Global Deal Is a Play on M&A

O'Boyle says that while he expects Gabelli to generally stick close to his management style with Global Deal, the new fund has a few distinctions. "While Gabelli ABC is not necessarily limited to the U.S. market, this will have more of a global flavor to it," he says.

Global Deal plans to invest at least 40% of its assets in mergers, takeovers, leveraged buyouts and tender offers that occur outside the U.S.

O'Boyle adds that Global Deal "goes further out than ABC" by targeting corporate reorganization events in addition to M&A.

(Gabelli also runs the $662 million (EMAAX Quote)AXA Enterprise Mergers and Acquisitions (EMAAX), which O'Boyle calls "kind of a clone" of the ABC fund.)

There may be some benefit to betting on the outcome of announced deals through a closed-end fund. Unlike open-end funds, which continuously issue and redeem shares, closed-end funds issue a fixed number of shares that trade throughout the day, like stocks. That means managers don't have to keep extra cash on hand to meet redemptions, so they can remain fully invested, maximizing their funds' returns.

But the share prices of closed-end funds can move independently of the net asset value of their holdings. So investors who buy the fund are taking on the additional risk that they won't be able to realize the full value of their investment when they want to sell. That's particularly true when you buy pay a premium for shares, as investors did in Global Deal's IPO.