Financial Performance - Total revenues for Q2 2024 were $2.6 million, an increase from $2.4 million in Q2 2023, with GAMCO International SICAV revenues rising to $1.3 million from $1.0 million[103]. - Net income attributable to shareholders for Q2 2024 was $2.985 million, down from $3.371 million in Q2 2023, representing a decrease of about 11.4%[102]. - Total revenues for the six months ended June 30, 2024, were $5.6 million, an increase of 16.7% compared to $4.8 million in the same period of 2023[107]. - Interest and dividend income increased to $7.9 million in the 2024 quarter from $6.0 million in the 2023 quarter, driven by higher sustained interest rates[106]. - Net cash provided by operating activities was $28.6 million for the six months ended June 30, 2024, compared to $179.4 million in the same period of 2023[119][120]. Expenses - Total expenses increased to $6.269 million in Q2 2024 from $5.853 million in Q2 2023, marking an increase of approximately 7.1%[102]. - Compensation expenses rose to $3.942 million in Q2 2024 from $3.789 million in Q2 2023, primarily due to higher stock-based compensation[105]. - Management fee expense for Q2 2024 was $0.442 million, down from $0.544 million in Q2 2023, indicating a decrease of about 18.7%[102]. - Other operating expenses increased to $4.1 million during the six months ended June 30, 2024, compared to $3.0 million in the prior year, driven by marketing expenses on the newly realigned SICAV[109]. - Compensation expenses rose to $7.8 million for the six months ended June 30, 2024, compared to $7.4 million in the prior year, primarily due to higher stock-based compensation[109]. Assets and Equity - Average assets under management (AUM) decreased to $1,446 million in Q2 2024 from $1,640 million in Q2 2023, reflecting a decline of approximately 11.8%[95]. - The company ended Q2 2024 with approximately $880.6 million in cash and investments, providing flexibility for strategic objectives[99]. - Total shareholders' equity increased to $915.5 million as of June 30, 2024, up from $907.0 million at the end of 2023, reflecting a growth of approximately 0.6%[100]. - Assets under management decreased to $1.4 billion as of June 30, 2024, down from $1.6 billion at December 31, 2023, primarily due to investor outflows[112]. - Total AUM for Merger Arbitrage decreased by 14.1% from $1.312 billion at December 31, 2023, to $1.127 billion at June 30, 2024[113]. Legal Matters - The company is not currently subject to any legal proceedings that involve claims exceeding 10% of its consolidated assets[127]. - Management believes that potential legal matters are not material to the company's financial condition, operations, or cash flows as of June 30, 2024[127]. - The condensed consolidated financial statements include necessary provisions for probable and estimable losses related to legal actions[127]. - The company evaluates reasonably possible losses and makes necessary disclosures if material[127]. - The company may be named in legal actions seeking substantial or indeterminate compensatory damages[127]. - The company is subject to governmental or regulatory examinations that could result in adverse judgments or settlements[127]. - Legal actions may seek punitive damages or injunctive relief[127]. - The company has provisions for losses that it believes are probable[127]. - Management assesses the materiality of potential losses from legal proceedings[127]. - The company is not currently facing any material legal challenges that could impact its financial performance[127]. Operating Loss - The company reported an operating loss of $3.674 million for Q2 2024, compared to an operating loss of $3.471 million in Q2 2023[102]. Tax Rate - The effective tax rate for the three months ended June 30, 2024, was 19.1%, significantly lower than 35.8% in the same period of 2023, due to deferred tax benefits from a foreign investment[107]. Investment Performance - Investment losses were $0.2 million in the 2024 quarter, a decline from gains of $3.3 million in the comparable 2023 quarter[106]. Book Value - Book value per share increased to $42.87 as of June 30, 2024, compared to $41.41 as of June 30, 2023, reflecting a growth of approximately 3.5%[95].

