UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21969
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The Gabelli Global Deal Fund
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(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
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(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
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(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
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Date of fiscal year end: December 31
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Date of reporting period: June 30, 2007
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
THE GABELLI GLOBAL DEAL FUND
Semi-Annual Report
June 30, 2007
TO OUR SHAREHOLDERS,
Thank you for your continuing investment in The Gabelli Global Deal Fund
(the "Fund"). We are pleased to present you with our initial semi-annual report.
Shares of the Fund began trading on the New York Stock Exchange ("NYSE")
under the symbol "GDL" on January 26, 2007 at the public offering price of
$20.00. The Fund commenced investment operations on January 31, 2007 with an
initial net asset value ("NAV") of $19.06 after underwriting fees and offering
expenses. Including the initial distribution of $0.40 per share paid on June 25,
2007, the Fund's net asset value ("NAV") total return was 2.94% since inception
of investment operations, compared with a gain of 2.12% for the 3 Month U.S.
Treasury Bill Index. From the inception of investment operations on January 31,
2007 to June 30, 2007, the closing market price of the publicly traded shares
ranged from $18.50 to $20.95. On June 30, 2007, the Fund's NAV per share was
$19.22, while the price of the publicly traded shares closed at $18.50 on the
NYSE.
Enclosed are the financial statements and the investment portfolio as of
June 30, 2007.
--------------------------------------------------------------------------------
RETURNS THROUGH JUNE 30, 2007 (A)
---------------------------------
Since
Inception
Quarter (01/31/07)
------- ----------
GABELLI GLOBAL DEAL FUND
NAV TOTAL RETURN (B) .................................. 2.25% 2.94%
INVESTMENT TOTAL RETURN (C)............................ (3.39) (5.57)
3 Month U.S. Treasury Bill Index......................... 1.29 2.12
S&P 500 Index............................................ 6.27 5.36
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
INVESTMENT RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE.
WHEN SHARES ARE SOLD, THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA
PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE INFORMATION AS OF THE MOST
RECENT MONTH END. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE
NOT ANNUALIZED. INVESTORS SHOULD CAREFULLY CONSIDER THE INVESTMENT
OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE FUND BEFORE INVESTING. THE
3 MONTH U.S. TREASURY BILL INDEX IS COMPRISED OF A SINGLE ISSUE PURCHASED
AT THE BEGINNING OF THE MONTH AND HELD FOR A FULL MONTH. AT THE END OF THE
MONTH, THAT ISSUE IS SOLD AND ROLLED INTO THE OUTSTANDING TREASURY BILL
THAT MATURES CLOSEST TO, BUT NOT BEYOND THREE MONTHS FROM THE RE-BALANCING
DATE. TO QUALIFY FOR SELECTION, AN ISSUE MUST HAVE SETTLED ON OR BEFORE THE
RE-BALANCING (MONTH END) DATE. THE STANDARD & POOR'S ("S&P") 500 INDEX IS
AN UNMANAGED INDICATOR OF STOCK MARKET PERFORMANCE. YOU CANNOT INVEST
DIRECTLY IN AN INDEX.
(b) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN NAV PER SHARE
AND REINVESTMENT OF DISTRIBUTIONS AT NAV ON THE EX-DIVIDEND DATE AND ARE
NET OF EXPENSES. SINCE INCEPTION RETURN IS BASED ON AN INITIAL NAV OF
$19.06.
(c) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN CLOSING MARKET
VALUES ON THE NEW YORK STOCK EXCHANGE AND REINVESTMENT OF DISTRIBUTIONS.
SINCE INCEPTION RETURN IS BASED ON AN INITIAL OFFERING PRICE OF $20.00.
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We have separated the portfolio manager's commentary from the financial
statements and investment portfolio due to corporate governance regulations
stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that
the content of the portfolio manager's commentary is unrestricted. The financial
statements and investment portfolio are mailed separately from the commentary.
Both the commentary and the financial statements, including the portfolio of
investments, will be available on our website at www.gabelli.com.
--------------------------------------------------------------------------------
THE GABELLI GLOBAL DEAL FUND
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total
investments as of June 30, 2007:
Energy and Utilities............................. 9.2%
Financial Services............................... 8.9%
Media............................................ 8.4%
Diversified Industrial........................... 8.1%
Commercial Services.............................. 7.6%
Health Care...................................... 7.4%
Repurchase Agreements............................ 6.8%
Telecommunications............................... 6.3%
Consumer Products................................ 6.0%
Metals and Mining................................ 5.9%
Computer Software and Services................... 3.6%
Business Services................................ 3.4%
Transportation................................... 2.6%
Retail........................................... 2.5%
Real Estate Investment Trusts.................... 2.2%
Hotels and Gaming................................ 1.8%
U.S. Treasury Bills.............................. 1.6%
Food and Beverage................................ 1.5%
Electronics...................................... 1.5%
Specialty Chemicals.............................. 1.4%
Materials........................................ 1.3%
Entertainment.................................... 1.2%
Aerospace ....................................... 0.6%
Automotive....................................... 0.1%
Computer Hardware................................ 0.1%
Restaurants...................................... 0.0%
Building and Construction........................ 0.0%
Agriculture...................................... 0.0%
Machinery........................................ 0.0%
-----
100.0%
=====
THE FUND FILES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION (THE "SEC") FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL
YEAR ON FORM N-Q, THE LAST OF WHICH WAS FILED FOR THE QUARTER ENDED MARCH 31,
2007. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY CALLING
THE FUND AT 800-GABELLI (800-422-3554). THE FUND'S FORM N-Q IS AVAILABLE ON THE
SEC'S WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE SEC'S
PUBLIC REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF THE
PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330.
PROXY VOTING
The Fund files Form N-PX with its complete proxy voting record for the 12
months ended June 30th, no later than August 31st of each year. A description of
the Fund's proxy voting policies, procedures, and how the Fund voted proxies
relating to portfolio securities is available without charge, upon request, by
(i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One
Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC's website at
www.sec.gov.
