- Investment is through a convertible note with a 4.5% coupon
- Cascade has made such an investment in Gamco previously
Cascade Investment, the family office that invests the wealth of Microsoft Corp. co-founder Bill Gates, has agreed to purchase a note that could be converted into a 15.9 percent stake in Gamco Investors Inc., the asset management firm founded by Mario Gabelli.
Cascade has invested in Gamco previously, Douglas Jamieson, Gamco’s president and chief operating officer, said in a phone interview Thursday. One of Cascade’s investment officers, Alan Heuberger, was once on Gamco’s board.
The $110 million, five-year convertible note has a coupon of 4.5 percent, converts into Gamco’s Class A common stock at $55 a share and provides certain put rights and an escrow agreement, according to a regulatory filing Thursday and an Aug. 16 statement from Gamco. The position would make Cascade one of the largest investors in Gamco upon conversion.
Cascade didn’t immediately respond to requests for comment.
Gamco, based in Rye, New York, had $39.3 billion under management as of June 30. It was founded in 1976 by Gabelli, the stock fund manager who is the firm’s chairman and chief executive officer. With 10.7 million shares outstanding, Gamco has a market capitalization of $917.1 million.
Other firms investing for a wealthy family have bet on money managers in recent years. The family office of Alphabet Inc. Chairman Eric Schmidt bought a 20 percent stake last year in hedge fund manager D.E. Shaw.