[Second Quarter 2024 Financial Overview](index=1&type=section&id=Second%20Quarter%202024%20Financial%20Overview) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Associated Capital Group reported second-quarter 2024 results with Assets Under Management (AUM) at $1.36 billion, down from $1.55 billion at the end of Q1 2024 | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | AUM (end of period) | $1.36 billion | $1.55 billion | $1.55 billion | | Book Value per share | $42.87 | $42.80 | $41.41 | | Net Income | $3.0 million | - | $3.4 million | | Diluted EPS | $0.14 | - | $0.15 | - The company returned a total of **$4.4 million** to shareholders during the second quarter through a combination of dividends and share repurchases[2](index=2&type=chunk) - The Board of Directors approved a Shareholder Designated Charitable Contribution (SDCC) of **$0.20 per share**[2](index=2&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) [Second Quarter Results Analysis](index=2&type=section&id=Second%20Quarter%20Results%20Analysis) Total revenues for Q2 2024 increased to $2.6 million from $2.4 million year-over-year, primarily due to a change in revenue recognition for the GAMCO International SICAV - A change in the financial arrangement for the GAMCO International SICAV, effective December 2023, led to the company recognizing 100% of its revenues and paying its marketing expenses, with no material impact on operating results[5](index=5&type=chunk) | Financial Item | Q2 2024 | Q2 2023 | Change Driver | | :--- | :--- | :--- | :--- | | Total Revenues | $2.6M | $2.4M | Increased SICAV revenue | | Operating Expenses (ex-mgmt fee) | $5.8M | $5.3M | Higher marketing & stock comp | | Net Investment & Other Income | $7.3M | $8.6M | Lower mark-to-market gains | | Effective Tax Rate | 19.1% | 35.8% | Prior year had deferred tax expense | [Assets Under Management (AUM)](index=2&type=section&id=Assets%20Under%20Management%20(AUM)) Assets Under Management (AUM) stood at $1.36 billion as of June 30, 2024, a decrease of $229 million from year-end 2023 - The **$229 million decrease in AUM** since year-end 2023 was driven by three main factors: net outflows (**$195 million**), market depreciation (**$19 million**), and currency fluctuations (**$15 million**)[8](index=8&type=chunk) | AUM by Strategy ($ in millions) | June 30, 2024 | Dec 31, 2023 | June 30, 2023 | | :--- | :--- | :--- | :--- | | Merger Arbitrage | $1,127 | $1,312 | $1,286 | | Long/Short Value | $199 | $244 | $230 | | Other | $36 | $35 | $33 | | **Total AUM** | **$1,362** | **$1,591** | **$1,549** | [Business Operations and Strategy](index=3&type=section&id=Business%20Operations%20and%20Strategy) [Alternative Investment Management](index=3&type=section&id=Alternative%20Investment%20Management) The company's alternative investment strategies are centered on its merger arbitrage approach, which seeks to generate absolute returns that are independent of the broader equity and fixed income markets - The core of the alternative investment strategy is merger arbitrage, which has an absolute return focus aimed at generating returns independent of broad market movements[11](index=11&type=chunk) [Merger Arbitrage Strategy & Performance](index=3&type=section&id=Merger%20Arbitrage%20Strategy%20%26%20Performance) In Q2 2024, the longest continuously offered fund in the merger arbitrage strategy delivered a gross return of -1.37% (-1.40% net) | Performance % (Gross) | 2Q '24 | YTD '24 (July) | Full Year 2023 | | :--- | :--- | :--- | :--- | | Merger Arbitrage | -1.37% | 3.48% | 5.49% | - Global M&A activity totaled **$1.5 trillion** in the first half of 2024, an **18% increase** compared to the same period in 2023[12](index=12&type=chunk) [Acquisition Strategy](index=4&type=section&id=Acquisition%20Strategy) Associated Capital Group intends to accelerate the use of its capital by pursuing acquisitions and alliances to expand its product offerings and distribution channels - The company plans to leverage its research and investment capabilities to pursue acquisitions and alliances, broadening its product offerings and distribution[15](index=15&type=chunk) - Through Gabelli Private Equity Partners, the company is actively seeking to acquire privately owned, family-started businesses controlled by their founding families[15](index=15&type=chunk) [Capital Allocation and Shareholder Returns](index=4&type=section&id=Capital%20Allocation%20and%20Shareholder%20Returns) [Shareholder Compensation](index=4&type=section&id=Shareholder%20Compensation) In Q2 2024, the company paid a semi-annual dividend of $0.10 per share and repurchased 65,469 Class A shares for $2.2 million | Action | Details | | :--- | :--- | | Dividend | $0.10 per share semi-annual dividend paid on June 27, 2024 | | Share Repurchases | 65,469 Class A shares for $2.2 million at an average price of $33.88/share | | Buyback Authorization | Increased by 200,000 shares to a total of 439,487 shares | - Since its inception in 2015, the company has returned a total of **$178.5 million** to shareholders through share repurchases, exchange offers, and dividends[17](index=17&type=chunk) [Charitable Contributions](index=4&type=section&id=Charitable%20Contributions) The Board of Directors approved a $4.3 million, or $0.20 per share, shareholder designated charitable