DIRECT DIAL
212-735-2790
DIRECT FAX
917-777-2790
EMAIL ADDRESS
RPRINS@SKADDEN.COM
May 31, 2005
Ms. Laura Hatch
Division of Investment Management
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Ms. Hatch:
This letter summarizes the responses of the Gabelli Equity
Series Fund (the "Fund") to your comments received orally on May 17, 2005 and
May 26, 2005 to the N-14 registration statement of the Fund under the
Securities Act of 1933. These responses are reflected in the pre-effective
amended filing being made today. Unless otherwise indicated, all defined terms
shall have the meanings given within the N-14 registration statement.
1. As requested, we provide the following NAST analysis:
The Combined Fund's investment adviser, investment
objectives and policies, and portfolio composition will be the same as those
of the Gabelli Woodland Fund. The Combined Fund's expense structure and
expense ratio will be as detailed below:
FMI Combined
Gabelli Woodland Fund (pro
Fund Fund forma)
------- -------- ------------------
Redemption Fees (for shares held less than 7 days) payable to the Fund(1)........... 2.00% -- 2.00%
Annual Fund Operating Expenses (expenses that are deducted from Fund assets):
Management Fees..................................................................... 1.00% 1.00% 1.00%
Distribution (Rule 12b-1) Expenses(2)............................................... 0.25% 0% .25%
Other Expenses...................................................................... 2.76% 0.75% .75%(4)
Total Annual Fund Operating Expenses................................................ 4.01%(3) 1.75% 2.00%(3)
Fee Waiver and Expense Reimbursement................................................ (2.01)%(3) (0.45)%(3) --
Net Annual Operating Expenses....................................................... 2.00%(3) 1.30% 2.00%(3)
________________
(1) The redemption fee applies to Gabelli Woodland Fund shares purchased on
or after November 1, 2004.
(2) Due to the payment of Rule 12b-1 fees, long-term shareholders may
indirectly pay more than the equivalent of the maximum permitted
front-end sales charge.
(3) The Gabelli Adviser has contractually agreed to waive its investment
advisory fee and/or to reimburse expenses of the Fund to the extent
necessary to maintain the Fund's Total Annual Fund Operating Expenses
(excluding brokerage, interest, taxes and extraordinary expenses) at
2.00% on an annualized basis for Class AAA shares. This arrangement will
continue until at least through September 30, 2005. In addition, the Fund
has agreed, during the two-year period following any waiver or
reimbursement by the Gabelli Adviser, to repay such amount to the extent,
after giving effect to the repayment, such adjusted Total Annual Fund
Operating Expenses would not exceed 2.00% on an annualized basis for
Class AAA shares. During the fiscal year ended June 30, 2004, Fiduciary
Management, Inc. reimbursed the FMI Woodland Fund to the extent necessary
to ensure that Total Annual Fund Operating Expenses did not exceed 1.30%.
(4) Amount reduced to current Gabelli Woodland Fund rate due to incremental
assets reducing the percentage of fixed costs to new average assets.
On a pro forma basis, as of March 31, 2005, the Combined Fund's net assets are
$14.1 million, compared to $9.5 million for the FMI Woodland Fund and $4.6
million for the Gabelli Woodland Fund.
Consequently, the Combined Fund will adopt the performance history of the
Gabelli Woodland Fund. The Gabelli Woodland Fund will be the accounting
survivor following the Reorganization.
2. In response to your general comment requesting clear
identification of the accounting survivor of the Reorganization, including
which of the two Funds' objective, policies, service arrangements, etc., will
be adopted by the Combined Fund, we have added disclosure to the Summary
section of the registration statement indicating that the Gabelli Woodland
Fund, as accounting survivor of the Reorganization, will retain its objective,
policies, service arrangements, and performance history following the
Reorganization.
3. We confirm that the FMI Woodland Fund voting requirements
would result in approval of the transaction if a 51% quorum is present with 2%
in favor, 1% opposed and 48% broker non-votes. A 1940 Act majority is not
required. We have added a sentence of disclosure indicating that FMI's voting
procedures do create the possibility that, in the event of substantial numbers
of broker non-votes, relatively few of the shares would be able to dictate the
result of the vote. We note, however, that such a high broker non-vote would be
extraordinarily unusual.
