“Never Forget Where You Came From, Always Pay It Forward, And Listen Before Reacting” With Michael Gabelli
“In my mind, you should never forget where you came from, always pay it forward, and listen before reacting. Borrowing from my love of sports — don’t forget to coach and teach and utilize the talents of those on your team, from the superstars to the role players. Be strong, be fair, be understanding. Create a contributory culture and environment within your business where people feel like they can do more, contribute more, and affect outcomes. And of course — where they can make more for our clients, shareholders, and for themselves.”
I had the pleasure of interviewing Michael Gabelli, President & CEO of Gabelli and Partners, Managing Director — Director of Global Business Development, Director of Alternative Investments at GAMCO Investors and Associated Capital Group.
Thank you so much for doing this with us! What is your “backstory”?
I’m the youngest of four children and grew up in a fairly conservative Italian-American family in Eastchester, New York. My father is Mario Gabelli, the well-known investor, and my mother Elaine became a teacher after graduating from college. Both of my parents came from humble beginnings — my father was the child of immigrants who came to this country with basically nothing. They were loving parents, though disciplinarians, and very focused on their jobs outside the home.
I attended public school until the 5th grade, and then Catholic schools through high school. I attended Boston College for my undergraduate degree, NYU for a Masters in Sports Business and then Columbia for my MBA. I originally wanted to work in professional sports, possibly in the areas of team operations or player development. I had internships during college with pro teams including the New York Giants, the New York Knicks and the Boston Celtics. From a young age, I hated being idle and always played sports or worked every summer — whether for pro sports teams, at different Wall Street firms, or at GAMCO, Investors, Inc.
My first job out of college was at Madison Square Garden, in season subscription and suite sales. That area was limiting for what I considered my core skills — analysis and research — so I started applying for jobs outside that area, specifically within the finance department.
I didn’t land the job of my dreams (to sign NBA players to max contracts) so instead I went to work for Bear Stearns in institutional equity research sales from 2001–2003. It was a tremendous learning experience for me as I worked with very senior people and observed how they ran a business, developed and sold products, and was exposed to the areas of capital markets, trading, and research.
Looking back, while searching along different career paths I always held out the possibility of going to work for the family business. Before doing so I took one last shot when I looked seriously into a professional sports operating role or banking position (while doing my Masters at NYU) and had the great fortune to speak to a sports banker who I respected and trusted. He told me what I probably knew deep down — that I should go work for my family. His point was an important one — If he trained me to do well, what would stop me from leaving and taking all the knowledge and jump to the family business? And worse — compete with him?
I ultimately started working at GAMCO in 2004, on the journey that I probably always knew I’d be on. But I wanted to make it my own journey and not just be “Mario’s son.” From 2005–2009, I started working on the Gabelli Merger Arbitrage fund conducting research on announced deals, and then moved on to work on our flagship value portfolios.
In 2007 I went back to Columbia GSB while still working to earn my MBA in the full time Executive program, and post-graduation I was looking for a new challenge at GAMCO — something that I could put my own stamp of success on. I was intrigued by our alternatives business. It was a small business within our organization where the leadership, business, and product development was stagnant, so I sought out a larger role in the day-to-day business operations. In a short time, I was leading a team there to design and recreate business and marketing plans, improve distribution and branding, as well as strengthen the sales platform and customer approach for the business line.
While filling an operational void, I also spearheaded efforts to fundraise for the business and set lofty goals for myself and my team. It wasn’t a quick fix — it was a time-consuming process, we were often short staffed, and often faced serious headwinds due to 2008–2009 financial crises, where we saw 20% of assets leave our funds.
Our team consisted of just three people, including myself, to help build the alternatives business back up again and beyond. We rolled up our sleeves and worked constantly — in the office, on the road in front of investors, and on the weekends. After a good amount of blood, sweat and tears, by the end of 2010 assets began to grow. We spent months and months talking to investors and getting their buy in, spreading and re positioning the Gabelli brand in alternative investments.
In 2011, we opened our Tokyo office. I spent a ton of time in Japan to build the team and the business, networking with local businesspeople and strategic partners. By 2012 I was overseeing the business helping to solidify strategic relationships with our current partners. Our growth there has continued upward and has been quite impressive thanks to the efforts of our team.
During that same time I also oversaw the distribution, marketing and client service for our Luxembourg SICAV business. Toward the end of 2011 my team and I were responsible for the launch of our Merger Arbitrage UCITS Fund. This business has increasingly grown year after year as I have found strategic partners and positioned the business efficiently throughout the market, leading with Europe. I now help manage the entire SICAV umbrella and have successfully launched additional funds with a global footprint.
