[Letterhead of Paul, Hastings, Janofsky & Walker]
January 21, 2009 33428.00001
Ms. Laura E. Hatch
United States Securities and Exchange Commission
Division of Investment Management
100 F Street, N.E.
Washington, DC 20549
Re: GAMCO Westwood Funds (the "Trust")
Registration Statement on Form N-14 (333-156354)
Dear Ms. Hatch:
This letter responds to your comments communicated to us by telephone on January
12, 2009, with respect to the Registration Statement on Form N-14 (the
`Registration Statement") of the Trust which was filed with the Securities and
Exchange Commission on December 19, 2008 (accession number
0000935069-08-003048), on behalf of the GAMCO Westwood Mighty Mites Fund (the
"Mighty Mites Fund"), a series of the Trust, with respect to the reorganization
of the B.B. Micro-Cap Growth Fund (the "B.B. Fund"), a series of the B.B. Funds,
and the Mighty Mites Fund (together, the "Funds").
The Trust's responses to your comments are reflected below. We have restated the
substance of your comments for your ease of reference. Furthermore, we expect to
file Pre-Effective Amendment No. 1 to the Registration Statement on Form N-14 on
January 21, 2009, for the purpose of updating certain disclosures in light of
your comments as set forth herein.
COMMENT #1 - FINANCIAL HIGHLIGHTS: You have asked that we include Financial
Highlights (Form N-1A, Item 8) for each of the Mighty Mites Fund and the B.B.
Fund.
RESPONSE #1: We have included Financial Highlights for each of the
Mighty Mites Fund and the B.B. Fund.
COMMENT #2 - UNDERTAKINGS (ITEM 17): You have asked that we include an
undertaking in Item 17 of the Registration Statement to file the tax opinion to
be issued in connection with the proposed reorganization.
RESPONSE #2: We have included this undertaking in the Registration
Statement.
COMMENT #3 - OVERVIEW (PAGE 1): In the third sentence of the second paragraph,
you have asked that we change the word "identical" to "similar" in order to be
consistent with the other disclosure contained in the Registration Statement.
RESPONSE #3: We have changed the word "identical" to "similar" as
requested.
COMMENT #4 - COMPARISON OF PERFORMANCE (PAGE 3): You have asked that we update
the performance for both the Mighty Mites Fund and the B.B. Fund as of December
31, 2008.
RESPONSE #4: We have included the updated performance information for
each of the Mighty Mites Fund and B.B. Fund as of December 31, 2008.
COMMENT #5A - PRINCIPAL INVESTMENT STRATEGIES (PAGE 5): You have requested that
we add a sentence to highlight the main differences in the principal investment
strategies of the Mighty Mites Fund and the B.B. Fund, and to state that the
combined fund will follow the principal investment strategies of the Mighty
Mites Fund.
RESPONSE #5A: We have added language as follows:
"The main differences in the Funds' principal
investment strategies are that the B.B. Fund has a policy of
investing at least 80% of its total assets in stocks of
micro-cap companies and the Mighty Mites Fund has a policy to
invest "primarily" in micro-cap companies. Furthermore, the
Mighty Mites Fund may invest up to 25% in foreign stocks,
whereas the B.B. Fund does not invest in foreign investments
as a principal investment strategy. The combined fund will
follow the principal investment strategies of the Mighty Mites
Fund."
COMMENT #5B - PRINCIPAL INVESTMENT STRATEGIES (PAGE 5): You have also commented
that the principal investment strategies of each Fund seemed to imply that the
B.B. Fund is a "growth" fund and the Mighty Mites Fund is a "value" fund and
requested that we highlight this as a main difference between the Funds.
RESPONSE #5B: The Funds' investment adviser (the "Adviser") believes,
however, that each Fund has both growth and value characteristics and
therefore should not be deemed to be exclusively a "growth" fund or a
"value" fund. In looking down the spectrum from larger companies to
smaller companies, particularly micro-cap companies, the Adviser
believes that the distinction between growth and value becomes less
apparent. The Adviser believes that micro-cap companies, by their
nature, are emerging companies with significant growth characteristics.
The Adviser also believes, however, that many of these micro-cap
companies are undervalued and can significantly appreciate over time as
a result of such growth characteristics. As a result, the Adviser aims
to acquire these "growth" stocks at "value" prices, thereby employing a
strategy that involves both "growth" and "value" approaches. This
investment selection process is described in each Fund's prospectus,
respectively, under the section entitled
Investment Selection Process, and the descriptions are identical. In
light of the foregoing, we have not highlighted this as a main
difference between the Funds.
COMMENT #6: You have asked us to verify whether the B.B. Fund's investment
adviser will dispose of securities of the B.B. Fund before its assets are
transferred to the Mighty Mites Fund.
