AAIC - Gator Capital Management Q4 2020 Investor Letter

• At Gator Capital Management, we are dedicated to the management of concentrated investment portfolios consisting of companies with proven profitability and dominant franchises.
• For the 4th quarter of 2020, the Fund outperformed both the Financials sector benchmark and the overall market. OneMain Financial, First Bancorp Puerto Rico, and Western Alliance Bancorporation were top contributors to performance. The largest detractors were short positions in Lemonade, Lending Club, and First Republic Bank.
• Despite the strong 4th Quarter for the Financials sector, we still see opportunity due to relatively low valuations within the sector and the strong tailwind of the recovering economy.
• We continue to like Financials with low earnings and/or book multiples. We believe these stocks have downside protection. We believe much of the valuation discount is due to fear of credit losses.

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