2
THE GABELLI GLOBAL DEAL FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES COST VALUE
-------- -------- --------
COMMON STOCKS -- 91.6%
AEROSPACE -- 0.6%
26,000 Armor Holdings Inc.+ .............. $ 2,229,771 $ 2,258,620
------------ ------------
AGRICULTURE -- 0.0%
1,000 Provimi SA ........................ 46,580 46,017
------------ ------------
AUTOMOTIVE -- 0.1%
10,000 Lear Corp.+ ....................... 381,264 356,100
------------ ------------
BUILDING AND CONSTRUCTION -- 0.0%
1,000 Washington Group
International Inc.+ ............. 81,055 80,010
------------ ------------
BUSINESS SERVICES -- 3.4%
1,000 1-800 Contacts Inc.+ .............. 23,925 23,460
50,000 aQuantive Inc.+ ................... 3,183,975 3,190,000
2,000 CDW Corp.+ ........................ 171,075 169,940
320,000 First Data Corp. .................. 10,405,615 10,454,400
------------ ------------
13,784,590 13,837,800
------------ ------------
COMMERCIAL SERVICES -- 7.6%
10,000 Alliance Data Systems Corp.+ ...... 783,699 772,800
3,000 Catalina Marketing Corp. .......... 95,410 94,500
300,000 Laureate Education Inc.+ .......... 18,275,310 18,498,000
150,000 PHH Corp.+ ........................ 4,648,630 4,681,500
200,000 The ServiceMaster Co. ............. 3,094,936 3,092,000
70,000 Vertrue Inc.+ ..................... 3,374,421 3,414,600
------------ ------------
30,272,406 30,553,400
------------ ------------
COMPUTER HARDWARE -- 0.1%
10,000 Komag Inc.+ ....................... 318,350 318,900
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 3.6%
1,500 Affiliated Computer
Services Inc., Cl. A+ ........... 90,800 85,080
50,000 Agile Software Corp.+ ............. 398,750 403,000
5,000 Castelle+ ......................... 18,886 19,650
15,000 Ceridian Corp.+ ................... 530,247 525,000
338,000 Covansys Corp.+ ................... 11,295,857 11,468,340
3,000 eCollege.com+ ..................... 66,135 66,750
20,000 Inter-Tel Inc. .................... 523,518 478,600
10,000 Jupitermedia Corp.+ ............... 76,950 72,800
125,000 The BISYS Group Inc.+ ............. 1,463,101 1,478,750
------------ ------------
14,464,244 14,597,970
------------ ------------
CONSUMER PRODUCTS -- 6.0%
250,000 Altadis SA ........................ 16,263,809 16,647,493
500 Everlast Worldwide Inc.+ .......... 14,977 16,090
40,000 Harman International
Industries Inc. ................. 4,900,066 4,672,000
SHARES/ MARKET
UNITS COST VALUE
-------- ------ ------
17,000 Herbalife Ltd. .................... $ 664,156 $ 674,050
2,000 Oakley Inc. ....................... 56,883 56,800
5,000 Stride Rite Corp. ................. 101,000 101,300
189,700 The Topps Co. Inc. ................ 1,853,907 1,993,747
------------ ------------
23,854,798 24,161,480
------------ ------------
DIVERSIFIED INDUSTRIAL -- 8.1%
2,000 Mitsubishi Plastics Inc. .......... 6,576 7,488
500,000 Myers Industries Inc. ............. 11,142,677 11,055,000
193,500 Rinker Group Ltd. (a) ............. 3,018,199 3,090,696
234,200 Rinker Group Ltd., ADR ............ 18,407,773 18,642,320
------------ ------------
32,575,225 32,795,504
------------ ------------
ELECTRONICS -- 1.5%
230,000 Alliance
Semiconductor Corp.+ ............ 1,131,788 1,150,000
1,000 American Technical
Ceramics Corp.+ ................. 23,960 23,870
50,000 Bel Fuse Inc., Cl. A .............. 1,909,141 1,849,000
1,000 Color Kinetics Inc.+ .............. 33,355 33,410
30,000 Techem AG ......................... 2,120,735 2,098,396
22,350 Trimble Navigation Ltd.+ .......... 620,659 719,670
------------ ------------
5,839,638 5,874,346
------------ ------------
ENERGY AND UTILITIES -- 9.2%
1,000,000 Aquila Inc.+ ...................... 4,198,929 4,090,000
20,800 Cascade Natural Gas Corp. ......... 543,263 549,328
1,000 Countryside Power
Income Fund ..................... 8,997 8,928
160,000 Endesa SA ......................... 8,482,755 8,707,586
10,000 Energy East Corp. ................. 264,056 260,900
10,000 Hanover Compressor Co.+ ........... 226,367 238,500
180,000 KeySpan Corp. ..................... 7,359,963 7,556,400
42,000 NorthWestern Corp. ................ 1,426,049 1,336,020
550 REpower Systems AG+ ............... 104,824 91,189
420,000 SEMCO Energy Inc.+ ................ 3,248,835 3,263,400
10,000 Torch Energy Royalty Trust ........ 80,212 80,400
165,000 TXU Corp. ......................... 10,982,455 11,104,500
------------ ------------
36,926,705 37,287,151
------------ ------------
ENTERTAINMENT -- 1.2%
50,000 Alliance Atlantis
Communications Inc.,
Cl. B+ .......................... 2,423,269 2,454,354
100,000 Gateway Casinos
Income Fund ..................... 2,255,134 2,360,948
300 Penn National Gaming Inc.+ ........ 17,972 18,027
------------ ------------
4,696,375 4,833,329
------------ ------------
See accompanying notes to financial statements.
3
THE GABELLI GLOBAL DEAL FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2007 (UNAUDITED)
SHARES/ MARKET
UNITS COST VALUE
-------- ------ ------
COMMON STOCKS (CONTINUED)
FINANCIAL SERVICES -- 8.9%
97,000 21st Century
Insurance Group ................. $ 2,111,614 $ 2,120,420
25,000 A.G. Edwards Inc. ................. 2,189,699 2,113,750
70,000 ABN AMRO Holding NV ............... 3,421,750 3,225,959
3,000 ABN AMRO Holding NV,
ADR ............................. 149,859 137,760
1,000 Accredited Home
Lenders Holding Co.+ ............ 14,825 13,670
10,000 Asset Acceptance
Capital Corp.+ .................. 189,050 177,000
5,000 Banco BPI SA ...................... 42,725 44,529
70,000 Bristol West Holdings Inc. ........ 1,547,436 1,565,900
130,000 Compass Bancshares Inc. ........... 9,062,065 8,967,400
6,000 First Republic Bank ............... 321,980 321,960
20,000 Great American Financial
Resources Inc. .................. 484,717 483,800
1,000 International Securities
Exchange Holdings Inc. .......... 65,732 65,350
85,000 Investors Financial
Services Corp. .................. 5,160,519 5,241,950
1,000 James River Group Inc. ............ 34,105 33,230
90,000 Nuveen Investments Inc.,
Cl. A ........................... 5,693,294 5,593,500
14,800 Ohio Casualty Corp. ............... 639,222 640,988
2,000 Premier Community
Bankshares Inc. ................. 66,471 65,320
85,000 SLM Corp. ......................... 4,703,529 4,894,300
------------ ------------
35,898,592 35,706,786
------------ ------------
FOOD AND BEVERAGE -- 1.5%
2,000 Bull-Dog Sauce Co. Ltd. ........... 27,134 26,315
4,680 Nissin Food
Products Co. Ltd. ............... 164,382 156,982
10,000 Pathmark Stores Inc.+ ............. 127,698 129,600
28,300 Van Houtte Inc. ................... 660,065 660,975
310,000 Wild Oats Markets Inc.+ ........... 5,691,713 5,195,600
------------ ------------
6,670,992 6,169,472
------------ ------------
HEALTH CARE -- 7.4%
1,200 Bausch & Lomb Inc. ................ 80,027 83,328
5,200 Bioenvision Inc.+ ................. 29,367 30,056
400,000 Biomet Inc. ....................... 17,847,389 18,288,000
500 Digene Corp.+ ..................... 30,178 30,025
40,000 Genesis HealthCare Corp.+ ......... 2,639,302 2,736,800
110,000 Sierra Health Services Inc.+ ...... 4,557,208 4,573,800
3,000 Tanox Inc.+ ....................... 58,275 58,230
70,000 Triad Hospitals Inc.+ ............. 3,468,160 3,763,200
MARKET
SHARES COST VALUE
-------- -------- --------
1,500 Ventana Medical
Systems Inc.+ ................... $ 114,647 $ 115,905
------------ ------------
28,824,553 29,679,344
------------ ------------
HOTELS AND GAMING -- 1.8%
60,000 Harrah's Entertainment Inc. ....... 5,096,679 5,115,600
25,000 Station Casinos Inc. .............. 2,180,219 2,170,000
------------ ------------
7,276,898 7,285,600
------------ ------------
MACHINERY -- 0.0%
1,000 Fuji Robin Industries Ltd.+ ....... 2,213 2,599
MATERIALS -- 1.3%
15,000 Florida Rock Industries Inc. ...... 996,707 1,012,500
12,500 Intertape Polymer
Group Inc.+ ..................... 58,500 56,250
111,200 St. Lawrence Cement
Group Inc., Cl. A ............... 4,048,363 4,297,680
------------ ------------
5,103,570 5,366,430
------------ ------------
MEDIA -- 8.4%
100,000 APN News & Media Ltd. ............. 469,655 495,964
305,000 Cablevision Systems Corp.,
Cl. A+ .......................... 10,580,126 11,037,950
400,000 Clear Channel
Communications Inc. ............. 14,731,800 15,128,000
40,000 Dow Jones & Co. Inc. .............. 2,356,866 2,298,000
150,000 Endemol NV ........................ 4,921,324 4,919,131
1,000 Moscow CableCom Corp.+ ............ 12,393 12,840
------------ ------------
33,072,164 33,891,885
------------ ------------
METALS AND MINING -- 5.9%
20,000 Alcan Inc. ........................ 1,657,540 1,626,000
1,000 Cumerio NV/SA ..................... 40,066 41,280
5,000 Gloucester Coal Ltd. .............. 20,075 21,492
70,000 IPSCO Inc. ........................ 11,072,387 11,121,600
400,000 LionOre Mining
International Ltd.+ ............. 9,920,672 10,495,189
20,000 Peru Copper Inc.+ ................. 122,207 122,037
14,500 Uranium One Inc.+ ................. 192,657 184,713
------------ ------------
23,025,604 23,612,311
------------ ------------
REAL ESTATE INVESTMENT TRUSTS -- 2.2%
500 America First Apartment
Investors Inc. .................. 12,537 12,375
2,000 Archstone-Smith Trust ............. 120,423 118,220
5,000 Crescent Real Estate
Equities Co. .................... 111,950 112,200
110,000 Equity Inns Inc. .................. 2,501,500 2,464,000
10,000 Highland Hospitality Corp. ........ 192,378 192,000
See accompanying notes to financial statements.
