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
The Gabelli Global Deal Fund
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
Date of fiscal year end: December 31
Date of reporting period: June 30, 2008
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 LOGO)
THE GABELLI GLOBAL DEAL FUND
Semi-Annual Report
June 30, 2008
TO OUR SHAREHOLDERS,
Shares of The Gabelli Global Deal Fund (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. The Fund's NAV total return including
reinvestment of distributions was 2.40% since inception of investment
operations, compared with a gain of 4.11% for the 3 Month U.S. Treasury Bill
Index. On June 30, 2008, the Fund's NAV per share was $17.54, while the price of
the publicly traded shares closed at $15.51 on the NYSE.
Enclosed are the financial statements and the investment portfolio as of
June 30, 2008.
COMPARATIVE RESULTS
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 2008 (a)
Since
Year to Inception
Quarter Date 1 Year (01/31/07)
------- ------- ------ ---------
GABELLI GLOBAL DEAL FUND
NAV TOTAL RETURN (b) ........... (0.09)% (0.92)% (0.53)% 2.40%
INVESTMENT TOTAL RETURN (c) .... (0.56) 2.11 (7.61) (12.75)
3 Month U.S. Treasury Bill Index .. 0.31 1.20 3.63 4.11
Standard & Poor's 500 Index ....... (2.72) (11.90) (13.11) (6.04)
(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 500 INDEX IS AN
UNMANAGED INDICATOR OF STOCK MARKET PERFORMANCE. DIVIDENDS ARE CONSIDERED
REINVESTED EXCEPT FOR THE 3 MONTH U.S. TREASURY BILL INDEX. YOU CANNOT
INVEST DIRECTLY IN AN INDEX.
(b) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN THE 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.
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, 2008:
U.S. Government Obligations......... 53.9%
Energy and Utilities................ 8.4%
Business Services................... 5.3%
Financial Services.................. 4.8%
Computer Software and Services...... 4.2%
Food and Beverage................... 3.7%
Wireless Communications............. 3.6%
Media............................... 3.2%
Aerospace........................... 2.4%
Telecommunications.................. 2.2%
Health Care......................... 1.7%
Entertainment....................... 1.3%
Diversified Industrial.............. 1.1%
Transportation...................... 1.0%
Equipment and Supplies.............. 0.8%
Consumer Products................... 0.6%
Electronics......................... 0.6%
Hotels and Gaming................... 0.5%
Retail.............................. 0.2%
Automotive: Parts and Accessories... 0.2%
Educational Services................ 0.1%
Cable and Satellite................. 0.1%
Metals and Mining................... 0.1%
Automotive.......................... 0.0%
Materials........................... 0.0%
Agriculture......................... 0.0%
Environmental Services.............. 0.0%
Restaurants......................... 0.0%
Broadcasting........................ 0.0%
Specialty Chemicals................. 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, 2008. 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.
SHAREHOLDER MEETING - MAY 19, 2008 - FINAL RESULTS
The Gabelli Global Deal Fund's Annual Meeting of Shareholders was held on
May 19, 2008 at the Greenwich Library in Greenwich, Connecticut. At that
meeting, common shareholders elected James P. Conn, Clarence A. Davis, and
Arthur V. Ferrara as Trustees of the Fund. A total of 19,564,301 votes,
19,557,353 votes, and 19,556,252 votes were cast in favor of each Trustee and a
total of 434,411 votes, 441,359 votes, and 442,460 votes were withheld for each
Trustee, respectively.
Mario J. Gabelli, Anthony J. Colavita, Mario d'Urso, Michael J. Melarkey,
Edward T. Tokar, and Salvatore J. Zizza continue to serve in their capacities as
Trustees of the Fund.
We thank you for your participation and appreciate your continued support.