4. In response to your comment that the Combined Fund column
header for the Fee Table, Capitalization Table and Pro Forma Financial
Statements should state the accounting survivor of the Reorganization, we have
added disclosure that Gabelli Woodland Fund will be the accounting survivor.
5. As requested, we have added a sentence of disclosure to
the sections discussing the reasons for the Reorganization to confirm that
both the Gabelli and the FMI boards considered gross as well as net expenses
when considering the Reorganization.
6. We have added a sentence of disclosure comparing the two
funds' portfolio turnover and market capitalization size.
7. As requested, we have (i) removed the 2002 column from
the Gabelli column of the fees table and (ii) added a parenthesis to the
appropriate data in the FMI column of the fees table.
8. In response to your comments to the fees table section,
we have (i) added expenses information to the pro forma fees table and (ii)
reformatted the fees tables to present the information within a single table,
in comparative side-by-side format. We have also recalculated the Gabelli
Woodland Fund and FMI Woodland Fund expenses to be as of March 31, 2005 and
have revised the fees table data and respective expense examples accordingly.
Finally, we have calculated these expenses, and have revised the Statement of
Operations, to reflect that no fees will be waived.
9. We have inserted a pro forma expense example for the
Combined Fund.
10. We have updated the FMI Woodland Fund performance data
to be current through December 31, 2004.
11. Within the "Primary Differences" section, we have added
disclosure explaining the potential consequences to shareholders of the FMI
Woodland Fund of differences between the funds, including additional risks to
which they will be subject as a result of the Reorganization.
12. Within the "Principal Investment Risks" section, we have
provided additional disclosure responding to your request that we highlight
new potential risks to FMI Woodland Fund shareholders if the Reorganization is
completed.
12. We have added disclosure comparing the Gabelli Woodland
Fund and FMI Woodland Fund fair valuation procedures. We have also clarified
that the differences in valuation policies would not have had an impact on the
NAV calculated as of March 31, 2005 and referring to the possibility that the
actual valuation at the time of transfer of assets could have an impact on NAV.
13. As requested, we have added a sentence of disclosure
clarifying that the distribution and service fees for the Gabelli Woodland
Fund AAA shares are 25 basis points.
14. In response to your comments to the Pro Forma Schedule
of Investments, we have added a statement that none of the investments held by
the FMI Woodland Fund or the Gabelli Woodland Fund are anticipated to be sold
by reason of the Reorganization.
15. You had requested that we correct the "composition of
net assets", "capital stock," and "additional paid-in capital" line items in
the Statement of Assets and Liabilities, if necessary, along with any other
line items requiring revisions. We have corrected three line items and have
revised the financial statement to reflect additional data.
16. Responding to your question relating to the Pro Forma
Combined column of the "fees waived" line item of the Statement of Operations,
we [confirm that there will be no waiver and the correct sum for this item is
zero.]
17. To the "Notes to Pro Forma Financials" section, we have
added (i) a "use of estimates" note and (ii) a capital shares footnote stating
the number of shares issued to FMI Woodland Fund shareholders and the number
of total combined shares following the Reorganization.
The Gabelli Woodland Fund has also requested that we
acknowledge on its behalf the following:
The disclosure in the filing is the responsibility of the
Fund. The Fund acknowledges that staff comments or changes in response to
staff comments in the proposed disclosure in the Registration Statement may
not be asserted as a defense in any proceeding which may be brought by any
person with respect to this matter. The Fund also represents to the Securities
and Exchange Commission (the "Commission") that should the Commission or the
staff acting pursuant to delegated authority, declare the filing effective, it
does not foreclose the Commission from taking any action with respect to the
filing and the Fund represents that it will not assert this action as a
defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
The Fund further acknowledges that the action of the
Commission or the staff, acting pursuant to delegated authority, in declaring
the filing effective does not relieve the Fund from its full responsibility
for the adequacy and accuracy of the disclosures in the filing.
Sincerely,
Richard T. Prins