It earns a Low Parent rating, a downgrade from Below Average.
Teton is struggling to attract and retain clients. Since the start of 2018 through March 2023, Teton saw more than USD 2 billion in client outflows, leaving the firm with USD 1.5 billion in assets under management as of March 2023. Teton’s 2017 acquisition of Keeley Asset Management has not gone well. The firm merged one and liquidated another of the five funds it bought and has written off USD 15 million of the roughly USD 23 million price it paid for the investment boutique.
To help shore up its business, Teton plans to roll out environmental, social, and governance-focused benchmarks and funds to drum up investor interest. However, it isn’t clear how a Teton-branded ESG product would fit within the firm’s traditional wheelhouse in small- and micro-cap value investing. This new initiative comes on the heels of a new CEO being appointed in early 2023 and a 2022 rights offering that raised roughly USD 5 million, which the public company says will be used for working capital and potentially acquisitions.
Although there has been some change at the firm level, Teton continues to be majority-owned and controlled by Mario Gabelli, the renowned value investor who also controls sister company Gabelli Asset Management and remains a key portfolio manager at both GAM and Teton.