Gator Financial Partners’ commentary for the first quarter ended March 31, 2026.
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Dear Gator Partners:
We are pleased to provide you with Gator Financial Partners, LLC’s, Gator Offshore Partners, Ltd.’s, and Gator Qualified Partners, LLC’s (the “Funds”) 2026 1st quarter investor letter. This letter reviews the Fund’s 2026 Q1 and shares our investment thesis on Ameriprise Financial.
Review of Q1 2026
During the 1st quarter of 2026, the Funds had weak absolute and mixed relative performance. We underperformed the broader market, but we outperformed the Financials sector benchmark. The Fund’s holdings in small and mid-cap Financials slightly outperformed the largest bank and insurance companies again this quarter. Our long positions in First Financial Bancorp, Webster Financial, Northeast Bank, Esquire Financial, and WEX were the top contributors to the Fund’s performance. The largest detractors were long positions in Compass, First Citizens, UBS Group, SLM Corp, and Barclays.
| 2026 Q1 | Total Return Since Inception | Annualized Return Since Inception | |
|---|---|---|---|
| Gator Financial Partners, LLC | -7.22% | 2,989.38% | 21.32% |
| S&P 500 Total Return Index | -4.33% | 616.76% | 11.74% |
| S&P 1500 Financials Index | -8.89% | 341.40% | 8.72% |
| Gator Offshore Partners, Ltd. | -7.42% | 357.63% | 13.51% |
| S&P 500 Total Return Index | -4.33% | 331.36% | 12.95% |
| S&P 1500 Financials Index | -8.89% | 240.74% | 10.76% |
| Gator Qualified Partners, LLC | -5.75% | 10.19% | 13.81% |
| S&P 500 Total Return Index | -4.33% | 6.18% | 8.33% |
| S&P 1500 Financials Index | -8.89% | -3.96% | -5.24% |
Source: Gator Capital Management & Bloomberg
The first quarter was difficult. We had strong results in January, driven by small- to mid-cap regional bank earnings and the unexpected early closing of Compass’s acquisition of Anywhere Real Estate. In February, the market’s tone changed. Market participants became concerned about private credit, which affected alternative asset managers and, to some extent, banks that have exposure to private credit by providing back-leverage to private credit funds. Also, there was a fresh round of fears that Large Language Models (“LLM” or “AI”) were threatening business models such as financial advisors and real estate brokers. Of course, March was dominated by volatility around the U.S./Iran conflict and the potential economic impact of a prolonged conflict and higher oil prices. We were a bit more active than usual during the quarter. We used the January rally in Compass shares to cut the position by 25%. We also sold Webster Financial after it announced a sale to the Spanish bank Santander. We purchased new positions in two companies we previously owned: Ameriprise Financial (see investment thesis below) and Primerica. We also purchased shares in PROG Holdings, a rent-to-own and buy now, pay later (“BNPL”) business spun off from Aaron’s Rents six years ago.
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