Gabelli Funds Internship

This summer Hector Tyser, EBC E-board, interned with GAMCO Investors Inc. The firm was founded in 1976 as an institutional research firm, which has evolved into a diversified global financial services company offering an extensive range of investment capabilities in many different asset classes. As outlined on GAMCO’s website there is a focus on fundamental bottom-up research, as well as the maintenance of a consistent investment process which ultimately feeds into the firm’s goal of achieving superior risk- adjusted returns for clients across the world (gabelli.com). Gabelli’s research headquarters are based in Rye, NY where Hector spent the majority of his internship. Hector decided to live in the city however thinking that it would be good experience for somebody with a European background to experience the fast pace of city life. Hector found that many people working at Gabelli lived in the city and commuted on the train daily. The morning meetings chaired by Mr. Gabelli, in which market conditions as well as changes in the nature of stocks being covered by industry analysts would be discussed, began at 8AM.

On the first day of Hector’s internship all of the interns were introduced to the other teammates at Gabelli by the director of HR in the main research conference room, and then paired up with their respective managers. Hector was paired up with Jeff Jonas (Boston College ’03) who specializes in healthcare, particularly medical devices, healthcare services, and insurance. During the first few weeks of Hector’s internship he spent time across different areas of the business which he found very useful in getting to know the nature and culture of the firm as well as how the different areas worked in relation to each other. For instance, early in the program Mr. Gabelli had all of the interns work on a group project with the marketing department in which the interns worked on returning uncashed dividend cheques to the individuals or families of investors in Gabelli. This was a task — based on the premise that funds could be escheated by the state if there is no contact between the firm and the owner of the shares producing the dividends for an extended period — of significant moral responsibility for Mr. Gabelli and the firm who explained that money invested with GAMCO should be valued and protected in the interest of the owner regardless of the size of the initial investment, at all costs. Following this project Hector spent some time attending investor conferences in NYC such as the 121 Mining Conference, which he attended with Chris Mancini (Boston College ’98) and an investor interview with the CEO of TIM Brazil — the largest telecommunication company in Brazil.

Following Hectors’s orientation at the firm he began to build out some models with in his division with the objective of establishing an EBITDA or Revenue multiple for which to value a company and find the private market value of a stock projected into the future — the quantitative objective of value investing. Initially Hector helped Jeff Jonas by updating some of the models that he already had for the companies he was following, by looking at income statements and balance sheets produced during quarterly reporting. Towards the end of his time in NY though Hector began work on his final project, a stock idea that would be pitched to Mr. Gabelli during the weekly analyst meeting on Mondays, at the end of his time at the company. Hector chose a European stock traded in Milan called Intercos, previously reported on by the EBC (Ticker: MI-ICOS). Intercos, is a family owned business with a market capitalization of 1.4billion, based in Makeup valley north of Milan. Through Hector’s modeling work with Jeff Jonas he calculated a PMV per share in 2027 (he recommended a 3-4 year investment horizon) of 34 euros — the current share price is hovering around 15 euros. Hector found the pitch intimidating to start with because having seen lots of analysts pitches over the previous month in which Mr. Gabelli was quickly able to sniff out any misunderstanding or holes in the research. However, the pitch went well despite some difficult questioning at the end regarding the ownership structure of the company.

The weekend following Hector’s pitch he transferred back to the London office and began work in Gabelli’s office in St James’ Place. In London Hector worked mainly with Sara Wojda, who also happened to specialize in healthcare, and Adil — Mr. Gabelli’s aerospace expert. During the time that Hector spent in London he continued to work on modeling mainly for Adil, by updating the spreadsheets of the top 10 aerospace companies he followed during quarterly reporting as well as attending investor days such as Sanofi’s event on Liverpool Street. Overall, the combined experience of being in both offices was incredible and by the end Hector  felt that he had a been able to develop a new found positive perspective on asset management as a career.