Since taking over Alternatives at GAMCO in 2010, our merger arbitrage business has successfully grown 400% in AUM from approximately $400MM — $1.6 billion in 8 years. Although we’ve seen tremendous results from the hard work we put in years ago, we still run this business as a lean ship, with very few additions to headcount. I’m proud of the work we’ve done at Gabelli and Partners and I’m excited to see what else we can do to serve our investors and clients globally.
Can you share the funniest or most interesting story that happened to you since you began leading your company?
As I worked to expand Gabelli and Partners into other countries, it was fascinating to experience various cultures around the world. Transacting business is truly unique in every country — from the negotiating tactics, to the food served at meetings, to how you greet clients and guests, to the relative sizes of and designs of business cards. Those first few years were the greatest learning experience of my life — and lessons that cannot be learned in any classroom.
What do you think makes your company stand out? Can you share a story?
The Gabelli brand — fostered by our outstanding employees and of course, my father’s own reputation — is, without question, what stands out for us in the marketplace. Transitioning from a research firm into an asset management business is a great testament to the disciplined culture that seeks value in every investment we make.
Are you working on any new or exciting projects now?
We are always looking at new funds for attractive investments. We have some products that have seen great success in the US and always consider replicating them in other markets. For example, we will offer our arbitrage products in Europe, LatAm, Asia and beyond. Global expansion and development of our brand and finding new ways to partner in global markets is of primary importance not only to Gabelli and Partners, but to the larger organization as well.
What advice would you give to other CEOs or founders to help their employees to thrive?
In my mind, you should never forget where you came from, always pay it forward, and listen before reacting. Borrowing from my love of sports — don’t forget to coach and teach and utilize the talents of those on your team, from the superstars to the role players. Be strong, be fair, be understanding. Create a contributory culture and environment within your business where people feel like they can do more, contribute more, and affect outcomes. And of course — where they can make more for our clients, shareholders, and for themselves.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
This would be my Mom. While my Father and siblings were certainly a significant presence in my life and taught me so much on a personal and professional level, my Mom was the glue that kept our family together. As a teacher, she was very smart, methodical, organized, and disciplined, keeping us on the straight and narrow when it came to school, religion, our activities and life. But she didn’t just run the house — she taught us how to care and be both empathetic and sympathetic to others. She taught us how to love and learn and fail and succeed in both our personal lives as well as professional.
How have you used your success to bring goodness to the world?
As a family, we are very philanthropic and are always looking for ways to contribute to those who could use a helping hand. Our family foundation, the Gabelli Family Foundation, has been very philanthropic over the years, with a focus on education. I have been an active Board Member of the Foundation for the last 20 years. In addition, my wife Kristina and I have a donor advised fund where we have made charitable contributions to many deserving organizations. We plan on continuing to participate and doing more where we can.
On a personal level I have been coaching youth sports for the last 15 years. I coached football part time for 2 seasons at my alma mater Fordham Preparatory school in the Bronx and more recently have volunteered in my town coaching baseball and football for the past seven years.
Michael Gabelli what are your “5 Things I Wish Someone Told Me Before I Became CEO” and why. (Please share a story or example for each.)
1. Always listen to opinions that differ from yours — contrarian opinions are extremely valuable as you assess the pluses and minuses of any situation. You learn a lot about people through their opinions, the essence of their psychology.
2. Never stop negotiating — Unless you have an agreement or signed deal, never stop battling for what you want. Don’t walk away at the first sign of turbulence — always be at the table to make a deal.
3. Take a behavioral finance class — trust me, it will make you a better leader.
4. Never settle for less than 100% from yourself — dig down deeper, there is always bigger and better within you.
5. Don’t be afraid to take calculated risk — if you’ve done the research, weighed your options, considered the downside and the upside, always bet or rely on your team. Trust your gut.
Can you please give us your favorite “Life Lesson Quote”?
“The measure of who we are is what we do with what we have.” — Vince Lombardi
Some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch with, and why? He or she might just see this :-)
I would love to meet Berkshire Hathaway’s Charlie Munger. As Warren Buffet’s #2 they have seen a lot of success (and made a lot of people quite wealthy) and he doesn’t get a ton of credit. I would ask him how he feels about being the “behind the scenes guy.” Would be fascinating for me.