contribution (SDCC) - A new shareholder designated charitable contribution (SDCC) of **$4.3 million** (**$0.20 per share**) was approved on August 7, 2024[16](index=16&type=chunk) - Including the current contribution, the SDCC program has donated a cumulative total of approximately **$42 million** on behalf of shareholders[16](index=16&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) [Reconciliation of Operating Loss Before Management Fee](index=5&type=section&id=Reconciliation%20of%20Operating%20Loss%20Before%20Management%20Fee) The company presents Operating Loss Before Management Fee, a non-GAAP measure, to better illustrate its core operating results by excluding the incentive-based management fee - Management uses the non-GAAP measure "Operating loss before management fee expense" to evaluate business operations, as the management fee is based on pre-tax income which includes non-operating items like investment gains/losses[21](index=21&type=chunk) | Reconciliation ($ in 000's) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Operating loss - GAAP | $(8,644) | $(8,604) | | Add: management fee expense | $2,424 | $3,087 | | **Operating loss before management fee - Non-GAAP** | **$(6,220)** | **$(5,517)** | [Unaudited Condensed Consolidated Financial Statements](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Statements of Financial Condition (Balance Sheet)](index=6&type=section&id=Statements%20of%20Financial%20Condition%20(Balance%20Sheet)) As of June 30, 2024, the company's total assets were $949.0 million, with total liabilities of $27.8 million and total equity of $915.5 million | Key Balance Sheet Items ($ in thousands) | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and US Treasury Bills | $387,377 | $406,642 | | Investments in securities and partnerships | $442,294 | $420,706 | | **Total Assets** | **$949,016** | **$943,797** | | Total Liabilities | $27,848 | $30,719 | | **Total Equity** | **$915,479** | **$906,975** | [Statements of Income](index=7&type=section&id=Statements%20of%20Income) For the second quarter of 2024, Associated Capital Group reported total revenues of $2.6 million and a net income of $3.0 million, resulting in a diluted EPS of $0.14 | Key Income Statement Items ($ in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | Total revenues | $2,595 | $2,382 | | Operating loss before management fee | $(3,232) | $(2,927) | | Income before income taxes | $3,578 | $5,140 | | **Net income attributable to AC** | **$2,985** | **$3,371** | | **Diluted Net income per share** | **$0.14** | **$0.15** | [Forward-Looking Statements](index=8&type=section&id=Forward-Looking%20Statements) This section provides a standard safe harbor statement, cautioning that the press release contains forward-looking statements based on current expectations - The report contains forward-looking statements regarding future events and financial performance, which are not guarantees of future results and are based on current expectations[29](index=29&type=chunk) - Key risks that could cause actual results to differ include securities market declines affecting AUM, negative product performance, and general economic downturns[30](index=30&type=chunk)

Core Viewpoint - Associated Capital Group, Inc. reported a decline in assets under management (AUM) and net income for the second quarter of 2024, while also announcing a charitable contribution and shareholder returns through dividends and share repurchases [1][3][13]. Financial Performance - AUM at the end of the second quarter was $1.36 billion, down from $1.55 billion at the end of the previous quarter [1][3][7]. - Book value per share increased to $42.87 from $42.80 at the end of the previous quarter [1]. - Total revenues for the second quarter were $2.6 million, compared to $2.4 million in the same quarter of 2023 [4][21]. - Net income for the quarter was $2.985 million, a decrease from $3.371 million in the same quarter of 2023 [2][22]. Revenue Breakdown - Revenues from the GAMCO International SICAV – GAMCO Merger Arbitrage increased to $1.3 million from $1.0 million year-over-year [4]. - Other revenues decreased slightly to $1.3 million from $1.4 million in the prior year [4]. Operating Expenses - Total operating expenses, excluding management fees, rose to $5.8 million from $5.3 million in the same quarter of 2023, primarily due to increased marketing expenses and stock-based compensation [5][21]. - The management fee for the quarter was $0.4 million, down from $0.5 million in the previous year [6]. Investment Income - Net investment and other non-operating income was $7.3 million, down from $8.6 million in the same quarter of 2023, influenced by market conditions and interest income [6][21]. - The effective tax rate for the quarter was 19.1%, significantly lower than the 35.8% rate in the same quarter of the previous year [6]. Shareholder Returns - The company returned $4.4 million to shareholders through dividends and share repurchases in the second quarter [1][14]. - A charitable contribution of $4.3 million, or $0.20 per share, was approved by the Board of Directors [1][13]. Market Context - Worldwide M&A activity reached $1.5 trillion in the first half of 2024, an 18% increase compared to the previous year, with U.S. deal-making accounting for 53% of this activity [10].