4
THE GABELLI GLOBAL DEAL FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES COST VALUE
-------- -------- --------
COMMON STOCKS (CONTINUED)
REAL ESTATE INVESTMENT TRUSTS (CONTINUED)
260,200 Innkeepers USA Trust .............. $ 4,586,850 $ 4,613,346
100,000 Winston Hotels Inc. ............... 1,447,315 1,500,000
------------ ------------
8,972,953 9,012,141
------------ ------------
RESTAURANTS -- 0.0%
1,000 Friendly Ice Cream Corp.+ ......... 15,190 15,160
6,000 The Smith & Wollensky
Restaurant Group Inc.+ .......... 54,926 65,160
------------ ------------
70,116 80,320
------------ ------------
RETAIL -- 2.5%
3,120 AOKI Holdings Inc. ................ 53,769 59,676
350,000 Dollar General Corp. .............. 7,548,215 7,672,000
25,000 Genesco Inc.+ ..................... 1,338,241 1,307,750
1,000 Getaz Romang Holding SA+ .......... 923,014 902,988
200 Guitar Center Inc.+ ............... 11,977 11,962
------------ ------------
9,875,216 9,954,376
------------ ------------
SPECIALTY CHEMICALS -- 1.4%
3,000 Huntsman Corp. .................... 72,780 72,930
160,000 Pioneer Companies Inc.+ ........... 5,490,566 5,499,200
------------ ------------
5,563,346 5,572,130
------------ ------------
TELECOMMUNICATIONS -- 6.3%
5,000 Aeroflex Inc.+ .................... 69,585 70,850
200,000 Alltel Corp. ...................... 13,664,576 13,510,000
1,000 Andrew Corp.+ ..................... 14,390 14,440
100,000 Asia Satellite
Telecommunications
Holdings Ltd., ADR .............. 2,244,548 2,032,500
200,000 Avaya Inc.+ ....................... 3,423,964 3,368,000
5,000 BCE Inc. .......................... 140,497 188,950
15,000 CT Communications Inc. ............ 463,647 457,650
500 Eschelon Telecom Inc.+ ............ 14,486 14,800
400,000 Portugal Telecom SGPS SA .......... 5,317,041 5,538,337
5,000 Stratos Global Corp.+ ............. 32,434 31,870
5,000 Terayon Communication
Systems Inc.+ ................... 8,800 8,800
------------ ------------
25,393,968 25,236,197
------------ ------------
MARKET
SHARES COST VALUE
-------- -------- --------
TRANSPORTATION -- 2.6%
100,000 EGL Inc.+ ......................... $ 4,649,487 $ 4,648,000
10,000 Florida East Coast
Industries Inc. ................. 839,503 829,800
5,000 Interpool Inc. .................... 133,600 134,500
140,000 Laidlaw International Inc. ........ 4,837,369 4,837,000
2,000 Midwest Air Group Inc.+ ........... 28,990 30,040
2,000 The Cronos Group .................. 31,183 31,660
------------ ------------
10,520,132 10,511,000
------------ ------------
TOTAL
COMMON STOCKS 365,741,318 369,081,218
------------ ------------
PRINCIPAL
AMOUNT
---------------
SHORT-TERM OBLIGATIONS -- 8.4%
REPURCHASE AGREEMENTS -- 6.8%
$27,401,000 Barclays Capital Inc.,
5.250%, dated 06/29/2007,
due 07/02/07, proceeds at
maturity, $27,412,988 (b) ....... 27,401,000 27,401,000
------------ ------------
U.S. TREASURY BILLS -- 1.6%
6,476,000 U.S. Treasury Bills,
4.599% to 4.863%++,
08/02/07 to 09/27/07 ............ 6,415,569 6,414,578
------------ ------------
TOTAL SHORT-TERM
OBLIGATIONS ..................... 33,816,569 33,815,578
------------ ------------
TOTAL INVESTMENTS -- 100.0% ...................... $399,557,887 402,896,796
============
OTHER ASSETS AND LIABILITIES (NET) ............................... 5,523,242
------------
NET ASSETS - COMMON SHARES
(21,255,236 common shares outstanding) ......................... $408,420,038
============
NET ASSET VALUE PER COMMON SHARE
($408,420,038 / 21,255,236 shares outstanding) ................. $19.22
======
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30, 2007,
the market value of the Rule 144A security amounted to $3,090,696 or 0.77%
of total investments.
(b) Collateralized by $27,940,000 Federal Home Loan Bank, 5.250%, due 12/24/08,
market value $27,949,020.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depository Receipt
See accompanying notes to financial statements.
5
THE GABELLI GLOBAL DEAL FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
ASSETS:
Investments, at value (cost $372,156,887).............. $375,495,796
Repurchase agreements, at value (cost $27,401,000)..... 27,401,000
Foreign currency, at value (cost $13,280).............. 13,306
Cash................................................... 468
Receivable for investments sold........................ 10,927,175
Dividends receivable................................... 583,065
Unrealized appreciation on swap contracts.............. 310,473
------------
TOTAL ASSETS........................................... 414,731,283
------------
LIABILITIES:
Distributions payable.................................. 3,201,264
Payable for investments purchased...................... 1,795,630
Payable for offering expenses.......................... 673,966
Payable for investment advisory fees................... 518,587
Payable for Trustees' fees............................. 789
Payable for accounting fees............................ 242
Other accrued expenses................................. 120,767
------------
TOTAL LIABILITIES...................................... 6,311,245
------------
NET ASSETS applicable to 21,255,236
shares outstanding................................... $408,420,038
============
NET ASSETS CONSIST OF:
Paid-in capital........................................ $405,125,008
Distribution in excess of net investment income and
net realized gains on investments, swap contracts,
and foreign currency transactions.................... (354,835)
Net unrealized appreciation on investments............. 3,338,909
Net unrealized appreciation on swap contracts.......... 310,473
Net unrealized appreciation on foreign
currency translations................................ 483
------------
NET ASSETS............................................. $408,420,038
============
NET ASSET VALUE:
($408,420,038 / 21,255,236 shares outstanding;
unlimited number of shares authorized)............... $19.22
======
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 2007 (A) (UNAUDITED)
INVESTMENT INCOME:
Dividends (net of foreign taxes of $99,807)............. $ 2,509,386
Interest................................................ 1,853,868
-----------
TOTAL INVESTMENT INCOME................................. 4,363,254
-----------
EXPENSES:
Investment advisory fees................................ 1,174,330
Shareholder communications expenses..................... 81,926
Custodian fees.......................................... 50,999
Trustees' fees.......................................... 28,289
Legal and audit fees.................................... 26,705
Accounting fees......................................... 18,992
Payroll expenses........................................ 15,343
Shareholder services fees............................... 4,471
Miscellaneous expenses.................................. 20,983
-----------
TOTAL EXPENSES.......................................... 1,422,038
Less: Custodian fee credits............................. (30,896)
-----------
NET EXPENSES............................................ 1,391,142
-----------
NET INVESTMENT INCOME................................... 2,972,112
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, SWAP CONTRACTS, AND
FOREIGN CURRENCY:
Net realized gain on investments........................ 5,605,376
Net realized loss on swap contracts..................... (293,743)
Net realized loss on foreign currency transactions...... (136,486)
-----------
Net realized gain on investments, swap contracts,
and foreign currency transactions..................... 5,175,147
-----------
Net change in unrealized appreciation/depreciation:
on investments........................................ 3,338,909
on swap contracts..................................... 310,473
on foreign currency translations...................... 483
-----------
Net change in unrealized appreciation/depreciation
on investments, swap contracts, and
foreign currency translations......................... 3,649,865
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, SWAP CONTRACTS, AND
FOREIGN CURRENCY...................................... 8,825,012
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................................... $11,797,124
===========
--------------------
(a) The Gabelli Global Deal Fund commenced investment operations on
January 31, 2007.
