| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 5.21% | 0.45% | 6.07% |
| 2025 |
|---|
| 6.1% |
The Gabelli ABC Fund returned 0.45% in Q4 2025, bringing full-year returns to 6.07%. The Fund focuses on arbitrage strategies and event-driven situations, benefiting from a robust M&A environment that saw $4.6 trillion in announced transactions for 2025, a 49% increase from the previous year. The quarter was led by megadeals, including Netflix's $83 billion acquisition of Warner Bros. Discovery, though Paramount Skydance intervened with a higher $108 billion proposal. Technology, industrials, and financials dominated M&A activity, accounting for over $2 trillion in deals. Top contributors included Surmodics, Pan American Silver, and Fox, while detractors included Perrigo and National Fuel Gas. The Fund successfully closed several biotech deals including Akero Therapeutics and Metsera acquisitions. Despite macro headwinds from government shutdowns and geopolitical tensions, the continued economic resiliency and benign credit environment support ongoing M&A activity into 2026.
The Fund focuses on arbitrage strategies investing in event driven situations such as announced mergers, spin-offs, split-ups, liquidations, and reorganizations while holding significant assets in U.S. Treasury bills for quick, non-market correlated opportunities.
As the new year begins, the expectation for positive impact on the economy from last year's tax bill and tariff dynamics will allow strong M&A activity to continue well into 2026.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 18 2026 | 2025 Q4 | CFLT, EXAS, FOX, FRGE, GTLS, HOLX, KKR, KMB, KVUE, LEN, NEM, NFG, NFLX, PAAS, PSKY, TGNA, TXNM, WBD | arbitrage, healthcare, industrials, M&A, private equity, technology |
GTCH EXAS HOLX ALE |
The Gabelli ABC Fund gained 0.45% in Q4 amid record M&A activity totaling $4.6 trillion for 2025. The Fund capitalized on event-driven opportunities including major biotech acquisitions and megadeals like Netflix's Warner Bros. Discovery bid. Strong deal flow across technology, industrials, and financials sectors positions the strategy well for continued M&A momentum in 2026. |
| Nov 16 2025 | 2025 Q3 | AAPL, AMETEK, AMZN, AXP, BK, BRK.B, CAT, CNH, DE, GOOGL, ITT, META, MSFT, MSGS, NEM, NFLX, NVDA, RSG, SONY, TSLA, WBD | AI, energy, financials, gold, M&A, rates, technology, Trade |
ECG US OR US |
Markets climbed 8.1% in Q3 driven by AI enthusiasm and broadening rally despite trade tensions. Fed cut rates 25bps with more expected while gold hit $4,000 on fiscal concerns. M&A activity surged 33% as regulatory environment improved. Despite 30x earnings valuations, opportunities exist in overlooked small-mid caps using Private Market Value approach. |
| Jun 30 2025 | 2025 Q2 | AAPL, AMZN, BATRA, CHWY, CZR, FOX, GOOGL, IDXX, IVG.MI, META, MSFT, MSGS, NFLX, NVDA, SBGI, TDS, TGNA, TSLA, WBD, ZTS | AI, defense, Mergers & Acquisitions, private market value, Sports, tariffs, Utilities, Value Investing | SWTX | GAMCO navigates Q2 2025's policy-driven volatility through disciplined Private Market Value investing. Trade uncertainty, fiscal stimulus, and institutional trust erosion create complex backdrop. Key opportunities emerge in AI infrastructure, defense spending, utilities transformation, and sports entertainment. Firm remains cautious on market multiples while finding value in domestic small caps and international markets. Volatility benefits patient capital deployment. |
| Mar 31 2025 | 2025 Q1 | AB, AZEK, BECN, FOXA, FYBR, GABCX, ITCI, IVAC, JNJ, JNPR, KKR, LEN, LGTY, TGNA, TXNM, VZ, WBA | Acquisitions, arbitrage, Event-Driven, Mergers, Regulatory | - | The Gabelli ABC Fund employs arbitrage strategies focused on merger and acquisition opportunities. Q1 2025 saw $885 billion in global M&A activity despite regulatory headwinds under the new Trump administration. The fund benefited from deals like Johnson & Johnson's $14.6 billion acquisition of Intra-Cellular Therapies, while positioning for continued M&A acceleration driven by competitive pressures and available private equity capital. |
| Dec 31 2024 | 2024 Q4 | ALE, AXNX, CNHI, CTLT, FOX, JNPR, KKR, LEN, NAPA, NFG, SCWX, SJI, SRDX, TGNA, TXNM | arbitrage, Capital markets, Event Driven, M&A, Mergers | - | The Gabelli ABC Fund returned 1.47% in Q4 2024, benefiting from merger arbitrage strategies as global M&A activity reached $3.2 trillion. The Trump administration's expected lighter antitrust enforcement should spur deal activity after years of regulatory headwinds. The fund maintains positions in pending mergers while capitalizing on completed transactions across technology, energy, and financial sectors. |