2
THE GABELLI GLOBAL DEAL FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
------------ ------------ ------------
COMMON STOCKS -- 46.1%
AEROSPACE -- 2.4%
120,000 DRS Technologies Inc. .............. $ 9,337,260 $ 9,446,400
------------ ------------
AGRICULTURE -- 0.0%
1,000 Provimi SA ......................... 46,580 26,514
------------ ------------
AUTOMOTIVE -- 0.0%
8,000 Lear Corp.+ ........................ 192,171 113,440
------------ ------------
AUTOMOTIVE: PARTS AND ACCESSORIES
-- 0.2%
60,300 CSK Auto Corp.+ .................... 567,186 631,944
------------ ------------
BROADCASTING -- 0.0%
1,000 Cumulus Media Inc., Cl. A+ ......... 11,045 3,940
------------ ------------
BUSINESS SERVICES -- 5.3%
8,000 Acxiom Corp. ....................... 97,703 91,920
270,000 ChoicePoint Inc.+ .................. 13,035,019 13,014,000
162,000 Diebold Inc. ....................... 6,156,136 5,763,960
3,000 Greenfield Online Inc.+ ............ 44,955 44,760
30,000 HireRight Inc.+ .................... 493,345 513,000
1,000 Interhyp AG ........................ 98,508 99,978
65,000 PHH Corp.+ ......................... 1,403,569 997,750
------------ ------------
21,329,235 20,525,368
------------ ------------
CABLE AND SATELLITE -- 0.1%
35,001 Zon Multimedia Servicos de
Telecomunicacoes e
Multimedia SGPS SA .............. 344,060 290,968
------------ ------------
COMPUTER SOFTWARE AND SERVICES --
4.2%
1,200 Affiliated Computer
Services Inc., Cl. A+ ........... 52,074 64,188
2,000 Ansoft Corp.+ ...................... 63,243 72,800
500,000 Electronic Data Systems Corp. ...... 12,200,963 12,320,000
20,000 Mentor Graphics Corp.+ ............. 304,179 316,000
14,000 NAVTEQ Corp.+ ...................... 1,051,256 1,078,000
2,000 NDS Group plc+ ..................... 119,072 118,400
1,000 Tumbleweed Communications Corp.+ ... 2,595 2,620
120,000 Yahoo! Inc.+ ....................... 3,438,228 2,479,200
------------ ------------
17,231,610 16,451,208
------------ ------------
CONSUMER PRODUCTS -- 0.6%
60,000 Harman International
Industries Inc. ................. 4,004,698 2,483,400
------------ ------------
DIVERSIFIED INDUSTRIAL -- 1.1%
540,000 Myers Industries Inc. .............. 11,964,243 4,401,000
------------ ------------
MARKET
SHARES COST VALUE
------------ ------------ ------------
EDUCATIONAL SERVICES -- 0.1%
35,000 Corinthian Colleges Inc.+ .......... $ 275,733 $ 406,350
------------ ------------
ELECTRONICS -- 0.6%
211,700 Alliance Semiconductor Corp. ....... 1,050,066 181,003
72,000 Bel Fuse Inc., Cl. A ............... 2,621,039 2,016,000
------------ ------------
3,671,105 2,197,003
------------ ------------
ENERGY AND UTILITIES -- 8.4%
2,100,000 Aquila Inc.+ ....................... 8,647,809 7,917,000
212,000 Endesa SA .......................... 11,163,934 10,327,298
50,000 Energy East Corp. .................. 1,276,211 1,236,000
78,000 NorthWestern Corp. ................. 2,372,010 1,982,760
1,000 Origin Energy Ltd. ................. 15,738 15,454
215,000 Puget Energy Inc. .................. 5,980,107 5,157,850
30,000 Saxon Energy Services Inc.+ ........ 204,633 210,356
600,000 Synenco Energy Inc., Cl. A+ ........ 5,321,774 5,289,791
100,000 WesternZagros Resources Ltd.+ ...... 303,795 292,243
------------ ------------
35,286,011 32,428,752
------------ ------------
ENTERTAINMENT -- 1.3%
200,000 Take-Two Interactive Software
Inc.+ ........................... 5,107,923 5,114,000
------------ ------------
ENVIRONMENTAL SERVICES -- 0.0%
2,000 Allied Waste Industries Inc.+ ...... 28,400 25,240
------------ ------------
EQUIPMENT AND SUPPLIES -- 0.8%
500,000 Enodis plc ......................... 2,371,768 3,171,994
1,000 Industrial Distribution Group
Inc.+ ........................... 11,955 11,990
5,000 Photon Dynamics Inc.+ .............. 75,375 75,400
------------ ------------
2,459,098 3,259,384
------------ ------------
FINANCIAL SERVICES -- 4.8%
12,000 Federal National Mortgage
Association ..................... 356,048 234,120
90,000 Hilb Rogal & Hobbs Co. ............. 3,960,185 3,911,400
165,000 SAFECO Corp. ....................... 10,975,125 11,081,400
150,000 SLM Corp.+ ......................... 4,728,875 2,902,500
24,048 Wachovia Corp. ..................... 989,751 373,465
------------ ------------
21,009,984 18,502,885
------------ ------------
See accompanying notes to financial statements.