See accompanying notes to financial statements.
6
THE GABELLI GLOBAL DEAL FUND
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED
JUNE 30, 2007(A)
(UNAUDITED)
--------------
OPERATIONS:
Net investment income............................................................................ $ 2,972,112
Net realized gain on investments, swap contracts, and foreign currency transactions.............. 5,175,147
Net change in unrealized appreciation/depreciation on investments, swap contracts, and
foreign currency translations ................................................................. 3,649,865
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................................. 11,797,124
------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income............................................................................ (2,972,112)*
Net realized gain on investments, swap contracts, and foreign currency transactions.............. (5,175,147)*
Return of capital................................................................................ (354,835)*
------------
TOTAL DISTRIBUTIONS TO COMMON SHAREHOLDERS....................................................... (8,502,094)
------------
FUND SHARE TRANSACTIONS:
Net increase in net assets from common shares issued in offering................................. 405,875,000
Offering costs for common shares charged to paid-in-capital...................................... (850,000)
------------
NET INCREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS.......................................... 405,025,000
------------
NET INCREASE IN NET ASSETS....................................................................... 408,320,030
NET ASSETS:
Beginning of period.............................................................................. 100,008
------------
End of period (including undistributed net investment income of $0).............................. $408,420,038
============
--------------------
(a) The Gabelli Global Deal Fund commenced investment operations on
January 31, 2007.
* Based on year to date book income. Amounts are subject to change and
recharacterization at fiscal year end.
See accompanying notes to financial statements.
7
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION. The Gabelli Global Deal Fund (the "Fund") is a non-diversified
closed-end management investment company organized as a Delaware statutory trust
on October 17, 2006 and registered under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Fund sold 5,236 shares to Gabelli Funds, LLC (the
"Adviser") for $100,008 on December 22, 2006. Investment operations commenced on
January 31, 2007 upon the settlement of the sale of 18,750,000 shares of
beneficial interest in the amount of $357,375,000 (net of underwriting fees and
expenses of $17,625,000). In addition, on March 9, 2007, the Fund issued
2,500,000 shares of beneficial interest in the amount of $47,650,000 (net of
underwriting fees and expenses of $2,350,000) in conjunction with the exercise
of the underwriters' overallotment option. The Adviser agreed to pay all the
Fund's organizational costs and the amount by which the Fund's offering costs
(other than the underwriting fees) exceed $0.04 per common share.
The Fund's primary investment objective is to achieve absolute returns in
various market conditions without excessive risk of capital. The Fund will seek
to achieve its objective by investing primarily in merger arbitrage transactions
and, to a lesser extent, in corporate reorganizations involving stubs,
spin-offs, and liquidations. Under normal market conditions, the Fund will
invest at least 80% of its assets in securities or hedging arrangements relating
to companies involved in corporate transactions or reorganizations, giving rise
to the possibility of realizing gains upon or within relatively short periods of
time after the completion of such transactions or reorganizations.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with United States ("U.S.") generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates. The following is a summary of significant accounting
policies followed by the Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities are being valued. If there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Trustees (the "Board") so determines, by such other method as the Board
shall determine in good faith to reflect its fair market value. Portfolio
securities traded on more than one national securities exchange or market are
valued according to the broadest and most representative market, as determined
by the Adviser.
Portfolio securities primarily traded on a foreign market are generally
valued at the preceding closing values of such securities on the relevant
market, but may be fair valued pursuant to procedures established by the Board
if market conditions change significantly after the close of the foreign market
but prior to the close of business on the day the securities are being valued.
Debt instruments with remaining maturities of 60 days or less that are not
credit impaired are valued at amortized cost, unless the Board determines such
amount does not reflect the securities' fair value, in which case these
securities will be fair valued as determined by the Board. Debt instruments
having a maturity greater than 60 days for which market quotations are readily
available are valued at the average of the latest bid and asked prices. If there
were no asked prices quoted on such day, the security is valued using the
closing bid price. Futures contracts are valued at the closing settlement price
of the exchange or board of trade on which the applicable contract is traded.
8
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
Securities and assets for which market quotations are not readily available
are fair valued as determined by the Board. Fair valuation methodologies and
procedures may include, but are not limited to: analysis and review of available
financial and non-financial information about the company; comparisons to the
valuation and changes in valuation of similar securities, including a comparison
of foreign securities to the equivalent U.S. dollar value ADR securities at the
close of the U.S. exchange; and evaluation of any other information that could
be indicative of the value of the security.
In September 2006, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value
Measurements, which clarifies the definition of fair value and requires
companies to expand their disclosure about the use of fair value to measure
assets and liabilities in interim and annual periods subsequent to initial
recognition. Adoption of SFAS 157 requires the use of the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. At this time,
management is in the process of reviewing the requirements of SFAS 157 against
its current valuation policies to determine future applicability.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System, or with other brokers or
dealers that meet credit guidelines established by the Adviser and reviewed by
the Board. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
The Fund will always receive and maintain securities as collateral whose market
value, including accrued interest, will be at least equal to 102% of the dollar
amount invested by the Fund in each agreement. The Fund will make payment for
such securities only upon physical delivery or upon evidence of book entry
transfer of the collateral to the account of the custodian. To the extent that
any repurchase transaction exceeds one business day, the value of the collateral
is marked-to-market on a daily basis to maintain the adequacy of the collateral.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited. At June 30,
2007, the Fund had an investment of $27,401,000 in a repurchase agreement.
SWAP AGREEMENTS. The Fund may enter into equity swap transactions. The use
of equity swaps is a highly specialized activity that involves investment
techniques and risks different from those associated with ordinary portfolio
security transactions. An equity swap is a swap where a set of future cash flows
are exchanged between two counterparties. One of these cash flow streams will
typically be based on a reference interest rate combined with the performance of
a notional value of shares of a stock. The other will be based on the
performance of the shares of a stock. There is no assurance that the swap
contract counterparties will be able to meet their obligations pursuant to the
swap contracts, or that, in the event of default, the Fund will succeed in
pursuing contractual remedies. The Fund thus assumes the risk that it may be
delayed in or prevented from obtaining payments owed to it pursuant to the swap
contracts. The creditworthiness of the swap contract counterparties is closely
monitored in order to minimize the risk. Depending on the general state of
short-term interest rates and the returns of the Fund's portfolio securities at
that point in time, such a default could negatively affect the Fund's ability to
make dividend payments on the common shares. In addition, at the time an equity
swap transaction reaches its scheduled termination date, there is a risk that
the Fund will not be able to obtain a replacement transaction or that the terms
of the replacement will not be as favorable as on the expiring transaction. If
this occurs, it could have a negative impact on the Fund's ability to make
dividend payments.
