Bill Gates' family office, Cascade Investment, has bought a convertible note from a publicly-traded mutual fund shop led by another billionaire.

Bill Gates Microsoft Technology Adviser

Mario Gabelli, chairman and CEO of Gamco Investors [profile], confirms that Cascade has agreed to buy a $110-million, five-year convertible note in Gamco, a note which could convert into a 15.9-percent stake at $55 per Gamco share (an 80-percent premium over Gamco's $30.56 share price as of market close yesterday). The note has a coupon of 4.5 percent.

Margaret Collins of Bloomberg reported on the Cascade's Gamco investment.

"We are delighted to renew our relationship with Cascade which will provide us with broad flexibility in pursuing our growth initiatives," Gabelli states.

Indeed, Gamco president and chief operating officer Douglas Jamieson tells Bloomberg that this is not the first time that Cascade has invested in Gamco. And the publication notes that Cascade's Alan Heuberger previously served on Gamco's board.

Gamco had $39.3 billion in AUM as of June 30, and it has a market capitalization of $901.64 million as of market close yesterday. That market cap translates into about 2.3 percent of Gamco's AUM. 

Edited by: Neil Anderson, Managing Editor


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