Money Market Fund and the Gabelli Capital Asset Fund) pay the Company a
distribution fee of .25% per year (except the Service Class of the Gabelli Westwood Equity and Balanced
Funds which pay .50% per year) on the average daily net assets of the fund. The Company's distribution
agreements with the Mutual Funds may continue in eÅect from year to year only if speciÑcally approved at
least annually by (i) the Mutual Fund's board of directors or trustees or (ii) the Mutual Fund's shareholders
and, in either case, the vote of a majority of the Mutual Fund's directors or trustees who are not parties to the
agreement or ""interested persons'' of any such party, within the meaning of the Investment Company Act.
Each Mutual Fund may terminate its distribution agreement, or any agreement thereunder, at any time upon
60 days' written notice by (i) a vote of the majority of its directors or trustees cast in person at a meeting
called for the purpose of voting on such termination or (ii) a vote at a meeting of shareholders of the lesser of
either 67% of the voting shares represented in person or by proxy or 50% of the outstanding voting shares of
such Mutual Fund. Each distribution agreement automatically terminates in the event of its assignment, as
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