3
THE GABELLI GLOBAL DEAL FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
------------ ------------ ------------
COMMON STOCKS (CONTINUED)
FOOD AND BEVERAGE -- 3.7%
15,000 Anheuser-Busch Companies Inc. ...... $ 914,889 $ 931,800
10,000 Bull-Dog Sauce Co. Ltd. ............ 31,857 23,073
1,000 Corn Products International Inc. ... 50,114 49,110
7,000 Reddy Ice Holdings Inc. ............ 145,915 95,760
170,000 Wm. Wrigley Jr. Co. ................ 13,081,147 13,222,600
------------ ------------
14,223,922 14,322,343
------------ ------------
HEALTH CARE -- 1.7%
15,000 Angelica Corp. ..................... 321,151 319,050
55,000 Applera Corp. ...................... 1,869,306 1,841,400
20,000 Apria Healthcare Group Inc.+ ....... 397,348 387,800
2,000 ArthroCare Corp.+ .................. 67,888 81,620
10,000 Barrier Therapeutics Inc.+ ......... 40,398 40,200
1,000 Bentley Pharmaceuticals Inc.+ ...... 15,647 16,150
4,000 Biogen Idec Inc.+ .................. 223,334 223,560
2,000 Enzon Pharmaceuticals Inc.+ ........ 17,870 14,240
30,000 Tercica Inc.+ ...................... 264,450 264,900
300,000 Third Wave Technologies Inc.+ ...... 3,344,535 3,348,000
------------ ------------
6,561,927 6,536,920
------------ ------------
HOTELS AND GAMING -- 0.5%
60,164 MGM Mirage+ ........................ 4,120,272 2,038,958
------------ ------------
MATERIALS -- 0.0%
12,500 Intertape Polymer Group Inc.+ ...... 58,500 41,000
------------ ------------
MEDIA -- 3.2%
78,000 APN News & Media Ltd. .............. 366,053 222,829
330,000 Cablevision Systems Corp., Cl. A+ .. 10,954,602 7,458,000
134,000 Clear Channel Communications Inc. .. 4,818,282 4,716,800
------------ ------------
16,138,937 12,397,629
------------ ------------
METALS AND MINING -- 0.1%
11,000 Esmark Inc.+ ....................... 183,355 210,320
12,000 Uranium One Inc.+ .................. 102,094 56,487
------------ ------------
285,449 266,807
------------ ------------
RESTAURANTS -- 0.0%
1,000 Landry's Restaurants Inc. .......... 19,730 17,970
------------ ------------
MARKET
SHARES COST VALUE
------------ ------------ ------------
RETAIL -- 0.2%
20,000 Corporate Express NV ............... $ 267,078 $ 288,755
4,001 Finish Line+ ....................... 32,848 34,809
15,000 Genesco Inc.+ ...................... 676,897 463,050
------------ ------------
976,823 786,614
------------ ------------
SPECIALTY CHEMICALS -- 0.0%
320 Mitsubishi Chemical Holdings
Corp. ........................... 2,566 1,862
------------ ------------
TELECOMMUNICATIONS -- 2.2%
1,000,000 Asia Satellite Telecommunications
Holdings Ltd. ................... 2,244,549 1,539,004
10,000 BCE Inc. ........................... 345,780 348,100
55,000 Portugal Telecom SGPS SA ........... 666,634 624,351
500,000 Radyne Corp.+ ...................... 5,648,548 5,715,000
3,000 Superior Essex Inc.+ ............... 134,099 133,890
------------ ------------
9,039,610 8,360,345
------------ ------------
TRANSPORTATION -- 1.0%
18,000 Geodis SA .......................... 3,760,095 3,812,325
------------ ------------
WIRELESS COMMUNICATIONS -- 3.6%
310,000 Rural Cellular Corp., Cl. A+ ....... 13,592,915 13,798,100
------------ ------------
TOTAL COMMON STOCKS ................ 201,647,088 178,688,669
------------ ------------
PRINCIPAL
AMOUNT
------------
U.S. GOVERNMENT OBLIGATIONS -- 53.9%
U.S. TREASURY BILLS -- 53.5%
$208,517,000 U.S. Treasury Bills,
1.220% to 2.038%++,
07/03/08 to 11/28/08 ............ $207,830,609 $207,726,863
------------ ------------
U.S. TREASURY NOTES -- 0.4%
1,440,000 U.S. Treasury Note,
5.000%, 07/31/08 ................ 1,443,395 1,443,395
------------ ------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS ..................... 209,274,004 209,170,258
------------ ------------
TOTAL INVESTMENTS -- 100.0% ....................... $410,921,092 $387,858,927
============
FORWARD FOREIGN EXCHANGE CONTRACT
(Unrealized appreciation) ...................... --
------------
OTHER ASSETS AND LIABILITIES (NET) ................ (14,840,561)
------------
NET ASSETS -- COMMON SHARES
(21,270,610 common shares outstanding) ......... $373,018,366
============
NET ASSET VALUE PER COMMON SHARE
($373,018,366 / 21,270,610 shares
outstanding) ................................... $ 17.54
============
See accompanying notes to financial statements.
4
THE GABELLI GLOBAL DEAL FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2008 (UNAUDITED)
PRINCIPAL SETTLEMENT UNREALIZED
AMOUNT DATE APPRECIATION
------------ ------------ ------------
FORWARD FOREIGN EXCHANGE
CONTRACTS -- 0.0%
6,342,726(a) Deliver Euros in exchange for
USD9,975,584 .................... 07/31/08 $ --(b)
============
----------
(a) Principal amount denoted in Euros.
