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ASSOCIATED CAPITAL GROUP, INC. Reports Excellent Second Quarter Results

听- Our merger arbitrage strategy returned +5.5% before expenses (+4.2% net) in the second quarter and +9.4% before expenses (+7.1% net) for the first half of the year, marking our strongest first-half performance in over 25 years

- Expect vibrant M&A activity over the balance of the year

-听Assets Under Management (鈥淎UM鈥�): $1.34听产颈濒濒颈辞苍 at June 30, 2025听compared to $1.27听产颈濒濒颈辞苍 at March听31, 2025

-听Book Value per share ended the quarter at $43.30 per share vs $42.51 at听March 31, 2025

-听Board authorized the repurchase of up to an additional 150,000 shares

GREENWICH, Conn., Aug. 06, 2025 (GLOBE NEWSWIRE) -- Associated Capital Group, Inc. (鈥淎C鈥� or the 鈥淐ompany鈥�), a diversified financial services company, today reported its financial results for the听second quarter of 2025.

Financial Highlights
($ in 000's except AUM and听per share data)

Second Quarter Financial Data

- Assets under management ended the quarter at $1.34听产颈濒濒颈辞苍 versus $1.27听产颈濒濒颈辞苍 at March 31, 2025.

- Book value was $43.30听per share听compared to $42.51听per share at March 31,听2025.听

Second听Quarter Results

Total revenues in the second quarter were $2.2听million compared to $2.6听million in the second quarter of 2024. Revenues generated by the GAMCO International SICAV 鈥� GAMCO Merger Arbitrage (the 鈥淪ICAV鈥�) were $1.0听million versus $1.3听million in the prior year period due to lower average AUM in 2025. All other revenues were $1.2 million compared to $1.3听million in the year ago quarter. As in the past, we do not accrue incentive fees until they are earned, typically on an annual basis on December 31.

Total operating expenses, excluding management fee, were $7.4 million in the second quarter of 2025 and $5.8听million in the second听quarter of 2024. The increase is听primarily attributed to听$1.8 million of variable compensation in 2025 due to payouts on the performance of certain proprietary funds.

Net investment and other non-operating income听was $32.9听million for the second听quarter听of 2025 compared to $7.3听million in the second听quarter of 2024. The primary driver听of this听quarter's results was our merger arbitrage investments, as well as our dividend and interest income.听

For the quarter ended听June 30, 2025, the management fee was $2.8听million versus $0.4 million for the year ago quarter.

The effective tax rate applied to our pre-tax income for the quarter ended June 30, 2025 was 25%.听In the year ago quarter, the effective tax rate was 19.1%,听reflecting a deferred tax benefit听from a foreign investment.

Assets Under Management (AUM)

Assets under management at June 30, 2025听were $1.34 billion, $73听million higher than March 31, 2025, primarily due to 3 factors including market appreciation of $49 million, the impact of currency fluctuations in听non-US dollar denominated classes of investment funds of $23 million and net inflows of $1听million.听

(a) Includes $455, $401, $408 and $468 of sub-advisory AUM related to GAMCO International SICAV - GAMCO Merger Arbitrage and $71, $70, $68 and $66听of sub-advisory AUM related to Gabelli Merchant Partners Plc (f/k/a Gabelli Merger Plus+ Trust Plc), respectively.
(b) Assets under management represent the assets invested in this strategy that are attributable to Associated Capital Group, Inc.

Alternative Investment Management

Our alternative investment offerings center around our merger arbitrage strategy, which seeks absolute return independent of the broad equity and fixed income markets through a proven strategy of investing in global announced corporate mergers and acquisitions. We also manage strategies focused on fundamental, active, event-driven and special situations investing.

Merger Arbitrage

For the second quarter of听2025, the听longest continuously offered fund in the merger arbitrage strategy generated gross returns of +5.45% (+4.19% net). A summary of the听performance is as follows:

(a) Net听performance is net of fees and expenses, unless otherwise noted. Performance shown for an actual fund in this strategy. The performance of other funds in this strategy may vary. Past performance is no guarantee of future results.
(b) Represents annualized returns through June 30, 2025
(c) Inception Date: February 1985

Global M&A activity resumed its positive momentum in the second quarter after a brief air pocket for new deal activity in April when the Trump Administration surprised the market with tariffs that were substantially higher than the market had been expecting. Following a pause on the implementation of tariffs, and the negotiation of country-specific trade deals, the market regained a sense of confidence and clarity, particularly after Treasury Secretary Scott Bessent鈥檚 d茅tente with China in Switzerland. As a result, dealmaking resumed its upward trajectory and powered second quarter M&A to over $1 trillion, an increase of 3% sequentially compared to the first quarter, which brought YTD activity to about $2 trillion, an increase of 33% compared to the same time period in 2024.

M&A Outlook

A more accommodative antitrust environment and pent-up demand from acquirers should be supportive of ongoing M&A activity. Furthermore, recent regulatory shifts both in the U.S. and abroad, as summarized in the table below, should provide a more favorable environment for merger arbitrage investing.听

Regulatory Tailwinds

(a) 鈥淣et鈥� reflects our assessment of each regulatory change鈥檚 impact on merger arbitrage: (+) favorable, (鈥�) unfavorable, and (?) uncertain or neutral.

