Associated Capital Group, Inc. has reported its financial results for the first quarter ended March 31, 2023. The company's first-quarter revenues were stable at $2.5 million compared to the same period last year. The difference in total operating expenses between Q1 2023 and Q1 2022 was due to lower stock-based compensation expenses. Moreover, the company's net investment and other non-operational income was $24.7 million for the Q1 2023, which represents a significant swing from the $15.0 million loss reported in Q1 2022. The Merger Arbitrage strategy offered by AC has continued to generate gross returns of -0.23% in the first quarter of 2023, while private equity activity remained robust. 

AC's plan is to accelerate the use of its capital by pursuing acquisitions, alliances, and direct investment in operating businesses to broaden its product offerings and add new sources of distribution. AC seeks to be a good corporate citizen by supporting its community through sponsorship of local organizations, and in the Q1 2023, it completed the distribution of $3.0 million to various 501(c)(3) organizations. The company has also declared a semi-annual dividend of $0.10 per share, which is payable on June 29, 2023, and repurchased 52,307 Class A shares worth $1.9 million in the first quarter. 

Overall, AC's financial results for the first quarter of 2023 show stability in its revenues, a considerable swing in net investment and non-operational income, and consistent performance of its Merger Arbitrage strategy. The company's focus on accelerating the use of its capital through acquisitions and direct investments provide investors with long-term growth opportunities. Hence, investors can continue to hold AC's shares in their portfolio.

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Form 8-K - Current report - Item 2.02 Item 9.01

Associated Capital Group Inc - Class A

$AC Reports Stable Q1 Revenues and Significant Growth in Net Investment and Other Income; Focuses on Accelerating Capital Usage through Strategic Investments and Sponsorship of Local Organizations.

Part 1: Analysis of Performance

Associated Capital Group has reported a decline in net income per share for the first quarter of 2023 compared to the same period in 2022. However, the company reported a stable AUM which is a positive sign of stability for the business. Investment advisory and incentive fees remain the largest source of revenue for the company, which is dependent on good investment performance and access to distribution channels. The business has not been adversely affected by the Ukraine-Russia conflict or the COVID-19 pandemic, although the ongoing dynamics created by rising interest rates, high inflation, geo-political conflict and COVID-19 may lead to higher short-term volatility in the company's funds. 

The company's alternative investment management business operates across a range of risk and event arbitrage portfolios in the developed global markets, with a primary objective of generating positive returns and serving a wide variety of investors globally. The company's merger arbitrage strategy aims to earn absolute positive returns, and diversification mitigates single deal-specific risks. However, the company's competitors may pose a challenge as markets and investments become more integrated and global.

The company's direct investment business invests in new and existing businesses, using a variety of techniques and structures with a focus on small and medium-sized companies. The direct investing vehicles allow the business to acquire companies and create long-term value with no pre-determined exit timetable. The company's proprietary portfolio of cash and investments is expected to be used to expand the company's geographic presence, develop new markets, pursue strategic acquisitions and alliances, and invest primarily in funds that the company will manage and provide seed capital for new products. 

Part 2: Forward-looking Analysis

Given the ongoing dynamics created by rising interest rates, high inflation, geo-political conflict, and COVID-19, the future performance of Associated Capital Group may be impacted by short-term volatility in its funds. The company's ability to access various distribution channels, maintain performance levels and engage in strategic acquisitions and alliances will be crucial in the company's success in the current economic environment. 

The company's direct investment business operating across a range of growth, leveraged buyouts, and restructurings, with an emphasis on small and medium-sized companies, puts them in a strong position to take advantage of the current economic situation. The company's diversified portfolio of transactions allows it to mitigate single deal-specific risks. The company's proprietary portfolio of cash and investments provides an opportunity for the company to pursue strategic acquisitions and alliances, expand globally and develop new markets.