(b) Amount is less than $1.00.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
USD U.S. Dollars
% OF
MARKET MARKET
GEOGRAPHIC DIVERSIFICATION VALUE VALUE
-------------------------- ------ ------------
United States ........................................... 93.1% $361,058,145
Europe .................................................. 4.8 18,760,582
Canada .................................................. 1.6 6,237,977
Latin America ........................................... 0.4 1,539,004
Asia/Pacific ............................................ 0.1 238,283
Japan ................................................... 0.0 24,936
----- ------------
Total Investments ....................................... 100.0% $387,858,927
===== ============
See accompanying notes to financial statements.
5
THE GABELLI GLOBAL DEAL FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2008 (UNAUDITED)
ASSETS:
Investments, at value (cost $410,921,092) .................... $387,858,927
Foreign currency, at value (cost $23,152) .................... 23,274
Deposit at broker ............................................ 305,054
Receivable for investments sold .............................. 2,552,136
Dividends and interest receivable ............................ 228,075
Unrealized appreciation on swap contracts .................... 69,082
Prepaid expense .............................................. 13,212
------------
TOTAL ASSETS ................................................. 391,049,760
------------
LIABILITIES:
Payable to custodian ......................................... 631,758
Payable for investments purchased ............................ 15,205,439
Unrealized depreciation on swap contracts .................... 4,138
Distributions payable ........................................ 1,912,363
Payable for investment advisory fees ......................... 156,844
Payable for payroll expenses ................................. 46,572
Payable for accounting fees .................................. 3,750
Other accrued expenses ....................................... 70,530
------------
TOTAL LIABILITIES ............................................ 18,031,394
------------
NET ASSETS applicable to 21,270,610
shares outstanding ........................................ $373,018,366
NET ASSETS CONSIST OF:
Paid-in capital, at $0.001 par value ......................... $396,014,020
Net unrealized depreciation on investments ................... (23,062,165)
Net unrealized appreciation on swap contracts ................ 64,944
Net unrealized appreciation on foreign
currency translations ..................................... 1,567
------------
NET ASSETS ................................................... $373,018,366
============
NET ASSET VALUE PER COMMON SHARE:
($373,018,366 / 21,270,610 shares outstanding;
unlimited number of shares authorized) ....................... $ 17.54
============
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2008 (UNAUDITED)
INVESTMENT INCOME:
Dividends (net of foreign taxes of $64,495) .................. $ 1,162,173
Interest ..................................................... 2,033,123
-----------
TOTAL INVESTMENT INCOME ...................................... 3,195,296
-----------
EXPENSES:
Investment advisory fees ..................................... 963,354
Shareholder communications expenses .......................... 87,400
Payroll expenses ............................................. 58,767
Trustees' fees ............................................... 32,953
Custodian fees ............................................... 26,885
Accounting fees .............................................. 22,500
Legal and audit fees ......................................... 18,535
Shareholder services fees .................................... 5,260
Miscellaneous expenses ....................................... 35,395
-----------
TOTAL EXPENSES ............................................... 1,251,049
Less: Custodian fee credits .................................. (21,520)
-----------
NET EXPENSES ................................................. 1,229,529
-----------
NET INVESTMENT INCOME ........................................ 1,965,767
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, SWAP
CONTRACTS, SECURITIES SOLD SHORT, AND FOREIGN CURRENCY:
Net realized gain on investments ............................. 3,182,378
Net realized loss on swap contracts .......................... (425,772)
Net realized loss on securities sold short ................... (6,283)
Net realized loss on foreign currency transactions ........... (105,708)
-----------
Net realized gain on investments, swap contracts, securities
sold short, and foreign currency transactions ............. 2,644,615
-----------
Net change in unrealized appreciation/depreciation:
on investments ............................................ (8,285,711)
on swap contracts ......................................... 369,138
on securities sold short .................................. 5,363
on foreign currency translations .......................... (203,961)
-----------
Net change in unrealized appreciation/depreciation on
investments, swap contracts, securities sold short, and
foreign currency translations ............................. (8,115,171)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, SWAP
CONTRACTS, SECURITIES SOLD SHORT, AND FOREIGN CURRENCY .... (5,470,556)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ......... $(3,504,789)
===========
See accompanying notes to financial statements.
