Hurdles Loom for Gabelli Asset Management

Fund manager Mario Gabelli rose to superstar status by seeing value where others didn't. But recent events have raised a few questions for his followers.

Last week Merrill Lynch analyst Cynthia Mayer lowered her rating on shares of Gabelli Asset Management(GBL Quote) to neutral from buy, in part because of concerns about high fund fees and potential regulation of companies that manage both hedge funds and mutual funds.

Back in September, Gabelli publicly released a memo describing how its funds steer clear of late traders and market-timers. Nevertheless, the sins of the market-timing masses are splattering onto the well-behaved few. Mayer noted that "regulatory exposure is low, but at some point Gabelli's above-average equity fund fees could be pressured." ...