9
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
The use of derivative instruments involves, to varying degrees, elements of
market and counterparty risk in excess of the amount recognized in the Statement
of Assets and Liabilities.
Unrealized gains related to swaps are reported as an asset and unrealized
losses are reported as a liability in the Statement of Assets and Liabilities.
The change in value of swaps, including the accrual of periodic amounts of
interest to be paid or received on swaps is reported as unrealized gains or
losses in the Statement of Operations. A realized gain or loss is recorded upon
payment or receipt of periodic payment or termination of swap agreements.
The Fund has entered into equity swap agreements with Bear, Stearns
International Limited. Details of the swaps at June 30, 2007 are as follows:
NET UNREALIZED
NOTIONAL EQUITY SECURITY INTEREST RATE/ TERMINATION APPRECIATION/
AMOUNT RECEIVED EQUITY SECURITY PAID DATE (DEPRECIATION)
-------- --------------- ---------------------- ------------ --------------
Market Value Overnight LIBOR plus
Appreciation on: Market Value Depreciation on:
$11,115,993 (500,000 shares) Alliance Boots plc Alliance Boots plc 2/15/08 $232,358
3920 British Pounds (2,000 shares) Universal Salvage plc Universal Salvage plc 2/15/08 62
$ 5,982,172 (485,000 shares) Reuters Group plc Reuters Group plc 3/17/08 34,393
653,248 (50,000 shares) SurfControl plc SurfControl plc 3/17/08 15,839
211,658 (25,000 shares) SSL International plc SSL International plc 3/17/08 3,342
125,564 (100,000 shares) Gulf Keystone Petroleum Ltd. Gulf Keystone Petroleum Ltd. 4/15/08 (28,994)
5,318,582 (250,000 shares) Hanson plc Hanson plc 4/15/08 60,104
313,225 (25,000 shares) Imperial Chemical Industries plc Imperial Chemical Industries plc 5/15/08 (6,631)
--------
$310,473
========
FUTURES CONTRACTS. The Fund may engage in futures contracts for the purpose
of hedging against changes in the value of its portfolio securities and in the
value of securities it intends to purchase. Upon entering into a futures
contract, the Fund is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the "initial margin". Subsequent payments ("variation margin") are made
or received by the Fund each day, depending on the daily fluctuations in the
value of the contract, which are included in unrealized
appreciation/depreciation on investments and futures contracts. The Fund
recognizes a realized gain or loss when the contract is closed.
There are several risks in connection with the use of futures contracts as
a hedging instrument. The change in value of futures contracts primarily
corresponds with the value of their underlying instruments, which may not
correlate with the change in value of the hedged investments. In addition, there
is the risk that the Fund may not be able to enter into a closing transaction
because of an illiquid secondary market. At June 30, 2007, there were no open
futures contracts.
SECURITIES SOLD SHORT. The Fund may enter into short sale transactions.
Short selling involves selling securities that may or may not be owned and, at
times, borrowing the same securities for delivery to the purchaser, with an
obligation to replace such borrowed securities at a later date. The proceeds
received from short sales are recorded as liabilities and the Fund records an
unrealized gain or loss to the extent of the difference between the proceeds
received and the value of an open short position on the day of determination.
The Fund records a realized gain or loss when the short position is closed out.
By entering into a short sale, the Fund bears the market risk of an unfavorable
change in the price of the security sold short. Dividends on short sales are
recorded as an expense by the Fund on the ex-dividend date and interest expense
is recorded on the accrual basis. The Fund did not hold any short positions as
of June 30, 2007.
10
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign
exchange contracts for hedging a specific transaction with respect to either the
currency in which the transaction is denominated or another currency as deemed
appropriate by the Adviser. Forward foreign exchange contracts are valued at the
forward rate and are marked-to-market daily. The change in market value is
included in unrealized appreciation/depreciation on investments and foreign
currency translations. When the contract is closed, the Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
The use of forward foreign exchange contracts does not eliminate
fluctuations in the underlying prices of the Fund's portfolio securities, but it
does establish a rate of exchange that can be achieved in the future. Although
forward foreign exchange contracts limit the risk of loss due to a decline in
the value of the hedged currency, they also limit any potential gain that might
result should the value of the currency increase. In addition, the Fund could be
exposed to risks if the counterparties to the contracts are unable to meet the
terms of their contracts. At June 30, 2007, there were no open forward foreign
exchange contracts.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund are
maintained in U.S. dollars. Foreign currencies, investments, and other assets
and liabilities are translated into U.S. dollars at the current exchange rates.
Purchases and sales of investment securities, income, and expenses are
translated at the exchange rate prevailing on the respective dates of such
transactions. Unrealized gains and losses that result from changes in foreign
exchange rates and/or changes in market prices of securities have been included
in unrealized appreciation/depreciation on investments and foreign currency
translations. Net realized foreign currency gains and losses resulting from
changes in exchange rates include foreign currency gains and losses between
trade date and settlement date on investment securities transactions, foreign
currency transactions, and the difference between the amounts of interest and
dividends recorded on the books of the Fund and the amounts actually received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the initial trade date and subsequent sale trade date is
included in realized gain/(loss) on investments.
FOREIGN SECURITIES. The Fund may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies, and possible future adverse
political and economic developments. Moreover, securities of many foreign
issuers and their markets may be less liquid and their prices more volatile than
those of securities of comparable U.S. issuers.
FOREIGN TAXES. The Fund may be subject to foreign taxes on income, gains on
investments, or currency repatriation, a portion of which may be recoverable.
The Fund will accrue such taxes and recoveries as applicable, based upon its
current interpretation of tax rules and regulations that exist in the markets in
which it invests.
CONCENTRATION RISKS. The Fund may invest a high percentage of its assets in
specific sectors of the market in order to achieve a potentially greater
investment return. As a result, the Fund may be more susceptible to economic,
political, and regulatory developments in a particular sector of the market,
positive or negative, and may experience increased volatility to the Fund's NAV
and a magnified effect in its total return.
MERGER ARBITRAGE RISK. The principal risk associated with the Fund's
investment strategy is that certain of the proposed reorganizations in which the
Fund invests may involve a longer time frame than originally contemplated, or be
renegotiated or terminated in which case losses may be realized. The Fund
invests all or a portion of its assets to seek short-term capital appreciation.
This can be expected to increase the portfolio turnover rate and cause increased
brokerage commission costs.
11
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded on the accrual
basis. Premiums and discounts on debt securities are amortized using the
effective yield to maturity method. Dividend income is recorded on the
ex-dividend date except for certain dividends which are recorded as soon as the
Fund is informed of the dividend.
CUSTODIAN FEE CREDITS AND INTEREST EXPENSE. When cash balances are
maintained in the custody account, the Fund receives credits which are used to
offset custodian fees. The gross expenses paid under the custody arrangement are
included in custodian fees in the Statement of Operations with the corresponding
expense offset, if any, shown as "custodian fee credits". When cash balances are
overdrawn, the Fund is charged an overdraft fee equal to 110% of the 90 day
Treasury Bill rate on outstanding balances. This amount, if any, would be shown
as "interest expense" in the Statement of Operations.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions to shareholders are recorded
on the ex-dividend date. Distributions to shareholders are based on income and
capital gains as determined in accordance with federal income tax regulations,
which may differ from income and capital gains as determined under U.S.
generally accepted accounting principles. These differences are primarily due to
differing treatments of income and gains on various investment securities and
foreign currency transactions held by the Fund, timing differences, and
differing characterizations of distributions made by the Fund. Distributions
from net investment income include net realized gains on foreign currency
transactions. These book/tax differences are either temporary or permanent in
nature. To the extent these differences are permanent, adjustments are made to
the appropriate capital accounts in the period when the differences arise. These
reclassifications have no impact on the NAV of the Fund.
