Original GBL Prospectus - Gabelli

Future Investment Performance Could Reduce Revenues and Other Income
Success in the investment management and mutual fund businesses is dependent on investment
performance as well as distribution and client servicing. Good performance generally stimulates sales of the
Company's investment products and tends to keep withdrawals and redemptions low, which generates higher
management fees (which are based on the amount of assets under management). Conversely, relatively poor
performance tends to result in decreased sales, increased withdrawals and redemptions in the case of the openend
Mutual Funds, and in the loss of Separate Accounts, with corresponding decreases in revenues to the
Company. Many analysts of the mutual fund industry believe that investment performance is the most
important factor for the growth of no-load Mutual Funds, such as those oÅered by the Company. Failure of
the Company's investment products to perform well could, therefore, have a material adverse eÅect on the
Company.
Loss of SigniÑcant Separate Accounts Could AÅect Revenues
The Company had approximately 950 Separate Accounts as of September 30, 1998, of which the ten
largest accounts generated approximately 7% of the Company's total revenues during the nine months ended
September 30, 1998. Loss of these accounts for any reason would have an adverse eÅect on the Company's
revenues. Notwithstanding good performance, the Company has from time to time lost large Separate
Accounts as a result of corporate mergers and restructurings, and the Company could continue to lose
accounts under these or other circumstances.
Compliance Failures and Changes in Regulation Could Adversely AÅect the Company
The Company's investment management activities are subject to client guidelines and its Mutual Fund
business involves compliance with numerous investment, asset valuation, distribution and tax requirements. A
failure to adhere to these guidelines or satisfy these requirements could result in losses which could be
recovered by the client from the Company in certain circumstances. Although the Company has installed
procedures and utilizes the services of experienced administrators, accountants and lawyers to assist it in
adhering to these guidelines and satisfying these requirements, and maintains insurance to protect it in the
case of client losses, there can be no assurance that such precautions or insurance will protect the Company
from potential liabilities.
The Company's businesses are subject to extensive regulation in the United States, including by the
Securities and Exchange Commission (the ""Commission'') and the NASD. The Company is also subject to
the laws of non-U.S. jurisdictions and non-U.S. regulatory agencies or bodies. The failure of the Company to
comply with applicable laws or regulations could result in Ñnes, suspensions of personnel or other sanctions,
including revocation of the registration of the Company or any of its subsidiaries as an investment adviser or
broker-dealer. Changes in laws or regulations or in governmental policies could have a material adverse eÅect
on the Company. See ""Business Ì Regulation.''
The Company's Sources of Revenue are Subject to Termination on Short Notice
Substantially all of the Company's revenues are derived from investment management agreements and
distribution arrangements. Investment management agreements and distribution arrangements with the
Mutual Funds are terminable without penalty on 60 days' notice (subject to certain additional procedural
requirements in the case of termination by a Mutual Fund) and must be speciÑcally approved at least
annually, as required by law. Such annual renewal requires, among other things, approval by the disinterested
members of each Mutual Fund's board of directors or trustees. See ""Business Ì Brokerage and Mutual Fund
Distribution.'' Investment advisory agreements with the Separate Accounts are typically terminable by the
client without penalty on 30 days' notice or less. Any failure to renew or termination of a signiÑcant number of
these agreements or arrangements would have a material adverse eÅect on the Company.
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