6
THE GABELLI GLOBAL DEAL FUND
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 2008 PERIOD ENDED
(UNAUDITED) DECEMBER 31, 2007 (a)
---------------- ---------------------
OPERATIONS:
Net investment income ............................................................ $ 1,965,767 $ 7,799,851
Net realized gain on investments, swap contracts, securities sold short, and
foreign currency transactions ................................................. 2,644,615 20,614,306
Net change in unrealized appreciation/depreciation on investments, swap contracts,
securities sold short, and foreign currency translations ...................... (8,115,171) (14,880,483)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .................. (3,504,789) 13,533,674
------------ ------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ............................................................ (2,657,184)* (6,348,376)
Net realized gain on investments, swap contracts, securities sold short, and
foreign currency transactions ................................................. (4,820,572)* (19,198,407)
Return of capital ................................................................ (9,542,732)* --
------------ ------------
TOTAL DISTRIBUTIONS TO COMMON SHAREHOLDERS ....................................... (17,020,488) (25,546,783)
------------ ------------
FUND SHARE TRANSACTIONS:
Net increase in net assets from common shares issued in offering and
reinvestment of distributions ................................................. -- 406,953,927
Net decrease from repurchase of common shares .................................... (473,384) (173,799)
Offering costs for common shares charged to paid-in-capital ...................... -- (850,000)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM FUND SHARE TRANSACTIONS ............... (473,384) 405,930,128
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ............................................ (20,998,661) 393,917,019
NET ASSETS:
Beginning of period .............................................................. 394,017,027 100,008
------------ ------------
End of period (including undistributed net investment income
of $0 and $691,417, respectively) ............................................. $373,018,366 $394,017,027
============ ============
----------
(a) The Gabelli Global Deal Fund commenced investment operations on January 31,
2007.
* Based on current earnings and subject to change and recharacterization at
fiscal year end.
See accompanying notes to financial statements.
7
THE GABELLI GLOBAL DEAL FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT
EACH PERIOD:
SIX MONTHS ENDED
JUNE 30, 2008 PERIOD ENDED
(UNAUDITED) DECEMBER 31, 2007 (f)
---------------- ---------------------
OPERATING PERFORMANCE:
Net asset value, beginning of period .................................. $ 18.50 $ 19.06(g)
Net investment income (a) ............................................. 0.09 0.37
Net realized and unrealized gain (loss) on investments, swap contracts,
and foreign currency transactions ..................................... (0.25) 0.27
-------- --------
Total from investment operations ...................................... (0.16) 0.64
-------- --------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ................................................. (0.12)* (0.30)
Net realized gains on investments, swap contracts, and foreign currency
transactions........................................................ (0.23)* (0.90)
Return of capital ..................................................... (0.45)* --
-------- --------
Total distributions to common shareholders ............................ (0.80) (1.20)
-------- --------
FUND SHARE TRANSACTIONS:
Increase in net asset value from common share transactions ............ 0.00(d) 0.00(d)
-------- --------
NET ASSET VALUE, END OF PERIOD ........................................ $ 17.54 $ 18.50
======== ========
Net asset value total return + ........................................ (0.92)% 3.35%
======== ========
Market value, end of period ........................................... $ 15.51 $ 15.96
======== ========
Total investment return ++ ............................................ 2.11% (14.55)%
======== ========
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:
Net assets end of period (in 000's) ................................... $373,018 $394,017
Ratio of net investment income to average net assets .................. 1.02%(e) 2.12%(e)
Ratio of operating expenses to average net assets (b)(c) .............. 0.65%(e) 0.64%(e)
Portfolio turnover rate ............................................... 145% 177%+++
----------
+ Based on net asset value per share at commencement of operations of $19.06
per share, adjusted for reinvestment of distributions at the net asset
value per share on the ex-dividend dates. Total returns for periods of less
than one year are not annualized.
++ Based on market value per share at initial public offering of $20.00 per
share, adjusted for reinvestments of distributions at prices obtained under
the Fund's dividend reinvestment plan. Total returns for periods of less
than one year are not annualized.
+++ Effective in 2008, a change in accounting policy was adopted with regard to
the calculation of the portfolio turnover rate. Had this policy been
adopted retroactively, the portfolio turnover rate for the period ended
December 31, 2007 would have been 411%.
* Based on current earnings and subject to change and recharacterization at
fiscal year end.
(a) Per share amounts have been calculated using the average shares method.
(b) 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 six months ended June 30,
2008 and period ended December 31, 2007 would have been 0.64% and 0.63%,
respectively.
(c) The Fund incurred interest expense during the period ended December 31,
2007. If interest expense had not been incurred, the ratio of operating
expenses to average net assets would have been 0.62%.
(d) Amount represents less than $0.005 per share.
(e) Annualized.
(f) The Gabelli Global Deal Fund commenced investment operations on January 31,
2007.
(g) The beginning of period NAV reflects a $0.04 reduction for costs associated
with the initial public offering.
See accompanying notes to financial statements.
8
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.
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
9
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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 American Depositary
Receipt ("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.