Strategy Availability

The Merger Arbitrage strategy is available across multiple vehicles tailored to client type and mandate, including partnerships and offshore corporations serving both accredited as well as institutional investors. The strategy is also offered in separately managed accounts, a Luxembourg UCITS (Undertaking for Collective Investment in Transferrable Securities) and a London Stock Exchange-listed investment company, Gabelli Merchant Partners Plc (GMP-LN), formerly known as Gabelli Merger Plus+ Trust Plc.

Acquisitions

Associated Capital Group's plan is to accelerate the use of its capital. We intend to leverage our research and investment capabilities by pursuing acquisitions and alliances that will broaden our product offerings and add new sources of distribution. In addition, we may make direct investments in operating businesses using a variety of techniques and structures to accomplish our objectives.

Gabelli Private Equity Partners was created to launch a private equity business, somewhat akin to the success our predecessor PE firm had in the 1980s. We will continue our outreach initiatives with business owners, corporate management, and various financial sponsors. We are activating our program of buying privately owned, family started businesses, controlled and operated by the founding family.

Charitable Contributions

AC seeks to be a good corporate citizen by supporting our community through sponsoring local organizations. Since our inception as a public company in 2015, the shareholders of AC have donated approximately $42 million to over 200 501(c)(3) organizations that address a broad range of local, national and international concerns.

Shareholder Compensation

On May 7, 2025, the Board of Directors declared a semi-annual dividend of $0.10 per share听which was听paid听on听June 26, 2025听to shareholders of record on June 12, 2025.

During the second quarter of 2025, AC repurchased听21,241 Class A shares, for $0.8 million, at an average price of $36.53 per share. For the six months ended听June 30, 2025, AC repurchased 60,259听Class A shares, for $2.2听million, at an average price of $36.39 per share.

Shares may be purchased from time to time in the future, however share repurchase amounts and prices may vary after considering a variety of factors, including the Company's financial position, earnings, other alternative uses of cash, macroeconomic issues, and market conditions.

Since our inception in听2015, AC has returned $186.4听million to shareholders through share repurchases, exchange offers and听dividends of $85.3听million.

At June 30, 2025, there were 21.124听million shares outstanding, consisting of听2.203 million Class A shares and听18.921 million Class B shares outstanding.

About Associated Capital Group, Inc.

Associated Capital Group, Inc. (NYSE:AC), based in Greenwich, Connecticut, is a diversified global financial services company that provides alternative investment management through Gabelli & Company Investment Advisers, Inc. (鈥淕CIA鈥�). We have also earmarked听proprietary capital for our direct investment business that invests in new and existing businesses. The direct investment business is developing along several core pillars including听Gabelli Private Equity Partners, LLC (鈥淕PEP鈥�), formed in August 2017 with $150 million of authorized capital as a 鈥渇und-less鈥� sponsor. We also created听Gabelli Principal Strategies Group, LLC (鈥淕PS鈥�) in December 2015听to pursue strategic operating initiatives.

Operating Loss Before Management Fee

Operating loss before management fee expense represents a non-GAAP financial measure.听We believe this measure is useful in illustrating the operating results of the Company as management fee expense is based on pre-tax income before management fee expense, which includes non-operating items including investment gains and losses from the Company鈥檚 proprietary investment portfolio and interest expense.

(1) Management fee expense is incentive-based and is equal to 10% of Income before management fee and income taxes and excludes the impact of consolidating entities. For the six months ended June 30, 2025听and 2024, Income before management fee, income taxes and excluding consolidated entities was $38,602 and听$24,244, respectively. As a result, $3,860 and $2,424听was accrued for the 10% management fee expense for the six months ended June 30, 2025听and 2024, respectively.

Table I

Table II

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

The financial results set forth in this press release are preliminary. Our disclosure and analysis in this press release, which do not present historical information, contain 鈥渇orward-looking statements鈥� within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements convey our current expectations or forecasts of future events. You can identify these statements because they do not relate strictly to historical or current facts. They use words such as 鈥渁nticipate,鈥� 鈥渆stimate,鈥� 鈥渆xpect,鈥� 鈥減roject,鈥� 鈥渋ntend,鈥� 鈥減lan,鈥� 鈥渂elieve,鈥� and other words and terms of similar meaning. They also appear in any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance of our products, expenses, the outcome of any legal proceedings, and financial results. Although we believe that we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know about our business and operations, the economy and other conditions, there can be no assurance that our actual results will not differ materially from what we expect or believe. Therefore, you should proceed with caution in relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance.

Forward-looking statements involve a number of known and unknown risks, uncertainties and other important factors, some of which are listed below, that are difficult to predict and could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements. Some of the factors that could cause our actual results to differ from our expectations or beliefs include a decline in the securities markets that adversely affect our assets under management, negative performance of our products, the failure to perform as required under our investment management agreements, and a general downturn in the economy that negatively impacts our operations. We also direct your attention to the more specific discussions of these and other risks, uncertainties and other important factors contained in our Form 10 and other public filings. Other factors that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We do not undertake to update publicly any forward-looking statements if we subsequently learn that we are unlikely to achieve our expectations whether as a result of new information, future developments or otherwise, except as may be required by law.

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