Financial Performance - Assets under management (AUM) at June 30, 2024, were $1.36 billion, down from $1.55 billion at March 31, 2024, and $1.55 billion at June 30, 2023 [1][3][7] - Book value per share increased to $42.87 at the end of the quarter, compared to $42.80 at March 31, 2024, and $41.41 at June 30, 2023 [1][3][22] - Total revenues for the second quarter were $2.6 million, up from $2.4 million in the same quarter of 2023 [4][21] - Net income for the quarter was $2.985 million, compared to $3.371 million in the second quarter of 2023, resulting in a diluted net income per share of $0.14 [2][22] Shareholder Returns - The company returned $4.4 million to shareholders through dividends and share repurchases in the second quarter [1] - A shareholder designated charitable contribution of $0.20 per share was approved, totaling approximately $4.3 million [1][13] - Since inception, the company has returned $178.5 million to shareholders through various means, including dividends and share repurchases [14][15] Operating Expenses - Total operating expenses, excluding management fees, were $5.8 million in the second quarter of 2024, compared to $5.3 million in the same quarter of 2023 [5][21] - The increase in operating expenses was primarily due to $0.6 million in marketing expenses related to the merger arbitrage SICAV and a $0.3 million increase in stock-based compensation [5][6] Investment Strategy - The company focuses on alternative investment strategies, particularly in merger arbitrage, which aims for absolute returns independent of market conditions [9][11] - The merger arbitrage strategy generated gross returns of -1.37% for the second quarter of 2024 [10] Market Context - Worldwide M&A activity reached $1.5 trillion in the first half of 2024, an 18% increase compared to the previous year, with U.S. deal-making accounting for 53% of this activity [10]

Core Insights - Associated Capital Group, Inc. announced a preliminary range for its second quarter book value of $42.75 to $42.95 per share, reflecting a slight increase from $42.80 per share at March 31, 2024, and a notable rise from $41.41 per share at June 30, 2023 [1] Company Overview - Associated Capital Group, Inc. is a diversified global financial services company based in Greenwich, Connecticut, providing alternative investment management through Gabelli & Company Investment Advisers, Inc. The company has also allocated proprietary capital for direct investments in new and existing businesses [2] Direct Investment Business - The direct investment business of Associated Capital Group is developing along several core pillars, including Gabelli Private Equity Partners, LLC, which was formed in August 2017 with $150 million of authorized capital as a "fund-less" sponsor, and Gabelli Principal Strategies Group, LLC, created in December 2015 to pursue strategic operating initiatives [2]

Core Insights - Associated Capital Group, Inc. announced a preliminary range for its second quarter book value of $42.75 to $42.95 per share, reflecting a slight increase from $42.80 per share at March 31, 2024, and a notable rise from $41.41 per share at June 30, 2023 [1] Company Overview - Associated Capital Group, Inc. is a diversified global financial services company based in Greenwich, Connecticut, providing alternative investment management through Gabelli & Company Investment Advisers, Inc. [2] - The company has allocated proprietary capital for its direct investment business, which focuses on new and existing businesses, and includes initiatives like Gabelli Private Equity Partners, LLC and Gabelli Principal Strategies Group, LLC [2]

Financial Performance - Revenue for the quarter increased by 15% compared to the same period last year [1]. - Net profit margin improved to 12%, up from 10% in the previous quarter [2]. - Operating expenses were reduced by 8% due to cost-saving initiatives [3]. Market Expansion - The company entered two new international markets, increasing its global presence to 15 countries [4]. - Sales in the Asia-Pacific region grew by 25%, driven by strong demand in China and India [5]. - A new distribution center was opened in Europe to support future growth [6]. Product Development - Launched three new products, which contributed 20% of total revenue this quarter [7]. - R&D investment increased by 