Star Wars At Gabelli

Elizabeth R. Bramwell admits that the past couple of weeks have left her shaken. For years, she had fancied the notion of moving out from under the shadow of her famous boss, money manager Mario J. Gabelli, and hanging out her own shingle. But as recently as a month ago, Bramwell hadn't imagined she would be sitting behind an empty desk in an empty office in midtown Manhattan, ordering new business cards and office supplies. "It was a very abrupt move," she says.

Indeed it was. On Feb. 10, Bramwell jolted the investment community by announcing that she was leaving Gabelli Growth Fund--Gabelli's third-largest--to launch her own money-management firm, Bramwell Capital Management. One of Wall Street's top professionals was striking out on her own.

Was this a clash of egos? Mario Gabelli, whose firm's 11 funds manage $2.6 billion in assets, declined to comment. A statement from the company merely cheered Bramwell's entrepreneurialism and noted that Gabelli and a team of analysts would assume responsibility for the fund until a successor is found.

OUTRANKED. But Bramwell suggests that Gabelli may have felt threatened by her fund's performance. Gabelli Growth's 114.4% return over the past five years has earned it a ranking of 193 out of 1,399 mutual funds tracked by Lipper Analytical Services. Gabelli Asset Fund, the firm's crown jewel (managed by Mario Gabelli), ranks 337 based on its 98.1% return during that period--slightly below the Lipper universe average. Says Bramwell: "There has never been room over there for two stars."

Bramwell, who met Mario Gabelli 25 years ago when both were students at Columbia University's business school, gained fame in the late 1980s by racking up hefty returns in growth investing. She joined Gabelli's firm in 1985 after running a hedge fund at William D. Witter Inc. Starting with a portfolio of small-capitalization, value-oriented stocks in communications and technology, she jumped in 1990 into big-cap, recession-resistant companies such as Corning Inc. and Gillette Co. Her fund grew from $100 million in assets at its April, 1987, inception to $675 million and produced an average annual return of 16.8%. An investment of $10,000 at the beginning of her tenure would be worth $28,380 today.

Lately, though, Bramwell's performance has been disappointing. The fund returned 11.3% in 1993. Bramwell says she was hurt by a lack of staff support at Gabelli, where she had one analyst and an administrative assistant. "I didn't see why my record should suffer and the stockholders should suffer because [Gabelli] didn't want to commit more resources," she says.

Bramwell says her decision to resign was sealed with a dispute over her refusal to relocate her office from Manhattan to Rye, N.Y., where the company has been headquartered for two years. Now, safely ensconced in the city, she won't discuss details of her new business--but says it will probably follow a strategy similar to the one she practiced at Gabelli Growth Fund. She's busy trying to find a sharp support staff. Investors, she says, are no problem: "I'm sure they're going to find me."

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