In conclusion, while the short-term performance of Associated Capital Group has declined, the company's stable AUM and its diversified investment strategies are positive signs for long-term investors. The company's direct investment business and proprietary portfolio of cash and investments also provide an opportunity for growth in the future. However, the company will need to navigate through the ongoing dynamics created by rising interest rates, high inflation, geo-political conflict, and COVID-19 to maintain its competitive position in the market.

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Form 10-Q - Quarterly report [Sections 13 or 15(d)]

Associated Capital Group's Stable AUM Amid Economic Uncertainty

Associated Capital Group (NYSE:AC) has reported a preliminary range for its first quarter book value of $41.11 to $41.36 per share, which is an improvement from $40.48 per share at December 31, 2022, but a decrease from $41.72 per share at March 31, 2022. Assets under management declined slightly to $1.80 billion at March 31, 2023, compared to $1.84 billion at March 31, 2022. The company plans to release further financial details in May. 

Associated Capital Group is a diversified global financial services company that provides alternative investment management through Gabelli & Company Investment Advisers. It also has a direct investment business that invests in new and existing businesses. 

Investors should note that the report includes "forward-looking statements" that convey the company's current expectations or forecasts of future events. Though the company believes it is basing its expectations on reasonable assumptions, there can be no assurance that actual results will not differ materially. Therefore, investors should be cautious about relying too heavily on these statements.

$AC Reports Preliminary Q1 Book Value Range of $41.11-$41.36 per Share, Assets Under Management Decline Slightly at $1.80 Billion Compared to Last Year

Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405]

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Announcement: AC 10-K Annual Report

Analyst Summary

Associated Capital Group reported its financial results for the fourth quarter and full year-ended December 31, 2022. The company showed lower revenues for the quarter but higher revenues for the full year of 2022 compared to the prior year. Associated Capital Group's income tax rate for the year was 24.7% compared to 21.8% for the prior year, mainly caused by foreign investments and foreign income which reduced the prior year rate. Assets under management at December 31, 2022, set a record of $1.84 billion, up $61 million from year-end 2021. For the Merger Arbitrage strategy, the longest continuously offered fund generated gross returns of 4.40% (3.45% net of fees) for the fourth quarter of 2022, and 4.47% (2.75% net of fees) for the full year. Worldwide M&A activity totaled $3.6 trillion for 2022 with Technology accounting for a record 20% of deal making. The company declared a semi-annual dividend of $0.10 per share, which was paid on December 15, 2022, and during the fourth quarter, repurchased 13,212 Class A shares, investing $0.5 million at an average of $39.66 per share. Looking ahead, the company has a plan to accelerate the use of its capital, making direct investments in businesses, and pursuing acquisitions and alliances to broaden its product offerings and add new sources of distribution.

Announcement: AC 8-K Special Filing

Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend]

$AC Reports Stable Q1 Revenues and Significant Growth in Net Investment and Other Income; Focuses on Accelerating Capital Usage through Strategic Investments and Sponsorship of Local Organizations.

$AC Reports Stable Q1 Revenues and Significant Growth in Net Investment and Other Income; Focuses on Accelerating Capital Usage through Strategic Investments and Sponsorship of Local Organizations.

Associated Capital Group's Stable AUM Amid Economic Uncertainty

Associated Capital Group's Stable AUM Amid Economic Uncertainty

$AC Reports Preliminary Q1 Book Value Range of $41.11-$41.36 per Share, Assets Under Management Decline Slightly at $1.80 Billion Compared to Last Year

$AC Reports Preliminary Q1 Book Value Range of $41.11-$41.36 per Share, Assets Under Management Decline Slightly at $1.80 Billion Compared to Last Year

Announcement: AC 10-K Annual Report

Announcement: AC 10-K Annual Report

Announcement: AC 8-K Special Filing

Announcement: AC 8-K Special Filing

Announcement: AC SC 13G/A Statement of acquisition of beneficial ownership by individuals - amendment

Announcement: AC SC 13G/A Statement of acquisition of beneficial ownership by individuals - amendment