PROVISION FOR INCOME TAXES. The Fund intends to qualify and elect to be
treated as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). It is the policy of the Fund to
comply with the requirements of the Code applicable to regulated investment
companies and to distribute substantially all of its net investment company
taxable income and net capital gains. Therefore, no provision for federal income
taxes is required.
The following summarizes the tax cost of investments and the related
unrealized appreciation/(depreciation) at June 30, 2007:
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
COST APPRECIATION DEPRECIATION APPRECIATION
---- ------------ ------------ ------------
Investments............... $399,563,036 $5,701,338 $(2,367,578) $3,333,760
Swap contracts............ -- 346,098 (35,625) 310,473
---------- ----------- ----------
$6,047,436 $(2,403,203) $3,644,233
========== =========== ==========
In July 2006, the FASB issued Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109" ("the
Interpretation"). The Interpretation established for all entities, including
pass-through entities such as the Fund, a minimum threshold for financial
statement recognition of the benefit of positions taken in filing tax returns
(including whether an entity is taxable in a particular jurisdiction), and
required certain expanded tax disclosures. The Interpretation was implemented by
the Fund on June 29, 2007 and applied to all open tax years as of the effective
date. Management has evaluated the application of the Interpretation to the
Fund, and the adoption of the Interpretation had no impact on the amounts
reported in the financial statements.
12
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES. The Fund has entered into an
investment advisory agreement (the "Advisory Agreement") with the Adviser which
provides that the Fund will pay the Adviser a base fee, computed weekly and paid
monthly, equal on an annual basis to 0.50% of the value of the Fund's average
weekly managed assets. Managed assets consist of all of the assets of the Fund
without deduction for borrowings, repurchase transactions and other leveraging
techniques, the liquidation value of any outstanding preferred shares, or other
liabilities except for certain ordinary course expenses. In addition, the Fund
may pay the Adviser an annual performance fee at calendar year end if the Fund's
total return on its managed assets during the calendar year in question exceeds
the total return of the 3 Month U.S. Treasury Bill Index (the "T-Bill Index")
during the same period. For every 4 basis points that the Fund's total return
exceeds the T-Bill Index, the Fund will accrue weekly and pay annually 1 basis
point performance fee up to a maximum performance fee of 150 basis points. Under
the performance fee arrangement, the annual rate of the total fees paid to the
Adviser can range from 0.50% to 2.00% of the average weekly managed assets. In
accordance with the Advisory Agreement, the Adviser provides a continuous
investment program for the Fund's portfolio and oversees the administration of
all aspects of the Fund's business and affairs.
During the period ended June 30, 2007, the Fund paid brokerage commissions
of $589,592 to Gabelli & Company, Inc. ("Gabelli & Company"), an affiliate of
the Adviser.
The cost of calculating the Fund's NAV per share is a Fund expense pursuant
to the Advisory Agreement between the Fund and the Adviser. During the period
ended June 30, 2007, the Fund paid or accrued $18,992 to the Adviser in
connection with the cost of computing the Fund's NAV.
As per the approval of the Board, the Fund compensates officers of the Fund
that are employed by the Fund and are not employed by the Adviser (although the
officers may receive incentive-based variable compensation from affiliates of
the Adviser). For the six months ended June 30, 2007 the Fund paid or accrued
$15,343, which is included in payroll expenses in the Statement of Operations.
The Fund pays each Trustee that is not considered to be an affiliated
person an annual retainer of $3,000 plus $1,000 for each Board meeting attended
in person ($500 if attended telephonically) and they are reimbursed for any out
of pocket expenses incurred in attending meetings. All Board committee members
receive $500 per committee meeting attended. Trustees who are directors or
employees of the Adviser or an affiliated company receive no compensation or
expense reimbursement from the Fund.
4. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the period ended June 30, 2007, other than short-term and U.S. Government
securities, aggregated $907,843,075 and $218,230,216, respectively.
5. CAPITAL. The Fund is authorized to issue an unlimited number of common shares
of beneficial interest (par value $0.001). The Board has authorized the
repurchase of its shares in the open market when the shares are trading at a
discount of 7.5% or more (or such other percentage as the Board may determine
from time to time) from the NAV of the shares. During the period ended June 30,
2007, the Fund did not repurchase any shares of beneficial interest in the open
market.
Transactions in shares of beneficial interest were as follows:
PERIOD ENDED
JUNE 30, 2007(A)
(UNAUDITED)
--------------------------
SHARES AMOUNT
---------- ------------
Shares issued in offering............................................. 21,250,000 $405,025,000
-----------------------
(a) The Gabelli Global Deal Fund commenced investment operations on
January 31, 2007.
13
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
6. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of
indemnifications. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
7. OTHER MATTERS. The Adviser and/or affiliates received subpoenas from the
Attorney General of the State of New York and the SEC requesting information on
mutual fund share trading practices involving certain funds managed by the
Adviser. GAMCO Investors, Inc. ("GAMCO"), the Adviser's parent company,
responded to these requests for documents and testimony. In June 2006, GAMCO
began discussions with the SEC regarding a possible resolution of their inquiry.
In February 2007, the Adviser made an offer of settlement to the staff of the
SEC for communication to the Commission for its consideration to resolve this
matter. This offer of settlement is subject to agreement regarding the specific
language of the SEC's administrative order and other settlement documents. On a
separate matter, in September 2005, the Adviser was informed by the staff of the
SEC that the staff may recommend to the Commission that an administrative remedy
and a monetary penalty be sought from the Adviser in connection with the actions
of two of seven closed-end funds managed by the Adviser relating to Section
19(a) and Rule 19a-1 of the 1940 Act. These provisions require registered
investment companies to provide written statements to shareholders when a
dividend is made from a source other than net investment income. While the two
closed-end funds sent annual statements and provided other materials containing
this information, the funds did not send written statements to shareholders with
each distribution in 2002 and 2003. The Adviser believes that all of the funds
are now in compliance. The Adviser believes that these matters would have no
effect on the Fund or any material adverse effect on the Adviser or its ability
to manage the Fund. The staff's notice to the Adviser did not relate to the
Fund.
14
THE GABELLI GLOBAL DEAL FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT
THE PERIOD:
PERIOD ENDED
JUNE 30, 2007(D)
(UNAUDITED)
----------------
OPERATING PERFORMANCE:
Net asset value, beginning of period.............................................................. $ 19.06(e)
--------
Net investment income............................................................................. 0.12
Net realized and unrealized gain on investments, swap contracts, and foreign currency transactions 0.44
--------
Total from investment operations.................................................................. 0.56
--------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income............................................................................. (0.14)*
Net realized gains on investments, swap contracts, and foreign currency transactions.............. (0.24)*
Return of capital ............................................................................... (0.02)*
--------
Total distributions to common shareholders ....................................................... (0.40)
--------
NET ASSET VALUE, END OF PERIOD.................................................................... $ 19.22
========
Net asset value total return +(a)................................................................. 2.94%
========
Market value, end of period....................................................................... $ 18.50
========
Total investment return ++(b)..................................................................... (5.57)%
========
RATIOS AND SUPPLEMENTAL DATA:
Net assets end of period (in 000's)............................................................... $408,420
Ratio of net investment income to average net assets.............................................. 1.80%(f)
Ratio of operating expenses to average net assets (c)............................................. 0.86%(f)
Portfolio turnover rate........................................................................... 75%
--------------
+ Based on net asset value per share, adjusted for reinvestment of
distributions at the net asset value per share on the ex-dividend dates.
Total return for a period of less than one year is not annualized.
++ Based on market value per share, adjusted for reinvestment of distributions
at prices obtained under the Fund's dividend reinvestment plan. Total
return for a period of less than one year is not annualized.