On January 1, 2008, the Fund adopted Statement of Financial Accounting
Standard No. 157, "Fair Value Measurements" ("SFAS 157") that clarifies the
definition of fair value for financial reporting, establishes a framework for
measuring fair value, and requires additional disclosures about the use of fair
value measurements. The three levels of the fair value hierarchy under SFAS 157
are described below:
- Level 1 - quoted prices in active markets for identical securities;
- Level 2 - other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speeds, credit
risk, etc.); and
- Level 3 - significant unobservable inputs (including the Fund's
determinations as to the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily
an indication of the risk associated with investing in those securities. The
summary of inputs used to value the Fund's net assets as of June 30, 2008 is as
follows:
INVESTMENTS IN OTHER FINANCIAL
SECURITIES INSTRUMENTS (UNREALIZED
VALUATION INPUTS (MARKET VALUE) APPRECIATION)*
---------------- -------------- -----------------------
Level 1 - Quoted Prices ..................... $178,688,669 --
Level 2 - Other Significant Observable
Inputs ................................... 209,170,258 $64,944
------------ -------
TOTAL ....................................... $387,858,927 $64,944
============ =======
----------
* Other financial instruments are derivative instruments not reflected in the
Schedule of Investments, such as futures, forwards, and swaps which are
valued at the unrealized appreciation/depreciation on the investment.
In March 2008, The Financial Accounting Standards Board (The "FASB") issued
Statement of Financial Accounting Standard No. 161, "Disclosures about
Derivative Instruments and Hedging Activities" ("SFAS 161") that is effective
for fiscal years beginning after November 15, 2008. SFAS 161 is intended to
improve financial reporting for derivative instruments by requiring enhanced
disclosure that enables investors to understand how and why an entity uses
derivatives, how derivatives are accounted for, and how derivative instruments
affect an entity's results of operations and financial position. Management is
currently evaluating the implications of SFAS 161 on the Fund's financial
statement disclosures.
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,
2008, there were no open repurchase agreements.
10
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
SWAP AGREEMENTS. The Fund may enter into equity and contract for difference
swap transactions. The use of swaps and caps is a highly specialized activity
that involves investment techniques and risks different from those associated
with ordinary portfolio transactions. In a swap, 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 a
swap contract 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 a swap
contract. The creditworthiness of the swap contract counterparties is closely
monitored in order to minimize this risk. Depending on the general state of
short-term interest rates and the returns on the Fund's portfolio securities at
that point in time, such a default could negatively affect the Fund's ability to
make dividend payments. In addition, at the time the a 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.
The use of derivative instruments involves, to varying degrees, elements of
market and counterparty risk in excess of the amount recognized below.
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 a periodic payment or termination of swap agreements.
The Fund has entered into contract for difference swap agreements with
Bear, Stearns International Limited. Details of the swaps at June 30, 2008 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:
$ 6,277 (1,000 Shares) J Sainsbury plc J Sainsbury plc 09/15/08 $ 21
-- -- MTL Instruments Group plc MTL Instruments Group plc 11/17/08 (41)
158,410 (2,000 Shares) Xstrata plc Xstrata plc 02/17/09 160
3,155,544 (98,400 Shares) Expro International Group plc Expro International Group plc 03/16/09 5,240
66,495 (100,000 Shares) Gulf Keystone Petroleum Ltd. Gulf Keystone Petroleum Ltd. 03/17/09 (4,097)
1,794,038 (360,000 Shares) Chloride Group plc Chloride Group plc 04/15/09 63,661
-------
$64,944
=======
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.
11
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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, 2008, 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. At June 30, 2008, there were no securities
sold short.
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. Forward foreign exchange contracts at June 30, 2008
are reflected in the Schedule of Investments.
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 purchase 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.
12
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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.
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.
The tax character of distributions paid during the period ended December
31, 2007 was as follows:
DISTRIBUTIONS PAID FROM:
Ordinary income
(inclusive of short-term capital gains) .. $25,546,783
-----------
Total distributions paid .................... $25,546,783
===========
13
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify 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.
As of December 31, 2007, the components of accumulated earnings/(losses) on
a tax basis were as follows:
Net unrealized depreciation on investments ........... $(15,068,398)
Net unrealized depreciation on foreign currency and
swap contracts .................................... (98,666)
Undistributed ordinary income ........................ 2,991,405
Post-October currency loss deferral .................. (141,644)
Other temporary differences .......................... 304,194
------------
Total ................................................ $(12,013,109)
============
The following summarizes the tax cost of investments and the related
unrealized appreciation/(depreciation) at June 30, 2008:
GROSS GROSS NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
COST APPRECIATION DEPRECIATION (DEPRECIATION)
------------ ------------ ------------- --------------
Investments ..... $411,458,243 $1,979,026 $(25,578,342) $(23,599,316)
Swap contracts .. -- 69,082 (4,138) 64,944
------------ ---------- ------------ ------------
$411,458,243 $2,048,108 $(25,582,480) $(23,534,372)
============ ========== ============ ============
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109" (the "Interpretation") established a
minimum threshold for financial statement recognition of the benefit of
positions taken in filing tax returns (including whether the Fund is taxable in
a particular jurisdiction) and required certain expanded tax disclosures.