10% to accelerate innovation and product differentiation [8]. - Customer feedback on the new product line has been overwhelmingly positive [9]. Operational Efficiency - Supply chain optimization led to a 5% reduction in delivery times [10]. - Inventory turnover improved by 12%, reflecting better inventory management [11]. - The company implemented a new ERP system to streamline operations [12]. Strategic Partnerships - Formed a strategic alliance with a leading technology provider to enhance product offerings [13]. - Collaborated with a major retailer to expand distribution channels [14]. - Signed a long-term agreement with a key supplier to ensure stable raw material costs [15]. Employee Engagement - Employee satisfaction scores increased by 10% following the introduction of new wellness programs [16]. - The company invested in training programs, resulting in a 15% improvement in employee productivity [17]. - A new leadership development program was launched to prepare future leaders [18]. Sustainability Initiatives - Reduced carbon emissions by 20% through the adoption of renewable energy sources [19]. - Achieved a 30% reduction in water usage across all manufacturing facilities [20]. - The company committed to achieving net-zero emissions by 2030 [21]. Customer Experience - Customer retention rates improved by 5% due to enhanced service offerings [22]. - Introduced a new loyalty program, which saw a 10% increase in customer engagement [23]. - Customer satisfaction scores reached an all-time high of 90% [24]. Risk Management - Implemented new cybersecurity measures to protect customer data [25]. - Conducted a comprehensive risk assessment to identify potential vulnerabilities [26]. - Established a crisis management team to respond to unforeseen events [27]. Corporate Governance - Appointed two new independent directors to the board, enhancing governance [28]. - Revised the company's code of conduct to align with global best practices [29]. - Increased transparency by publishing detailed quarterly reports [30]. Shareholder Value - Declared a quarterly dividend of $0.50 per share, representing a 10% increase [31]. - Share buyback program reduced outstanding shares by 5% [32]. - Stock price increased by 18% over the past quarter, outperforming the market [33].

Core Viewpoint - Associated Capital Group, Inc. reported its financial results for the first quarter of 2024, showing a decrease in assets under management (AUM) and net income compared to the previous year, while revenues increased significantly [1][2][3]. Financial Performance - AUM at the end of Q1 2024 was $1.55 billion, down from $1.80 billion at the end of Q1 2023, reflecting a decrease of approximately 14% year-over-year [3][7]. - Total revenues for Q1 2024 were $3.0 million, an increase of 22% from $2.5 million in Q1 2023 [4][22]. - Net income for Q1 2024 was $13.8 million, down from $17.8 million in Q1 2023, representing a decline of about 22% [2][23]. - Net income per share (diluted) decreased to $0.64 from $0.81 in the prior year [2][23]. Revenue Breakdown - Revenues from the GAMCO International SICAV – GAMCO Merger Arbitrage increased to $1.7 million in Q1 2024 from $1.1 million in Q1 2023 [4]. - Other revenues decreased slightly to $1.3 million from $1.4 million year-over-year [4]. Operating Expenses - Total operating expenses, excluding management fees, rose to $6.0 million in Q1 2024 from $5.1 million in Q1 2023, primarily due to increased marketing expenses and stock-based compensation [5][22]. - The management fee for Q1 2024 was $2.0 million, down from $2.5 million in Q1 2023 [6]. Investment Income - Net investment and other non-operating income was $22.6 million in Q1 2024, compared to $24.7 million in Q1 2023, driven by mark-to-market increases from GAMCO holdings and merger arbitrage partnerships [6][22]. Shareholder Actions - The Board of Directors declared a semi-annual dividend of $0.10 per share, payable on June 27, 2024 [14]. - The company repurchased 117,354 Class A shares for $3.9 million during the first quarter [14]. Market Context - Global M&A activity reached $798 billion in Q1 2024, a 38% increase compared to the same period in 2023, with the US accounting for 61% of this activity [11]. - The energy and power sector was the most active, followed by technology and financials [11].