* Based on fiscal period to date book income. Amounts are subject to change
and recharacterization at the end of the fiscal period.
(a) Based on net asset value per share at commencement of operations of $19.06
per share.
(b) Based on market value per share at initial public offering of $20.00 per
share.
(c) The ratio does not include a reduction of expenses for custodian fee
credits on cash balances maintained with the custodian. Including such
custodian fee credits, the expense ratio for the period ended June 30, 2007
would have been 0.84%.
(d) The Gabelli Global Deal Fund commenced investment operations on January 31,
2007.
(e) The beginning of period NAV reflects a $0.04 reduction for costs associated
with the initial public offering.
(f) Annualized.
See accompanying notes to financial statements.
15
THE GABELLI GLOBAL DEAL FUND
CONSIDERATION OF INVESTMENT ADVISORY AGREEMENT WITH
GABELLI FUNDS, LLC (UNAUDITED)
At its meeting on November 8, 2006, the Board of Trustees ("Board") of the Fund
approved the investment advisory agreement with the Adviser for the Fund on the
basis of the recommendation by the trustees who are not "interested persons" of
the Fund (the "Independent Board Members"). The following paragraphs summarize
the material information and factors considered by the Independent Board Members
as well as their conclusions relative to such factors.
NATURE, EXTENT AND QUALITY OF SERVICES. The Independent Board Members considered
information regarding the Fund's portfolio management team, the team leader, the
depth of the analyst pool available to the Adviser and portfolio team, the scope
of services proposed to be provided by the Adviser and its track record in
providing similar services to other open- and closed-end funds. The Independent
Board Members noted the experience, length of service, and reputation of the
portfolio team, including in the merger arbitrage area.
INVESTMENT PERFORMANCE. The Independent Board Members reviewed information
regarding the investment performance of other registered and unregistered funds
advised or subadvised by the Adviser and its affiliates that invest regularly in
arbitrage situations and noted that, although the Fund had no performance
history as it had not yet commenced operations, the Adviser appeared to have the
capability of achieving reasonable investment performance.
PROFITABILITY. The Independent Board Members reviewed summary data regarding the
potential profitability of the Fund to the Adviser and noted that the fulcrum
fee was designed so that the Adviser would likely experience substantially below
average profitability from the Fund if the Fund did not outperform the T-Bill
Index and higher than average profitability if the Fund reached a reasonable
size and substantially outperformed the T-Bill Index.
ECONOMIES OF SCALE. The Independent Board Members noted that after completion of
the initial offering, meaningful economies of scale could not occur in the
absence of secondary offerings.
SHARING OF ECONOMIES OF SCALE. The Independent Board Members noted that the
investment advisory fee for the Fund did not take into account any potential
economies of scale that might develop.
SERVICE AND COST COMPARISONS. The Independent Board Members reviewed the Fund's
pro forma expense ratios and also compared the structure of the investment
advisory fee to the fees for other funds managed by the Adviser and selected
private arbitrage funds as to which information was available.
CONCLUSIONS. The Independent Board Members concluded that the Fund would enjoy
highly experienced portfolio management services and good ancillary services.
The Independent Board Members determined that the reference index chosen for the
fulcrum fee structure was appropriate inasmuch as arbitrage performance is often
measured against risk free returns, that the rate of profit sharing built into
the formula was fair, that the maximum fee was not unreasonable (particularly in
light of the requirement of earning the higher returns necessary for higher fee
levels net of the higher fees), and that the one year measuring period was
sufficient and consistent with the short-term nature of the Fund's investment
program. The Independent Board Members also concluded that the fee was
structured in a favorable manner to investors in relation to the performance of
the Fund and in relation to other arbitrage funds of which they were aware. The
Board concluded that the potential profitability of the Fund to the Adviser
would be reasonable in view of the performance necessary to achieve any
particular level of profitability and that economies of scale and potential
additional profit to the Adviser and its affiliates from portfolio execution
services were not material to their decision. The Independent Board Members
noted, but did not take into account in their evaluation of the reasonableness
of the fee, that the Adviser and/or its affiliates were proposing to pay
structuring amounts and/or continuing payments to certain of the underwriters
out of their own assets. On the basis of the foregoing and without assigning
particular weight to any single conclusion, the Independent Board Members
determined to recommend approval of the investment advisory agreement to the
full Board.
16
AUTOMATIC DIVIDEND REINVESTMENT
AND VOLUNTARY CASH PURCHASE PLANS
ENROLLMENT IN THE PLAN
It is the policy of The Gabelli Global Deal Fund (the "Fund") to
automatically reinvest dividends payable to common shareholders. As a
"registered" shareholder you automatically become a participant in the Fund's
Automatic Dividend Reinvestment Plan (the "Plan"). The Plan authorizes the Fund
to issue common shares to participants upon an income dividend or a capital
gains distribution regardless of whether the shares are trading at a discount or
a premium to net asset value. All distributions to shareholders whose shares are
registered in their own names will be automatically reinvested pursuant to the
Plan in additional shares of the Fund. Plan participants may send their share
certificates to American Stock Transfer ("AST") to be held in their dividend
reinvestment account. Registered shareholders wishing to receive their
distributions in cash must submit this request in writing to:
The Gabelli Global Deal Fund
c/o American Stock Transfer
6201 15th Avenue
Brooklyn, NY 11219
Shareholders requesting this cash election must include the shareholder's
name and address as they appear on the share certificate. Shareholders with
additional questions regarding the Plan or requesting a copy of the terms of the
Plan may contact AST at (888) 422-3262.
If your shares are held in the name of a broker, bank, or nominee, you
should contact such institution. If such institution is not participating in the
Plan, your account will be credited with a cash dividend. In order to
participate in the Plan through such institution, it may be necessary for you to
have your shares taken out of "street name" and re-registered in your own name.
Once registered in your own name your distributions will be automatically
reinvested. Certain brokers participate in the Plan. Shareholders holding shares
in "street name" at participating institutions will have dividends automatically
reinvested. Shareholders wishing a cash dividend at such institution must
contact their broker to make this change.
The number of common shares distributed to participants in the Plan in
lieu of cash dividends is determined in the following manner. Under the Plan,
whenever the market price of the Fund's common shares is equal to or exceeds net
asset value at the time shares are valued for purposes of determining the number
of shares equivalent to the cash dividends or capital gains distribution,
participants are issued common shares valued at the greater of (i) the net asset
value as most recently determined or (ii) 95% of the then current market price
of the Fund's common shares. The valuation date is the dividend or distribution
payment date or, if that date is not a New York Stock Exchange ("NYSE") trading
day, the next trading day. If the net asset value of the common shares at the
time of valuation exceeds the market price of the common shares, participants
will receive common shares from the Fund valued at market price. If the Fund
should declare a dividend or capital gains distribution payable only in cash,
AST will buy common shares in the open market, or on the NYSE, or elsewhere, for
the participants' accounts, except that AST will endeavor to terminate purchases
in the open market and cause the Fund to issue shares at net asset value if,
following the commencement of such purchases, the market value of the common
shares exceeds the then current net asset value.
The automatic reinvestment of dividends and capital gains distributions
will not relieve participants of any income tax which may be payable on such
distributions. A participant in the Plan will be treated for federal income tax
purposes as having received, on a dividend payment date, a dividend or
distribution in an amount equal to the cash the participant could have received
instead of shares.
17
VOLUNTARY CASH PURCHASE PLAN
The Voluntary Cash Purchase Plan is yet another vehicle for our shareholders
to increase their investment in the Fund. In order to participate in the
Voluntary Cash Purchase Plan, shareholders must have their shares registered in
their own name.
