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ACG calls Gabelli Value Plus+ shareholder meeting as trust’s future hangs in balance

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ACG calls Gabelli Value Plus+ shareholder meeting as trust’s future hangs in balance
Sets out three proposals

Lauren Mason, Investment Week, 23 October 2020

Associated Capital Group (ACG), the firm which holds more than 25% of the beleaguered Gabelli Value Plus+ investment trust (GVP), has called a general meeting with the company’s board and its shareholders to vote on three proposals it set out earlier in the month, in a bid to prevent the vehicle’s liquidation.

ACG, which is chaired by Mario Gabelli – who is responsible for the discretionary management of GVP and is CEO of Gabelli Funds’ parent company GAMCO Investors – requisitioned a general meeting under Section 303 of the Companies Act 2006, via a letter sent to the investment trust’s board yesterday (22 October 2020).

In the letter, ACG wishes to “allow” shareholders to vote on whether they would prefer the re-introduction of an active share buyback programme – which would acquire 10% of the issued share capital of the trust per annum; the launch of a distribution programme targeting distributions equivalent to 6% of the trust’s NAV per annum; or negotiations with Gabelli Funds to reduce its investment management fee to 50 basis points per annum…

This comes less than two months after ACG blocked proposals from the board for the investment trust to be liquidated, following a majority shareholder vote to do so in its July AGM.

Earlier this month, GVP’s board received a letter from the general counsel to ACG indicating that “litigation concerning the company may be a distinct possibility”, which led the board to initiate a further period of shareholder consultation which it stated was “regrettably, partly in response” to the letter.

The refusal of ACG to permit the liquidation of the trust – which has lost investors 7.2% over the last three years while its average peer in the IT North America sector has returned 26.4%, according to data from FE fundinfo, has previously been called “one of the most outrageous moves we have seen in the investment company sector for some time” by QuotedData’s James Carthew, and “rather a mess” by analysts at Stifel.

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