-	March 31, 2021 Book Value reaches a record $41.22 per share vs. $40.36 at year-end 2020

-	Quarter-end AUM at $1.5 billion based on performance and positive flows

-	Investment Income reflects $131 million positive swing from first quarter 2020

Financial Highlights

($'s in 000's except AUM and per share data)

First Quarter Results

First Quarter Overview

First quarter revenues were $2.3 million, or $0.7 million less than the $3.0 million in revenues for the first quarter of 2020, largely due to lower AUM.  Operating expenses were $6.0 million in the first quarter, an increase of $2.4 million primarily driven by increased compensation expense from Phantom RSA awards, new teammates and salary increases.  The accrued management fee for the first quarter 2021 was $2.7 million versus no accrual in the prior year quarter.

Net investment and other non-operating income was $30.7 million for the quarter, a $130.8 million swing from the $(100.1) million loss reported in the year ago quarter.  This included mark-to-market gains on shares of GAMCO which increased 4.6% to $18.55 per share, or a $2.6 million mark-to-market gain versus a mark-to-market loss of $24.9 million in 2020.

Our provision for income taxes was $5.6 million for the first quarter versus a $23.7 million benefit in the comparable quarter of 2020.

Direct Investing and Acquisitions

Direct Investing

Acquisitions

Associated Capital Group’s plan is to use its capital to focus on private equity and to a larger degree, late stage venture capital.  AC plans remain to focus on pursuing acquisitions with a broad range of targets including private companies and subsidiaries of public companies, using an array of structures to accomplish our objectives, including SPAC’s.

In September 2020, AC completed the $175 million initial public offering of its special purpose acquisition corporation, PMV Consumer Acquisition Corp. (NYSE:PMVC).

PMV Consumer Acquisition Corp. (“PMV”) was created to pursue an initial business combination following the consumer globally with companies having an enterprise valuation in the range of $200 million to $3.5 billion.

Pursuant to Accounting Standards Codification (“ASC”) 810 Consolidation, AC has a controlling financial interest in PMV.  Accordingly, PMV has been included in the consolidated statement of financial condition of AC.  At March 31, 2021, AC’s total assets of $1.2 billion include $177 million of assets relating to the consolidation of PMV.  In addition to PMV, there are several other investment funds that are consolidated within the financial statements due to AC having a controlling financial interest.

Assets Under Management (AUM)

Assets under management at March 31, 2021 were $1.5 billion, up $144 million from year-end 2020 due to net inflows of $111 million and $33 million in market appreciation.

Alternative Investment Management

•	Event-Driven Asset Management

The alternative investment strategies focus on fundamental, active, event-driven special situations and merger arbitrage which has an absolute return focus to generate returns in excess of short term Treasury Bills +400bps.  For the first quarter 2021, merger arbitrage generated gross returns of 4.3% (3.2% net of fees) adding to the historical record of positive net returns in 34 of the last 36 years.   A summary of our performance by strategy is as follows:

*All performance is net of fees and expenses, unless otherwise noted. Performance shown for flagship funds in these strategies. Other fund performance in these stategies may vary. Performance is no guarantee of future results.

**Inception Date: Merger Arb - Feb-85, Event Driven - Jan-87, Credit - Jan-07, Medical - Jan-06

Merger activity in the first quarter totaled $1.3 trillion, an increase of 94% compared to 2020, and the strongest first quarter on record.  This was the third consecutive quarter that deal activity exceeded $1 trillion, and the second strongest quarter for deal activity ever (behind only the second quarter of 2007 when deal activity totaled $1.4 trillion).  M&A in the U.S. was particularly strong, totaling $670 billion, tripling activity in Q1 2020.  The most active sectors were Technology, Financials and Industrials.  We believe the drivers for continued M&A strength remain:  historically low interest rates, simulative governmental policies, as well as more globally competitive corporate strategies adapting to changes in the business landscape hastened by the COVID-19 pandemic.

The strategy is offered domestically through partnerships as well as to institutional investors.  Internationally, the strategy is offered through a number of vehicles, including EU regulated UCITS structures and the London Stock Exchange listed investment company, Gabelli Merger Plus + Trust Plc (GMP-LN).

Shareholder Dividends and Buybacks

At its meeting on May 5, 2021 the Board of Directors declared a semi-annual dividend of $0.10 per share payable June 29, 2021 to shareholders of record on June 15, 2021.

During the first quarter, AC repurchased approximately 119,000 Class A shares at an average investment of $35.24 per share for a total outlay of $4.2 million.

At March 31, 2021, there were 3.2 million Class A shares and 19.0 million Class B shares outstanding.

About Associated Capital Group, Inc.

Associated Capital Group, Inc. (NYSE:AC), based in Greenwich Connecticut, is a diversified global financial services company that provides alternative investment management through Gabelli & Company Investment Advisers, Inc. (“GCIA” f/k/a Gabelli Securities, Inc.). The proprietary capital is earmarked for our direct investment business that invests in new and existing businesses.  The direct investment business is developing along three core pillars; Gabelli Private Equity Partners, LLC (“GPEP”), formed in August 2017 with $150 million of authorized capital as a “fund-less” sponsor; the SPAC business (Gabelli special purpose acquisition vehicles), launched in April 2018; and, Gabelli Principal Strategies Group, LLC (“GPS”) created to pursue strategic operating initiatives.

Operating Loss Before Management Fee

Operating loss before management fee expense represents a non-GAAP financial measure used by management to evaluate its business operations. We believe this measure is useful in illustrating the operating results of the Company as management fee expense is based on pre-tax income before management fee expense, which includes non-operating items including investment gains and losses from the Company’s proprietary investment portfolio and interest expense.  The management fee is calculated based on the year to date income before management fee and income taxes.

The reconciliation of operating loss to operating loss before management fee expense (non-GAAP) is provided below.

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

The financial results set forth in this press release are preliminary. Our disclosure and analysis in this press release, which do not present historical information, contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements convey our current expectations or forecasts of future events. You can identify these statements because they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning. They also appear in any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance of our products, expenses, the outcome of any legal proceedings, and financial results. Although we believe that we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know about our business and operations, the economy and other conditions, there can be no assurance that our actual results will not differ materially from what we expect or believe. Therefore, you should proceed with caution in relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance.

Forward-looking statements involve a number of known and unknown risks, uncertainties and other important factors, some of which are listed below, that are difficult to predict and could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements.  Some of the factors that could cause our actual results to differ from our expectations or beliefs include a decline in the securities markets that adversely affect our assets under management, negative performance of our products, the failure to perform as required under our investment management agreements, and a general downturn in the economy that negatively impacts our operations. We also direct your attention to the more specific discussions of these and other risks, uncertainties and other important factors contained in our Form 10 and other public filings. Other factors that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We do not undertake to update publicly any forward-looking statements if we subsequently learn that we are unlikely to achieve our expectations whether as a result of new information, future developments or otherwise, except as may be required by law.

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