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Related Party Transactions
12 Months Ended
Dec. 31, 2020
Related Party Transactions [Abstract]  
Related Party Transactions
I.  Related Party Transactions
 
The following is a summary of certain related party transactions.
 
GGCP, Inc., a private company controlled by the Executive Chairman, indirectly owns a majority of our Class B stock, representing approximately 95% of the combined voting power and 83% of the outstanding shares of our common stock at December 31, 2020.
 
Loans with related parties
 
On April 23, 2019, the Company issued a promissory note for $2.1 million to our Executive Chairman.  The promissory note was re-paid with interest at 1% per annum on May 28, 2019.
 
Investments in Securities
 
In August 2006, a son of the Executive Chairman was given responsibility for managing one proprietary investment account. The balance in the proprietary investment account at December 31, 2020 and 2019 was $34.3 million and $26.3 million, respectively, of which $2.8 million and $1.0 million, respectively, is owed to the portfolio manager representing earnings that have been re-invested in the account.
 
At December 31, 2020 and 2019, the value of the Company’s investment in GAMCO common stock (GBL) was $48.9 million and $57.2 million, respectively. As of December 31, 2020 and 2019, AC and its subsidiaries own approximately 2.8 million and 2.9 million shares respectively of GAMCO Class A Stock. The Company recorded dividend income of $2.8 million and $0.3 million in 2020 and 2019, respectively from GAMCO which is included in interest and dividend income on the consolidated statements of income.  For the year, the GBL stock price decreased 9.0% to $17.74 per share, resulting in a $5.5 million net realized and unrealized loss for the Company versus a net realized and unrealized gain of $7.6 million in 2019.

At December 31, 2020 and 2019, the Company invested $31.5 million and $336.7 million, respectively, in the Gabelli U.S. Treasury Money Market Fund, which is recorded in cash and cash equivalents on the consolidated statements of financial condition.  For the years ended December 31, 2020 and 2019, the Company earned interest of $1.6 million and $7.8 million from the Company’s investment in this fund, respectively.
 
Investments in affiliated equity mutual funds advised by Gabelli Funds and Teton Advisors, Inc., an investment advisor under common control with the Company, totaled $170.7 million and $159.3 million at December 31, 2020 and 2019, respectively and are included in either investments in affiliated registered investment companies on the consolidated statements of financial condition. Included in other income/(expense) are $12.0 million and $20.1 million of gains from investments and dividends with respect to funds advised by Gabelli Funds and Teton Advisors, Inc. for the years ending December 31, 2020 and 2019, respectively.
 
Investments in Partnerships
 
We had an aggregate investment in affiliated Investment Partnerships of approximately $99.1 million and $124.8 million at December 31, 2020 and 2019, respectively. Affiliates of the Company, including its consolidated subsidiaries, generally receive management fees and incentive fees and allocations of up to 20% with respect to certain of these entities.
 
Investment Advisory Services
 
Pursuant to a sub-advisory agreement with the Company, Gabelli Funds pays GCIA 90% of the net revenues it receives related to investment advisory services provided to GAMCO International SICAV – GAMCO Merger Arbitrage, an investment company incorporated under the laws of Luxembourg (the “SICAV”). For this purpose, net revenues are defined as gross advisory fees less expenses related to payouts and expenses of the SICAV paid by Gabelli Funds. GCIA received $7.2 million and $4.1 million during 2020 and 2019, respectively under this sub-advisory agreement. These payments are included in investment advisory and incentive fees on the consolidated statements of income.
 
Compensation
 
In accordance with an employment agreement, the Company pays the Executive Chairman, or his designated assignees, a management fee equal to 10% of the Company’s pretax profits before consideration of this fee and before consolidation of Investment Partnerships. In 2020 and 2019, the Company recorded management fee expense of $3.1 million and $5.7 million, respectively. These fees are recorded as management fee on the consolidated statements of income.
 
Affiliated Receivables/Payables
 
At December 31, 2020 and 2019, the receivable from affiliates consists primarily of sub-advisory fees due from Gabelli Funds.
 
At December 31, 2020 and 2019, the payable to affiliates primarily consisted of expenses paid by affiliates on behalf of the Company.
 
GAMCO Sublease
 
In June 2016, AC entered into a sublease agreement with GBL which is subject to annual renewal. Pursuant to the sublease, AC and its subsidiaries pay a monthly fixed lease amount based on the percentage of square footage occupied by its employees (including pro rata allocation of common space) at GBL’s corporate offices. For the years ended December 31, 2020 and 2019, the Company paid $144 thousand and $501 thousand, respectively, under the sublease agreement. These amounts are included in other operating expenses on the consolidated statements of income.
 
AC acquired a building at 3 St. James Place, London, UK on March 3, 2020 which is fully leased to GAMCO commencing 2021.