Gabelli Merger Plus+ Trust

Last updated 02 October 2019

GMPP seeks to generate uncorrelated absolute returns through investing in announced mergers..

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Gabelli Merger Plus+ Trust. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Gabelli Merger Plus+ Trust

Gabelli Merger Plus+ (GMP/GMPP) aims to provide uncorrelated absolute returns by investing in announced mergers to earn the spread between the deal price and the market price of the acquired company. Whilst investment is predominantly through equities or instruments tied to equities, it is seeking to benefit from share price uplift offered by the risk premium attached to announced deals; as such, returns will not be driven by wider equity market moves. The company aims to pay a 5% dividend yield on NAV, paid out of the cash received when deals close.

Although this trust was launched in July 2017, Gabelli has managed funds with this approach since 1985; in this period, it has generated annualised returns of 10.5% (gross of fees) with low correlation to equity markets.

While the trust’s NAV total returns have been solid since launch, with returns of c.15.6%, share price returns have lagged as a moderate discount has opened; this now stands at c. -9%.

Dividends have been in line with the proposed payout of 5% since launch on the starting NAV. However, with the trust moving to a discount the annualised yield of the current latest payout is an attractive 5.3%

A sterling quote for the shares has recently been launched and trades under the symbol ‘GMPP’; this is aimed at improving trading volumes and liquidity, and to broaden the shareholder register in the UK.

Callum Stokeld
Callum joined Kepler as an investment trust analyst in July 2019. Prior to this he worked as a senior investment analyst on a range of multi-manager, multi-asset portfolios, having previously worked at IFA firms in roles focused on oversight of fund selection and asset allocation. He graduated from the University of Glasgow with an honours degree in Law.

Fund History

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Key facts

Investment objective

Gabelli Merger Plus seeks to generate capital appreciation and dividend distributions. The company has a secondary objective of capital protection.

As at: 

30/09/19

Group/Investment

Gabelli Merger Plus+ Trust

Ticker

GMP / GMPP

Management Company

Cantor Fitzgerald Europe

Manager Name

Mario J. Gabelli; Marc J. Gabelli; Ralph Rocco; Robert D. Leininger;

Association of Investment Companies (AIC) Sector

Hedge Funds

12 Mo Yield

5.4%

Dividend Distribution Frequency

Quarterly

Latest Market Capitalisation

£74,216,740

Latest Net Gearing (Cum Fair)

0%

Latest Ongoing Charge ex Perf Fee

1.26%

Turnover Ratio

247.47%

Shares Outstanding 

10,334,166

(Discount) / Premium (Cum Fair)

-9.04%

Daily Closing Price

718p

Source: Morningstar

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