RESPONSE #6: The B.B. Fund's investment adviser, in the regular course
of its management of the B.B. Fund's portfolio, will dispose of certain
securities to the extent necessary so that the asset composition of the
B.B. Fund is consistent with the investment strategies policies and
restrictions of the Mighty Mites Fund. We have included the following
disclosure with respect to the foregoing:
"Teton reserves the right to sell portfolio
securities and/or purchase other securities for the B.B. Fund
before the Reorganization, to the extent necessary so that the
asset composition of the B.B. Fund is consistent with the
investment strategies, policies and restrictions of the Mighty
Mites Fund. To the extent the B.B. Fund sells securities at a
net gain, current shareholders may receive a capital gain
distribution. It is expected that in the regular course of its
management of the B.B. Fund's portfolio, Teton will engage in
such transactions before the consummation of the
Reorganization."
COMMENT #7- PRINCIPAL INVESTMENT RISKS (PAGE 7): You have requested that we
clarify whether the Mighty Mites Fund will be subject to IPO risk and
diversification risk.
RESPONSE #7: The Mighty Mites Fund will not be subject to IPO risk to
the same extent as the B.B. Fund would be as the Mighty Mites Fund does
not invest in IPOs as a principal investment strategy. The Mighty Mites
Fund is also not subject to diversification risk as the Mighty Mites
Fund's portfolio is more widely diversified than the portfolio of the
B.B. Fund. We have updated the risk disclosures to reflect the
foregoing.
COMMENT #8 - INVESTMENT RESTRICTIONS AND LIMITATIONS (PAGE 8): You have
requested that we add a sentence to highlight the main differences in investment
restrictions and limitations between the Mighty Mites Fund and the B.B. Fund,
and to state that the combined fund will follow the investment restrictions and
limitations of the Mighty Mites Fund.
RESPONSE #8: We have added language as follows:
"The main difference between the investment
restrictions of the B.B. Fund and the Mighty Mites Fund is
that the B.B. Fund has a 15% concentration policy, whereas the
Mighty Mites Fund has a 25% concentration policy. In addition,
the B.B. Fund has a stricter diversification policy than the
Mighty Mites Fund. The combined fund will follow the
investment restrictions and limitations of the Mighty Mites
Fund."
COMMENT #9 - FEDERAL INCOME TAX CONSEQUENCES (PAGE 14): You have requested that
we enhance the disclosure with respect to the aspects of a tax-free
reorganization between the Funds.
RESPONSE #9: We have enhanced the disclosure with respect to the
aspects of a tax-free reorganization between the Funds.
COMMENT #10 - FEDERAL INCOME TAX CONSEQUENCES (PAGE 14): You have requested that
we disclose whether the Mighty Mites Fund will be using capital loss carryovers
from the B.B. Fund.
RESPONSE #10: The B.B. Fund does not have any capital loss carryovers,
and we have stated this in the Registration Statement.
COMMENT #11 - PORTFOLIO MANAGEMENT (PAGE 17): You have requested that we include
information with respect to the length of time in which each portfolio manager
has been associated with the Mighty Mites Fund.
RESPONSE #11: Each portfolio manager has been associated with the
Mighty Mites Fund since its inception and we have included disclosure
to this effect.
COMMENT #12 - PURCHASE OF SHARES (PAGE 18): You have asked whether B.B. Fund
shareholders will be subject to the $10,000 requirement to open an account with
the Mighty Mites Fund.
RESPONSE #12: The B.B. Fund shareholders will not be subject to the
$10,000 requirement to open an account with the Mighty Mites Fund (as
such shareholders will be "grandfathered in"), however, such
shareholders will be subject to the other account minimums of the
Mighty Mites Fund. We have included disclosure to this effect.
COMMENT #13 - STATEMENT OF ASSETS AND LIABILITIES: You have requested that we
include a footnote to explain the adjustments that were made to these financial
statements.
RESPONSE #13: We have included this footnote.
COMMENT #14 - STATEMENT OF OPERATIONS: You have requested that we include a
footnote to explain the adjustments that were made to these financial
statements.
RESPONSE #14: We have included these footnotes.
COMMENT #15 - SCHEDULE OF INVESTMENT: You have requested that we enhance
footnote (d) to explain these adjustments.
RESPONSE #15: We have enhanced the disclosure for this footnote.
COMMENT #16 - NOTES TO THE PRO FORMA FINANCIAL STATEMENTS: You have requested
that we include a note stating that the Mighty Mites Fund complies with
Subchapter M of the Internal Revenue Code of 1986, as amended.
RESPONSE #16: We have included this note.
In addition, we have added disclosure with respect to certain legal proceedings
involving an affiliate of the Adviser which now appears in the prospectuses of
the Funds in the Gabelli fund complex.
Should you have any questions regarding the foregoing, please do not hesitate to
contact me at the number listed above. Thank you.
Very truly yours,
/s/ Rachael L. Schwartz
Rachael L. Schwartz
for PAUL, HASTINGS, JANOFSKY & WALKER LLP