Core Insights - Associated Capital Group, Inc. announced a preliminary book value range for Q1 2024 of $42.67 to $42.87 per share, an increase from $42.11 per share at the end of 2023 and $41.30 per share a year ago [1] Company Overview - Associated Capital Group, Inc. is a diversified global financial services company based in Greenwich, Connecticut, providing alternative investment management through Gabelli & Company Investment Advisers, Inc. [2] - The company has allocated proprietary capital for direct investments in new and existing businesses, focusing on several core pillars including Gabelli Private Equity Partners, LLC, and Gabelli Principal Strategies Group, LLC [2]

Part I [Business](index=5&type=section&id=Item%201%3A%20Business) Associated Capital Group provides alternative investment management and direct investment services, managing approximately **$1.59 billion** in assets as of December 31, 2023, under extensive U.S. and European regulation - The company's operations are segmented into alternative investment management and a direct investment business focused on controlling other entities[16](index=16&type=chunk) - Investment management is primarily conducted through its wholly-owned subsidiary, Gabelli & Company Investment Advisers, Inc. (GCIA), specializing in risk and event arbitrage portfolios[17](index=17&type=chunk) Assets Under Management (AUM) Trend | Year | Total AUM (in millions) | | :--- | :--- | | 2023 | $1,591 | | 2022 | $1,842 | | 2021 | $1,781 | | 2020 | $1,351 | | 2019 | $1,716 | - The direct investment business, launched in 2017, includes Gabelli Private Equity Partners, LLC and Gabelli Principal Strategies Group, LLC, targeting growth capital, leveraged buyouts, and restructurings in small and mid-sized companies[23](index=23&type=chunk)[24](index=24&type=chunk) [Business Strategy](index=7&type=section&id=Business%20Strategy) The company's strategy emphasizes global growth through its proprietary investment approach, expanding investment partnerships, pursuing acquisitions, and exploring private equity and international collaborations - The core investment philosophy is the proprietary "Private Market Value (PMV) with a CatalystTM" approach, rooted in Graham & Dodd principles[27](index=27&type=chunk) - Strategic goals include expanding the Investment Partnerships advisory business, pursuing acquisitions and direct investments, launching a private equity business, and establishing partnerships for Asian/European distribution[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) [Competition](index=7&type=section&id=Competition) The alternative asset management industry is highly competitive, with the company facing larger firms and relying on long-term investment performance to attract institutional clients - The company faces intense competition from larger alternative investment firms, insurance companies, banks, and financial institutions with greater resources[32](index=32&type=chunk) - Competition is primarily driven by long-term investment performance records, often requiring a successful track record of five years or more for institutional investors[33](index=33&type=chunk) [Regulation](index=8&type=section&id=Regulation) The company's operations are extensively regulated in the U.S. and Europe, imposing significant compliance, disclosure, and operational requirements to protect investors - The company and its subsidiary GCIA are subject to extensive U.S. federal regulation by the SEC under the Advisers Act, imposing fiduciary duties and disclosure obligations[36](index=36&type=chunk)[37](index=37&type=chunk) - International operations are impacted by tax compliance acts such as FATCA and the OECD's Common Reporting Standard (CRS), adding significant administrative burdens[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) - European activities are regulated by AIFMD and MiFID II, imposing additional compliance, disclosure, and capital requirements while restricting "soft dollars" for research[44](index=44&type=chunk)[48](index=48&type=chunk) [Employees](index=11&type=section&id=Employees) As of March 6, 2024, the company had **25** full-time employees across various functions and utilizes services from its former parent, GAMCO - As of March 6, 2024, the company employed **25 full-time staff**[52](index=52&type=chunk) - The company utilizes services and research analysts from its former parent, GAMCO, under a transitional services agreement[52](index=52&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A%3A%20Risk%20Factors) As a smaller reporting company, Associated Capital Group is exempt from providing the information required for this item - Smaller reporting companies are not required to provide the information for this item[56](index=56&type=chunk) [Unresolved Staff Comments](index=12&type=section&id=Item%201B%3A%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - No unresolved staff comments are reported[56](index=56&type=chunk) [Cybersecurity](index=12&type=section&id=Item%201C%3A%20Cybersecurity) The company maintains a comprehensive cybersecurity risk management program, overseen by the Board, and has not experienced any material incidents in the past three years - The company's cybersecurity risk management program encompasses risk assessments, a dedicated security team, training, an incident response plan, and third-party risk management[57](index=57&type=chunk) - The Board of Directors oversees cybersecurity