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'THE DECADE OF THE CONSOLIDATOR' (int'l edition)When Mario J. Gabelli signed on as the investment adviser for London-based Global Asset Management's new North American offshore fund, he was promised freedom to buy, sell, or short whatever he wanted. That flexibility has served the star fund manager's shareholders well. Although the fund had an inauspicious start--it opened as Wall Street was crashing on Oct. 19, 1987--GAM GAMCO has turned in a stellar performance. Up 8.5% after fees in last year's fourth quarter, the fund returned 54% in 1997 and about 23% annually over the past five years. The fund carries BUSINESS WEEK's top rating for risk-adjusted performance. The 55-year-old chief investment officer of Gabelli Funds Inc. in New York thinks the best opportunities will be found in takeovers and restructurings in 1998. Gabelli is focusing on banks, broadcasters, Baby Bell phone companies, and utilities, all of which have been staple investments in Gabelli's U.S.-based mutual funds. ''The 1990s will be characterized as the decade of the consolidator,'' he says. Gabelli also likes Pennzoil Co., betting the Texas oil company will be taken over or restructured. He's snapping up shares of takeover plays such as precious metals manufacturer Handy & Harman and Pacific Scientific Co., which makes electrical motors, generators, and safety equipment. He's also a +2ing to his stake in Reader's Digest Association Inc. The publisher's shares have dropped but could still see further global growth, he says.
By Kerry Capell in New York
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Updated Jan. 22, 1998 by bwwebmaster
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