For the six months ended June 30, 2008, the Fund did not have any liability
for any unrecognized tax benefits. The Fund recognizes interest and penalties,
if any, related to unrecognized tax benefits as income tax expenses in the
Statement of Operations. The Fund has adopted the Interpretation for all open
tax years and it had no impact on the amounts reported in the financial
statements.
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 a calendar year end if the
Fund's total return on its managed assets during the year exceeds the total
return of the 3 Month U.S. Treasury Bill Index (the "T-Bill Index") during the
same period. For every four basis points that the Fund's total return exceeds
the T-Bill Index, the Fund will accrue weekly and pay annually one 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. For
the six months ended June 30, 2008,
14
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
the Fund did not accrue a performance fee to the Adviser. 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 six months ended June 30, 2008, the Fund paid brokerage
commissions on security trades of $132,406 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 six
months ended June 30, 2008, the Fund paid or accrued $22,500 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 who 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) and pays its allocated portion of the cost of the Fund's Chief
Compliance Officer. For the six months ended June 30, 2008, the Fund paid or
accrued $58,767, which is included in payroll expenses in the Statement of
Operations.
The Fund pays each Trustee who is not considered to be an affiliated person
an annual retainer of $6,000 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. In addition, the Audit Committee
Chairman receives an annual fee of $3,000, the Nominating Committee Chairman
receives an annual fee of $2,000, and the Lead Trustee receives an annual fee of
$1,000. 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 six months ended June 30, 2008, other than short-term securities and U.S.
Government obligations, aggregated $291,987,156 and $368,084,208, respectively.
Purchases and proceeds from the sales of U.S. Government obligations for
the six months ended June 30, 2008, other than short-term obligations,
aggregated $1,459,800 and $23,685,000, 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 on 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 six months ended June
30, 2008, the Fund repurchased 30,000 shares of its common stock in the open
market at a cost of $473,384 and an average discount of approximately 12.99%
from its NAV. All shares of common stock repurchased have been retired.
Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED
JUNE 30, 2008 PERIOD ENDED
(UNAUDITED) DECEMBER 31, 2007 (A)
--------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ---------- ---------- ------------
Initial seed capital .............................. -- -- 5,236 $ 100,008
Shares issued in offering
(net of underwriting fees and offering costs) .. -- -- 21,250,000 405,025,000
Shares issued upon reinvestment of distributions .. -- -- 55,874 1,078,927
Shares repurchased ................................ (30,000) $(473,384) (10,500) (173,799)
------- --------- ---------- ------------
Net increase ...................................... (30,000) $(473,384) 21,300,610 $406,030,136
======= ========= ========== ============
----------
(a) The Gabelli Global Deal Fund commenced investment operations on January 31,
2007.
15
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
At the Fund's February 19, 2008 Board meeting, the Board approved the
filing of a shelf registration with the SEC which will give the Fund the ability
to offer preferred shares, notes, or subscription rights to purchase preferred
shares.
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. On April 24, 2008, the Adviser entered into an administrative
settlement with the SEC to resolve the SEC's inquiry regarding prior frequent
trading activity in shares of the GAMCO Global Growth Fund (the "Global Growth
Fund") by one investor who was banned from the Global Growth Fund in August
2002. In the settlement, the SEC found that the Adviser had violated Section
206(2) of the Investment Advisers Act, Section 17(d) of the 1940 Act and Rule
17d-1 thereunder, and had aided and abetted and caused violations of Section
12(d)(1)(B)(i) of the 1940 Act. Under the terms of the settlement, the Adviser,
while neither admitting nor denying the SEC's findings and allegations, agreed,
among other things, to pay the previously reserved total of $16 million
(including a $5 million penalty), of which at least $11 million will be
distributed to shareholders of the Global Growth Fund in accordance with a plan
to be developed by an independent distribution consultant and approved by the
independent directors of the Global Growth Fund and the staff of the SEC, and to
cease and desist from future violations of the above referenced federal
securities laws. The settlement will not have a material adverse impact on the
Adviser or its ability to fulfill its obligations under the Advisory Agreement.
On the same day, the SEC filed a civil action against the Executive Vice
President and Chief Operating Officer of the Adviser, alleging violations of
certain federal securities laws arising from the same matter. The officer is
also an officer of the Global Growth Fund and other funds in the Gabelli/GAMCO
fund complex. The officer denies the allegations and is continuing in his
positions with the Adviser and the funds. The Adviser currently expects that any
resolution of the action against the officer will not have a material adverse
impact on the Adviser or its ability to fulfill its obligations under the
Advisory Agreement.