| Sep 30 2024 | 2024 Q3 | BSX, CHUY, FOXA, FTR, INST, JNPR, K, KKR, LBTYK, LEN, MARS, PRY, SRDX, TXNM, VZ, VZIO, WIRE | arbitrage, Deal Activity, M&A, private equity, technology | - | The Gabelli ABC Fund capitalizes on robust M&A activity through arbitrage strategies in announced deals. Global M&A reached $2.3 trillion through nine months, up 16% year-over-year, led by technology sector consolidation. Fed rate cuts support deal financing while potential regulatory changes may improve transaction approval processes, creating favorable conditions for the Fund's event-driven investment approach. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Live SportsMario Gabelli emphasizes live entertainment and sports as major investment themes, citing massive viewership numbers and recommending Atlanta Braves Holdings, Madison Square Garden Sports, and Manchester United as core positions with significant upside potential. |
Sports Entertainment Media Valuation |
AIAI is described as transformative and accelerating across the economy, but Gabelli warns of potential disappointment for investors and compares current dynamics to late 1990s tech speculation with risks of market correction. |
Technology Semiconductors Disruption Valuation | |
Natural GasNational Fuel Gas is recommended based on substantial Appalachian Basin reserves strategically located near population centers, with the value of gas reserves being unappreciated by the market. |
Energy Utilities Infrastructure Reserves | |
GoldGold expert Caesar Bryan's fund returned 167% in 2025, with gold serving as a store of value amid monetary uncertainty and geopolitical tensions, particularly for governments seeking alternatives to dollar holdings. |
Precious Metals Store of Value Monetary Policy | |
| 2025 Q3 |
AIArtificial Intelligence continues to be the primary driver of market returns, with most of the Magnificent Seven at or near all time highs. The scale of investment in AI infrastructure continues to surpass expectations, with the five largest cloud computing platforms communicating capex plans for 2025 aggregating to approximately $380 billion. |
Infrastructure Investment Technology Cloud |
Trade PolicyTrade continues to be in flux, with the U.S. signing deals with many partners including the UK and European Union, though uncertainty remains for significant countries including China and India. The average U.S. tariff has decreased from 23% in April to 17.5% currently. |
Tariffs China Uncertainty Negotiations | |
GoldGold and bitcoin extended their rallies with gold reaching nearly $4,000 per ounce and bitcoin at $120,000, driven by fiscal concerns and search for real-asset hedges amid $37 trillion in national debt and $2 trillion annual budget deficit. |
Inflation Hedge Fiscal Debt | |
RatesThe Federal Reserve cut rates for the first time this year in September, lowering the Fed Funds rate 25 bps to 4%-4.25%, with expectations for further cuts. 10 Year U.S. Treasury yields declined during the quarter and are currently around 4.1%. |
Fed Monetary Treasury Easing | |
BuybacksMany financial institutions continued their multi-year share repurchase plans, with companies like Bank of New York Mellon repurchasing 1.4% of shares and Standard Chartered reducing share count by 2.3% in the quarter. |
Repurchase Capital Returns Allocation | |
| 2025 Q2 |
AIMajor AI infrastructure platforms remained committed to aggressive investment with the five largest global data center operators communicating 2025 capex plans aggregating to ~$330bn. Adoption of generative AI services has inflected sharply with ChatGPT's Weekly Active Users doubling since the start of the year and Alphabet's Gemini reporting 50x year-over-year growth in tokens generated. |
Data Centers Cloud Semiconductors Enterprise Software Automation |
Trade PolicyThe Three T's dominated investor attention with Trade uncertainty hampering spending decisions by businesses and consumers. Liberation Day tariffs triggered market volatility but a 90-day pause provided relief. The effective weighted average tariff rate is anticipated at nearly 18% incorporating recent bilateral trade deals. |
Tariffs Trade War Globalization Supply Chain Inflation | |
Defense SpendingEuropean defense budgets are rising sharply with 31 of 32 NATO member nations committing to boost defense spending to 5% of GDP by 2035, roughly double current levels. Companies like Saab and defense contractors are benefiting from increased spending and NATO expansion. |
NATO Military Aerospace Defense Electronics Government IT | |
Live SportsGrowing enthusiasm about the world of sports with more people buying tickets to sporting events and sports broadcasting vital to companies. Major sports leagues now allow up to 30% private-equity ownership of individual teams, increasing their value. The growth of the Hispanic market is favorable for baseball and sports gambling is growing. |
Entertainment Media Sports Betting Event Ticketing Gaming | |
Energy TransitionUtilities are responding with record capital investment in generation and grid upgrades as electricity demand grows at its fastest pace since the mid-20th century, driven by AI-powered data centers, reshoring of manufacturing, and electrification of transport. |
Renewable Developers Grid Upgrade Nuclear Energy Storage Smart Grid | |