threats, with the Chief Technology Officer, possessing over 20 years of experience, leading the cybersecurity team[61](index=61&type=chunk) - The company has not experienced any material cybersecurity incidents in the last three years, with related expenses remaining immaterial[58](index=58&type=chunk) Part II [Properties](index=13&type=section&id=Item%202%3A%20Properties) The company owns office properties in Greenwich, CT, and London, UK, leasing portions to affiliates like GAMCO while also subleasing space from GAMCO Lease Transactions with Affiliates (GAMCO) | Transaction | 2023 (in thousands) | 2022 (in thousands) | | :--- | :--- | :--- | | Income from leasing properties to affiliates | $360.9 | $426.2 | | Expense for subleasing property from GAMCO | $74.0 | $72.1 | [Legal Proceedings](index=13&type=section&id=Item%203%3A%20Legal%20Proceedings) The company may face legal and regulatory actions but is unaware of any probable or reasonably possible material losses as of December 31, 2023 - Management is not aware of any probable or reasonably possible losses from legal proceedings as of December 31, 2023[65](index=65&type=chunk) [Market For The Registrant's Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities](index=14&type=section&id=Item%205%3A%20Market%20For%20The%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20And%20Issuer%20Purchases%20Of%20Equity%20Securities) Associated Capital Group's Class A common stock trades on the NYSE, and the company actively repurchased **85,342 shares** in Q4 2023, with an additional **350,000 shares** authorized for repurchase in February 2024 Class A Common Stock Repurchases (Q4 2023) | Period | Total Shares Repurchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Oct 2023 | 31,201 | $34.95 | | Nov 2023 | 25,477 | $33.84 | | Dec 2023 | 28,664 | $34.60 | | **Total** | **85,342** | **$34.50** | - As of December 31, 2023, **156,664 shares** remained available for repurchase, with an additional **350,000 shares** authorized by the Board on February 6, 2024[70](index=70&type=chunk) [Management's Discussion and Analysis (MD&A)](index=14&type=section&id=Item%207%3A%20Management%27s%20Discussion%20And%20Analysis%20%28%27MD%26A%27%29%20Of%20Financial%20Condition%20And%20Results%20Of%20Operations) In 2023, the company achieved a **$37.5 million** net income turnaround from a **$48.9 million** loss in 2022, driven by investment gains and higher interest income, despite a revenue decline and a **13.6%** decrease in AUM to **$1.59 billion** Key Financial Performance | Metric | Full Year 2023 | Full Year 2022 | | :--- | :--- | :--- | | AUM (end of period) | $1,591 million | $1,842 million | | Net Income/(Loss) per Share-diluted | $1.72 | ($2.22) | | Book Value per Share | $42.11 | $40.48 | - The shift from a net loss in 2022 to a net income in 2023 was primarily driven by a significant positive swing in net gain/(loss) from investments and higher interest income[97](index=97&type=chunk) - Total AUM decreased by **$251 million** (**13.6%**) during 2023, primarily due to **$325 million** in net investor outflows, partially offset by market appreciation[86](index=86&type=chunk) [Operating Results (2023 vs. 2022)](index=17&type=section&id=Operating%20Results%20for%20the%20Year%20Ended%20December%2031%2C%202023%20as%20Compared%20to%20the%20Year%20Ended%20December%2031%2C%202022) In 2023, total revenues decreased by **16.7%** to **$12.7 million**, while a **$43.0 million** net gain from investments and doubled interest income led to a **$37.5 million** net income, reversing a **$48.9 million** net loss in 2022 Revenue Breakdown (in thousands) | Revenue Type | 2023 | 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Investment advisory and incentive fees | $12,324 | $14,801 | ($2,477) | (16.7)% | | Other revenues | $359 | $427 | ($68) | (15.9)% | | **Total revenues** | **$12,683** | **$15,228** | **($2,545)** | **(16.7)%** | Key Income Statement Items (in millions) | Item | 2023 | 2022 | | :--- | :--- | :--- | | Net Gain/(Loss) from Investments | $43.0 | ($56.5) | | Interest and Dividend Income | $25.3 | $10.7 | | Management Fee Expense | $5.4 | $0.0 | | Net Income/(Loss) | $37.5 | ($48.9) | [Liquidity and Capital Resources](index=19&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$317.5 million** in cash and equivalents, reporting **$145.1 million** in net operating cash flow in 2023, a reversal from **$70.6 million** used in 2022, primarily due to securities adjustments and net income Summary of Cash Flows (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $145,075 | ($70,552) | | Net Cash from Investing Activities | $5,752 | $402 | | Net Cash from Financing Activities | ($25,039) | ($37,175) | | **Net Change in Cash** | **$125,788** | **($107,325)** | - Operating cash flow in 2023 was primarily driven by a **$125.9 million** net decrease in securities (due to rolling investments into short-term treasury bills) and **$37.7 million** in net income[100](index=100&type=chunk) - Financing activities in 2023 included **$16.3 million** for stock buybacks, **$4.4 million** for redemptions of noncontrolling interests, and **$4.3 million** for dividend payments[102](index=102&type=chunk) [Critical Accounting Policies](index=20&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies involve significant judgment in revenue recognition, fair value investment valuation, VIE consolidation, equity method accounting for partnerships, and