Participants in the Voluntary Cash Purchase Plan have the option of making
additional cash payments to AST for investments in the Fund's common shares at
the then current market price. Shareholders may send an amount from $250 to
$10,000. AST will use these funds to purchase shares in the open market on or
about the 1st and 15th of each month. AST will charge each shareholder who
participates a pro rata share of the brokerage commissions. Brokerage charges
for such purchases are expected to be less than the usual brokerage charge for
such transactions. It is suggested that any voluntary cash payments be sent to
American Stock Transfer, 6201 15th Avenue, Brooklyn, NY 11219 such that AST
receives such payments approximately 10 days before the investment date. Funds
not received at least five days before the investment date shall be held for
investment until the next purchase date. A payment may be withdrawn without
charge if notice is received by AST at least 48 hours before such payment is to
be invested.
SHAREHOLDERS WISHING TO LIQUIDATE SHARES HELD AT AST must do so in writing or
by telephone. Please submit your request to the above mentioned address or
telephone number. Include in your request your name, address, and account
number. The cost to liquidate shares is $1.00 per transaction as well as the
brokerage commission incurred. Brokerage charges are expected to be less than
the usual brokerage charge for such transactions.
For more information regarding the Automatic Dividend Reinvestment Plan and
Voluntary Cash Purchase Plan, brochures are available by calling (914) 921-5070
or by writing directly to the Fund.
The Fund reserves the right to amend or terminate the Plan as applied to any
voluntary cash payments made and any dividend or distribution paid subsequent to
written notice of the change sent to the members of the Plan at least 90 days
before the record date for such dividend or distribution. The Plan also may be
amended or terminated by AST on at least 90 days written notice to participants
in the Plan.
18
TRUSTEES AND OFFICERS
THE GABELLI GLOBAL DEAL FUND
ONE CORPORATE CENTER, RYE, NY 10580-1422
TRUSTEES OFFICERS
Mario J. Gabelli, CFA Bruce N. Alpert
CHAIRMAN & CHIEF EXECUTIVE OFFICER, PRESIDENT
GAMCO INVESTORS, INC.
Carter W. Austin
Anthony J. Colavita VICE PRESIDENT
ATTORNEY-AT-LAW,
ANTHONY J. COLAVITA, P.C. Peter D. Goldstein
CHIEF COMPLIANCE OFFICER
James P. Conn
FORMER MANAGING DIRECTOR & James E. McKee
CHIEF INVESTMENT OFFICER, SECRETARY
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
Sheila J. Moore
Clarence A. Davis ASSISTANT VICE PRESIDENT & OMBUDSMAN
CHIEF EXECUTIVE OFFICER,
NESTOR, INC. Agnes Mullady
TREASURER
Mario d'Urso
CHAIRMAN, MITTEL CAPITAL MARKETS SPA David I. Schachter
VICE PRESIDENT
Arthur V. Ferrara
FORMER CHAIRMAN & CHIEF EXECUTIVE OFFICER, INVESTMENT ADVISER
GUARDIAN LIFE INSURANCE COMPANY OF AMERICA Gabelli Funds, LLC
One Corporate Center
Michael J. Melarkey Rye, New York 10580-1422
ATTORNEY-AT-LAW,
AVANSINO, MELARKEY, KNOBEL & MULLIGAN CUSTODIAN
Bank of New York Mellon
Edward T. Tokar
SENIOR MANAGING DIRECTOR, COUNSEL
BEACON TRUST COMPANY Skadden, Arps, Slate, Meagher & Flom LLP
Salvatore J. Zizza TRANSFER AGENT AND REGISTRAR
CHAIRMAN, ZIZZA & CO., LTD. American Stock Transfer and Trust Company
STOCK EXCHANGE LISTING
Common
------
NYSE-Symbol: GDL
Shares Outstanding: 21,255,236
The Net Asset Value per share appears in
the Publicly Traded Funds column, under
the heading "Specialized Equity Funds,"
in Monday's The Wall Street Journal. It
is also listed in Barron's Mutual
Funds/Closed End Funds section under the
heading "Specialized Equity Funds."
The Net Asset Value per share may be
obtained each day by calling (914)
921-5070 or visiting www.gabelli.com.
--------------------------------------------------------------------------------
For general information about the Gabelli Funds, call 800-GABELLI
(800-422-3554), fax us at 914-921-5118, visit Gabelli Funds' Internet homepage
at: WWW.GABELLI.COM, or e-mail us at: closedend@gabelli.com
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Fund may, from time to time, purchase
its common shares in the open market when the Fund's shares are trading at a
discount of 7.5% or more from the net asset value of the shares.
--------------------------------------------------------------------------------
THE GABELLI GLOBAL DEAL FUND
ONE CORPORATE CENTER
RYE, NY 10580-1422
(914) 921-5070
WWW.GABELLI.COM
SEMI-ANNUAL REPORT
JUNE 30, 2007
GDL 2Q/2007
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
There has been no change, as of the date of this filing, in any of the portfolio
managers identified in response to paragraph (a)(1) of this Item in the
registrant's most recently filed annual report on Form N-CSR.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
REGISTRANT PURCHASES OF EQUITY SECURITIES
=============================================================================================================================
(C) TOTAL NUMBER OF (D) MAXIMUM NUMBER (OR
SHARES (OR UNITS) APPROXIMATE DOLLAR VALUE) OF
(A) TOTAL NUMBER OF PURCHASED AS PART OF SHARES (OR UNITS) THAT MAY YET
SHARES (OR UNITS) (B) AVERAGE PRICE PAID PUBLICLY ANNOUNCED PLANS BE PURCHASED UNDER THE PLANS
PERIOD PURCHASED PER SHARE (OR UNIT) OR PROGRAMS OR PROGRAMS
=============================================================================================================================
Month #1 Common - N/A Common - N/A Common - N/A Common - 18,755,236
01/01/07
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
01/31/07
=============================================================================================================================
Month #2 Common - N/A Common - N/A Common - N/A Common - 18,755,236
02/01/07
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
02/28/07
=============================================================================================================================
Month #3 Common - N/A Common - N/A Common - N/A Common - 21,255,236
03/01/07
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
03/31/07
=============================================================================================================================
Month #4 Common - N/A Common - N/A Common - N/A Common - 21,255,236
04/01/07
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
04/30/07
=============================================================================================================================
Month #5 Common - N/A Common - N/A Common - N/A Common - 21,255,236
05/01/07
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
05/31/07
=============================================================================================================================
Month #6 Common - N/A Common - N/A Common - N/A Common - 21,255,236
06/01/07
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
06/30/07
=============================================================================================================================
Total Common - N/A Common - N/A Common - N/A N/A
Preferred - N/A Preferred - N/A Preferred - N/A
=============================================================================================================================
Footnote columns (c) and (d) of the table, by disclosing the following
information in the aggregate for all plans or programs publicly announced:
a. The date each plan or program was announced - The notice of the
potential repurchase of common and preferred shares occurs quarterly in
the Fund's quarterly report in accordance with Section 23(c) of the
Investment Company Act of 1940, as amended.
b. The dollar amount (or share or unit amount) approved - Any or all
common shares outstanding may be repurchased when the Fund's common
shares are trading at a discount of 7.5% or more from the net asset
value of the shares. Any or all preferred shares outstanding may be
repurchased when the Fund's preferred shares are trading at a discount
to the liquidation value of $25.00.
c. The expiration date (if any) of each plan or program - The Fund's
repurchase plans are ongoing.
d. Each plan or program that has expired during the period covered by the
table - The Fund's repurchase plans are ongoing.
e. Each plan or program the registrant has determined to terminate prior
to expiration, or under which the registrant does not intend to make
further purchases. - The Fund's repurchase plans are ongoing.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's Board of Directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these
controls and procedures required by Rule 30a-3(b) under the 1940 Act
(17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) The Gabelli Global Deal Fund
--------------------------------------------------------------------
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date August 31, 2007
----------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date August 31, 2007
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady, Principal Financial Officer
and Treasurer
Date August 31, 2007
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.