Pet CarePet ownership has reached new highs with 94 million U.S. households now owning at least one pet, up from 82 million just two years ago. Gen Z shows a 43.5% increase in pet ownership with a notable tendency to own multiple pets, driving demand for premium products and services. |
Veterinary Pet Products Animal Health E-commerce Consumer Discretionary | |
| 2025 Q1 |
Biopharma M&AThe fund invested in Intra-Cellular Therapies, which agreed to be acquired by Johnson & Johnson for $132 cash per share, valuing the transaction at approximately $14.6 billion. This represents a significant pharmaceutical merger and acquisition opportunity. |
Johnson & Johnson Intra-Cellular Therapies pharmaceutical acquisition merger |
Capital MarketsThe fund focuses on arbitrage strategies and event-driven situations including announced mergers, spin-offs, split-ups, liquidations, and reorganizations. Regulatory scrutiny remained at the forefront with two transactions sued by DOJ and FTC within weeks of Trump's inauguration. |
arbitrage mergers acquisitions regulatory antitrust | |
| 2024 Q4 |
Capital MarketsM&A activity totaled $3.2 trillion globally in 2024, a 10% increase from 2023. Technology, energy and power, and financials were the most active sectors. Private equity-backed transactions contributed 22% to total deal volumes. The new Trump administration is expected to spur a resurgence of deal activity with less strict antitrust enforcement. |
M&A Arbitrage Deal Activity Antitrust Private Equity |
| 2024 Q3 |
Biopharma M&AThe technology sector remained the most active with $375 billion worth of new deals announced in the first three quarters of 2024, representing a 29% year-over-year increase. Notable transactions included Mars Company's agreement to acquire Kellanova for $28.8 billion and Verizon's arrangement to acquire Frontier Communications for $9.6 billion. |
M&A Technology Consolidation Deal Activity Private Equity |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Feb 18, 2026 | Fund Letters | Mario J. Gabelli | GTCH | Chart Industries, Inc. | Industrials | Industrial Machinery | Bull | New York Stock Exchange | acquisition, arbitrage, energy, Industrials, LNG | Login |
| Feb 18, 2026 | Fund Letters | Mario J. Gabelli | EXAS | Exact Sciences Corporation | Health Care | Health Care Services | Bull | NASDAQ | diagnostics, growth, Oncology, Reimbursement, Screening | Login |
| Feb 18, 2026 | Fund Letters | Mario J. Gabelli | HOLX | Hologic, Inc. | Health Care | Health Care Equipment | Bull | NASDAQ | arbitrage, cashflow, diagnostics, Imaging, private equity | Login |
| Feb 18, 2026 | Fund Letters | Mario J. Gabelli | ALE | ALLETE, Inc. | Utilities | Electric Utilities | Bull | New York Stock Exchange | arbitrage, cash, infrastructure, Regulation, utilities | Login |
| Nov 16, 2025 | Fund Letters | Mario J. Gabelli | ECG US | Everus Construction Group, Inc. | Industrials | Construction & Engineering | Bull | NYSE | backlog, construction, data centers, Electrification, infrastructure | Login |
| Nov 16, 2025 | Fund Letters | Mario J. Gabelli | OR US | OR Royalties Inc. | Materials | Precious Metals Royalty & Streaming | Bull | NYSE | Gold, low leverage, Optionality, royalties, Streaming | Login |
| Jun 30, 2025 | Fund Letters | Mario J. Gabelli | SWTX | SpringWorks Therapeutics, Inc. | Health Care | Biotechnology | Bull | NASDAQ | acquisition, Approval, arbitrage, Biotech, cashflow, Oncology, pipeline, Spread | Login |
| TICKER | COMMENTARY |
|---|---|
| CFLT | CFLT, one of infrastructure software investments, reported a slightly disappointing quarter. The disappointment, in our opinion, was largely cosmetic. The market, however, severely punished the stock, treating the mild disappointment on one key performance indicator as if it was existential. We disagreed and used the opportunity to make CFLT one of our biggest positions, believing this to be a very strategic asset. Late in the fourth quarter we were validated when IBM announced a bid to acquire the company for a 35% premium. |
| EXAS | The largest single contributor was Exact Sciences, which was acquired for a significant premium by Abbot Laboratories in November, resulting in an +86% return in the quarter for one of our higher-conviction positions. |
| GTLS | Chart Industries Inc. makes specialized equipment for storing, transporting and processing gases for the LNG and hydrogen industries. GTLS was in the process of combing with Flowserve in a merger of equals. But on July 29, Baker Hughes agreed to acquire GTLS for $210.00 per share in cash – topping the Flowserve merger. |
| HOLX | We note that both CADE and HOLX both agreed to be acquired, with the deals pending closure in 2026. We believe both deals will close and elected to hold the positions into the close, as there is likely upside for each. |
