Mario Gabelli to Launch ETF to Invest in John Malone’s Companies

  • Fund will be able to buy shares in 32 Malone-related entities
  • Billionaire Malone has generated market-beating returns

John Malone has something that sets him apart from his fellow billionaires: an ETF dedicated to his investments.

Mario Gabelli’s Gamco Investors Inc. is set to launch an actively managed exchange-traded fund that will invest in companies associated with Malone, who made his fortune in the cable television and media businesses. The Gabelli Media Mogul NextShares will buy 32 different stocks in which Malone has had a hand, including Liberty Global Plc, Liberty Broadband Corp. and Liberty Media Corp.-Liberty SiriusXM.

The Malone fund comes as more ETFs take a laser focus on small niches, such as the liquor industry. Eric Balchunas, an analyst with Bloomberg Intelligence, said the Malone ETF is the first such fund he knows of that targets only one investor and his businesses.

“I’ve had clients and friends over the years who have asked me, ‘Which Malone stock should I buy?” said Christopher Marangi, a portfolio manager at Rye, New York-based Gamco. The ETF, expected to debut in early December, will offer investors a one-stop Malone security, said Marangi, who will manage the fund and decide how much of each of the 32 stocks to own at any one time.

The collection of companies that resulted from the spinoff of Liberty Media from AT&T returned an annual average of about 13 percent from the end of 2003, according to Marangi. That’s better than the S&P 500 Index. Malone, 75, is worth $8.2 billion, according to data compiled by Bloomberg.

NextShares, created by Boston-based Eaton Vance Corp., are known as exchange-traded managed funds and are designed for active managers who don’t want to disclose their holdings on a daily basis. Active ETFs account for only about 1 percent of the $2.5 trillion U.S. ETF market, according to Balchunas.

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