On a separate matter, in August 2008, the Adviser made an offer to the
staff of the SEC to settle a previously disclosed matter concerning compliance
with Section 19(a) and Rule 19a-1 of the 1940 Act by two closed-end funds
managed by the Adviser. These provisions require registered investment companies
to provide written statements to shareholders when a distribution is made in the
nature of a dividend from a source other than net investment income. While the
two funds sent annual statements and provided other materials containing this
information, the funds did not send the notices required by Rule 19a-1 to
shareholders with each distribution in 2002 and 2003. The Adviser believes that
the funds have been in compliance with Rule 19a-1 since that time. The Adviser
believes that the settlement would have no effect on the funds or any material
adverse effect on the Adviser or its ability to manage the funds. This offer of
settlement is subject to final agreement regarding the specific language of the
SEC's administrative order and other settlement documents and approval by the
SEC.
16
THE GABELLI GLOBAL DEAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
COMMON SHARES
CUSIP: 36245G103
We are pleased to report the payment of a distribution in the amount of $0.40
per share payable on June 24, 2008 to shareholders of record on June 16, 2008.
As of the record date, $0.044 per share of the distribution is derived from net
investment income, $0.097 per share of the distribution is derived from capital
gains, and the remainder of the distribution, or $0.259 per share, is deemed a
return of capital. These estimates are based on earnings as of the record date.
After giving effect to the distribution, the aggregate of the undistributed net
realized losses on the sale of securities and net unrealized depreciation of
portfolio securities is $16,546,655, of which $15,349,268 represents net
unrealized depreciation of portfolio securities. Prior distributions within 2008
would have similar characterizations. The actual composition of the distribution
may change based on the Fund's investment activity through December 31, 2008.
Shareholders will be notified regarding the components of all distributions for
the year and the related tax treatment via Form 1099-DIV in early 2009.
17
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 credit 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.
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
(FLAGS)
TRUSTEES AND OFFICERS
THE GABELLI GLOBAL DEAL FUND
ONE CORPORATE CENTER, RYE, NY 10580-1422
TRUSTEES
Mario J. Gabelli, CFA
CHAIRMAN & CHIEF EXECUTIVE OFFICER,
GAMCO INVESTORS, INC.
Anthony J. Colavita
ATTORNEY-AT-LAW,
ANTHONY J. COLAVITA, P.C.
James P. Conn
FORMER MANAGING DIRECTOR &
CHIEF INVESTMENT OFFICER,
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
Clarence A. Davis
CHIEF EXECUTIVE OFFICER,
NESTOR, INC.
Mario d'Urso
FORMER ITALIAN SENATOR
Arthur V. Ferrara
FORMER CHAIRMAN & CHIEF EXECUTIVE OFFICER,
GUARDIAN LIFE INSURANCE COMPANY OF AMERICA
Michael J. Melarkey
ATTORNEY-AT-LAW,
AVANSINO, MELARKEY, KNOBEL & MULLIGAN
Edward T. Tokar
SENIOR MANAGING DIRECTOR,
BEACON TRUST COMPANY
Salvatore J. Zizza
CHAIRMAN, ZIZZA & CO., LTD.
OFFICERS
Bruce N. Alpert
PRESIDENT
Carter W. Austin
VICE PRESIDENT
Peter D. Goldstein
CHIEF COMPLIANCE OFFICER
Sheila J. Moore
ASSISTANT VICE PRESIDENT & OMBUDSMAN
Agnes Mullady
TREASURER AND SECRETARY
David I. Schachter
VICE PRESIDENT
INVESTMENT ADVISER
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
CUSTODIAN
The Bank of New York Mellon
COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
TRANSFER AGENT AND REGISTRAR
American Stock Transfer and Trust Company
STOCK EXCHANGE LISTING
Common
----------
NYSE-Symbol: GDL
Shares Outstanding: 21,270,610
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, 2008
GDL Q2/2008
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. INVESTMENTS.
(a) 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.
(b) Not applicable.
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 - 21,300,610
01/01/08
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
01/31/08
=============================================================================================================================
Month #2 Common - 15,000 Common - $16.2003 Common - 15,000 Common - 21,300,610 - 15,000 =
02/01/08 21,285,610
through Preferred - N/A Preferred - N/A Preferred - N/A
02/28/08 Preferred - N/A
=============================================================================================================================
Month #3 Common - 15,000 Common - $15.6762 Common - 15,000 Common - 21,285,610 - 15,000 =
03/01/08 21,270,610
through Preferred - N/A Preferred - N/A Preferred - N/A
03/31/08 Preferred - N/A
=============================================================================================================================
Month #4 Common - N/A Common - N/A Common - N/A Common - 21,270,610
04/01/08
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
04/30/08
=============================================================================================================================
Month #5 Common - N/A Common - N/A Common - N/A Common - 21,270,610
05/01/08
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
05/31/08
=============================================================================================================================
Month #6 Common - N/A Common - N/A Common - N/A Common - 21,270,610
06/01/08
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
06/30/08
=============================================================================================================================
Total Common - 30,000 Common - $15.9382 Common - 30,000 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 9/3/08
----------------------------------------------------------------------------
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 9/3/08
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady,
Principal Financial Officer and Treasurer
Date 9/3/08
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.