| KKR | Over the prior two years, KKR was one of the Fund's strongest contributors. From the end of 2022 through the end of 2024, the shares more than tripled, rising roughly 80% in 2023 and another 80% in 2024, as the market began to recognize the earnings power of its asset-management and insurance platforms. This year, the stock told a different story: in 2025 it was down about 13% and was roughly 23% below its January peak. Strip away the stock-price swings, and the business itself has continued to grow. Fee-related earnings, insurance earnings, and long-dated capital have all moved higher, even as market sentiment toward rates, credit, and capital flows into alternatives has become more cautious. |
| KMB | One holding that ran into difficulties last quarter is Kimberly Clark (KMB), the tissue company behind well-known brands such as Huggies, Cottonelle, and Kleenex. The consumer products giant saw its shares fall more than 14% in November, not because of poor results or sub-par execution. Instead, the stock sank immediately after KMB announced its $48.7 billion acquisition of Kenvue, the consumer health company spun off from Johnson & Johnson which sells Tylenol, Neutrogena, Band-Aid and Listerine. We disagree with management's capital allocation decision, as it takes KMB into new categories and poses significant integration risk. We find it unfortunate that management made such an aggressive move after executing well against an internally focused playbook that positioned KMB for value creation in the coming years. We fear that the Kenvue deal makes the company bigger, not necessarily better. We trimmed the position in response to the Kenvue announcement. However, we balance deal-related question marks against a valuation of 13 times earnings (a historically wide discount to peers), better market share trends and improved margin performance in recent years. |
| KVUE | Kimberly-Clark's $49 billion acquisition of Kenvue. |
| LEN | LEN: $5B authorized January 2024; $4B completed |
| NEM | Newmont delivered +18% performance over the quarter, contributing meaningfully to portfolio returns as gold gained another 12%, taking its 2025 gains to an extraordinary 64%. |
| NFG | National Fuel Gas Co. is a gas and pipeline utility with a growing exploration and production business. The gas utility serves 754,000 customers in Buffalo, New York, and Erie and Sharon, Pennsylvania. The pipeline & storage (P&S) business operates 3,000 miles of pipe and 34 storage facilities primarily in the state of New York. The E&P business, Seneca Resources, operates in Appalachia (where it owns 1.2 million net acres), primarily in the Marcellus and Utica shales and ended FY 2025 with nearly 5.0 Tcfe of proved gas reserves, making it one of the most resource-rich utilities in the U.S. These reserves are strategically important as natural gas demand in the Northeast accelerates, driven in part by rising electricity consumption from data centers and AI-related load growth. NFG's extensive pipeline and storage network further enhances the value of its upstream assets by providing reliable access to premium regional markets. Higher gas production and prices have helped drive very strong EPS and cash flow growth in recent years and will continue given legacy hedges roll off and are replaced at higher prices. NFG's pending $2.6 billion acquisition of CenterPoint Energy's Ohio gas utility will roughly double NFG's regulated utility rate base, expand its customer footprint, and increase the percentage of earnings derived from regulated operations. |
| NFLX | NFLX was the portfolio's largest detractor in 4Q25 following investor concerns around near-term subscriber growth and rising content spending. While revenue grew approximately 10% year-over-year, management guided to slower net subscriber additions in North America and Europe after recent price increases, and margins were pressured by elevated investment in live sports and international content. |
| PAAS | Pan American Silver provides diversified exposure to silver and gold across the Americas. Our position was established following Pan American's acquisition of a long-standing pool holding, MAG Silver, in May 2025, which expanded the company's scale and reserve base. Even excluding recent price volatility, company all-in silver production costs remain around US$15 per ounce, supporting profitable production across a wide range of price environments. |
| PSKY | By comparison, we exited Paramount Skydance Corp (PSKY) on strong price appreciation, prompting us to realize gains once the stock reached our estimate of its private market value. |
| WBD | Warner Bros Discovery (WBD) was the top contributor during the quarter. The U.S.-headquartered media company's stock price surged as multiple parties submitted offers to acquire all or part of the business. Following several rounds of bidding, WBD announced an agreement to sell its Streaming and Studios business to Netflix, while spinning the Global Networks business to shareholders. Paramount Skydance subsequently made a direct $30 per share offer to shareholders for the entire company. We are pleased with the steps the WBD board has taken thus far to unlock shareholder value. We will continue to closely monitor developments as this bidding war unfolds. |
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