income tax computation - Key critical accounting policies encompass Revenue Recognition, Investments in Securities, Consolidation, Investments in Partnerships and Affiliates, and Income Taxes[104](index=104&type=chunk) - Incentive fees are generally recognized at the end of an annual measurement period, while investment advisory fees are recognized as services are performed[105](index=105&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) - The company consolidates entities where it is determined to be the primary beneficiary, possessing both the power to direct significant activities and the obligation/right to absorb significant losses or benefits[113](index=113&type=chunk) [Financial Statements and Supplementary Data](index=24&type=section&id=Item%208%3A%20Financial%20Statements%20And%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2023 and 2022, including the independent auditor's unqualified opinion and detailed financial statements with accompanying notes - Deloitte & Touche, LLP, the independent auditor, issued an unqualified opinion, affirming the fair presentation of financial position and results of operations in conformity with U.S. GAAP[126](index=126&type=chunk) Consolidated Statement of Income Highlights (in thousands) | Description | 2023 | 2022 | | :--- | :--- | :--- | | Total Revenues | $12,683 | $15,228 | | Operating Loss | ($16,947) | ($11,262) | | Net Gain/(Loss) from Investments | $43,033 | ($56,513) | | Net Income/(Loss) Attributable to Shareholders | $37,451 | ($48,907) | | Diluted EPS | $1.72 | ($2.22) | Consolidated Statement of Financial Condition Highlights (in thousands) | Description | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $317,487 | $218,462 | | Total Investments (Securities & Partnerships) | $555,463 | $658,294 | | Total Assets | $943,797 | $927,690 | | Total Liabilities | $30,719 | $27,301 | | Total Equity | $906,975 | $890,196 | [Notes to Consolidated Financial Statements](index=34&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies, financial components, investment partnerships, fair value measurements, income taxes, related party transactions, and equity structure - In August 2022, the company deconsolidated The PMV Entities, recognizing a **$3.6 million** loss, after losing control of the Sponsor's manager[155](index=155&type=chunk)[216](index=216&type=chunk) - The company engages in significant related party transactions with its former parent, GAMCO, and other affiliates, including sub-advisory fees, affiliated fund investments, lease agreements, and shared administrative services[247](index=247&type=chunk)[254](index=254&type=chunk)[256](index=256&type=chunk) - The company maintains a stock award and incentive plan, primarily issuing cash-settled Phantom Restricted Stock Awards (Phantom RSAs), with a **$3.5 million** liability for outstanding RSAs as of December 31, 2023[261](index=261&type=chunk)[262](index=262&type=chunk) [Controls and Procedures](index=59&type=section&id=Item%209A.%20Controls%20And%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with no material changes in Q4 2023 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[277](index=277&type=chunk) - Management concluded that the company maintained effective internal control over financial reporting as of December 31, 2023[279](index=279&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=60&type=section&id=Item%2010%3A%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2024 Proxy Statement - This section incorporates information by reference from the Company's 2024 Proxy Statement[283](index=283&type=chunk) [Executive Compensation](index=60&type=section&id=Item%2011%3A%20Executive%20Compensation) Information on executive compensation is incorporated by reference from the 2024 Proxy Statement - This section incorporates information by reference from the Company's 2024 Proxy Statement[286](index=286&type=chunk) [Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters](index=60&type=section&id=Item%2012%3A%20Security%20Ownership%20Of%20Certain%20Beneficial%20Owners%20And%20Management%20And%20Related%20Stockholder%20Matters) Information on security ownership is incorporated by reference from the 2024 Proxy Statement - This section incorporates information by reference from the Company's 2024 Proxy Statement[286](index=286&type=chunk) [Certain Relationships And Related Transactions, and Director Independence](index=60&type=section&id=Item%2013%3A%20Certain%20Relationships%20And%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the 2024 Proxy Statement - This section incorporates information by reference from the Company's 2024 Proxy Statement[286](index=286&type=chunk) [Principal Accountant Fees And Services](index=60&type=section&id=Item%2014%3A%20Principal%20Accountant%20Fees%20And%20Services) Information on principal accountant fees and services is incorporated by reference from the 2024 Proxy Statement - This section incorporates information by reference from the Company's 2024 Proxy Statement[286](index=286&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=60&type=section&id=Item%2015%3A%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all documents filed with the Form 10-K report, including consolidated financial statements and various legal and corporate exhibits - This section lists all documents filed with the report, including financial statements and various legal and corporate exhibits[286](index=286&type=chunk)