Frequently Asked Questions

1. What is Gator Capital Management?
2. What types of clients do you work with?
3. What is your investment philosophy and process?
4. Will you work with my existing Financial Advisor?
5. Do you provide financial planning services?
6. What services do you provide?
7. How are you compensated, and when do you get paid?
8. How will you communicate with me about my account?
9. Who will be working on my account?
10. Will I be able to take part in the investment decisions?
11. Will I have to sell all or part of my current investments to work with you?
12. I have some investments I want to manage on my own. Can I still work with you?
13. Will you charge me an extra fee to consult with my tax advisor or estate planning attorney?
14. Can you arrange for regular payments or transfers of cash to be made from my account?
15. Will I get reports to help with income tax return preparation?
16. Can you provide advice on how I should invest the money in my company's 401(k) Plan?
17. What is the process to start working with you?

1. What is Gator Capital Management?
   Gator Capital Management is a boutique Investment Manager specializing in managing non-diversified, concentrated portfolios of high-quality growth stocks. Our goal is to create wealth for our clients by outperforming the market benchmarks. We offer clients several investment strategies such as our core portfolio (Gator Growth), a small cap focused strategy (Gator Small Cap Growth), a micro cap focused strategy (Gator Micro Cap Growth), an energy-focused portfolio (Gator Energy), and a financial services focused hedge fund (Gator Financial Partners.)

   Gator Capital Management is a Registered Investment Advisor. A copy of our Form ADV Part 2A and 2B can be found here.

2. What types of clients do you work with?
   Our clients are either individuals or institutions with a broad range of backgrounds and financial sophistication. They range from young families starting to accumulate savings to partners in some of the largest firms on Wall Street. Our clients are attracted to our market-tested investment philosophy and investment process, and our straight-forward interaction that helps to reduce stress for the client; we strive to have regular, open communication with our clients. We don’t earn commissions for selling products, and we have an alignment of interests because we only do well if our clients do well.

3. What is your investment philosophy and process?
   Gator seeks to build focused portfolios of high-quality growth stocks.  A high-quality growth stock is a company with a wide and growing economic moat.  Economic moat is a term popularized by Warren Buffett to describe a durable competitive advantage.  For more information about the Gator Investment Philosophy, please click here.

4. Will you work with my existing Financial Advisor?
   We would be happy to work with your existing financial advisor. Simply complete our client agreement and a sign a limited trading authorization to allow us to make transactions in your brokerage account. We will work with your Financial Advisor and will set up a sub-account within your main brokerage account to hold the portfolio we manage for you.

5. Do you provide financial planning services?
   We provide financial plans.  We charge $1,000 for a financial plan, but if you open an investment account with us, we rebate the fee.

   Gator can assist clients with personal financial planning by:

   • Projecting living expense levels sustainable over one's lifetime, based on a client's assets, tax rates, assumed inflation rate and assumptions unique to each client's spending plans and goals.
   • Providing guidance on gifting strategies, including amounts and forms of the gifts.
   • Developing savings strategies for specific long-term goals, such as paying for college education and retirement.
   • Analyzing specialized client holdings, such as stock options, concentrated and highly appreciated securities, and stock purchased through an employee stock purchase program.
   • Planning and calculating opportunities to use tax-deferred retirement plans for both company-employed and self-employed individuals.
   • Providing guidance in selecting the best personal debt choices, including home mortgages and home equity loans.

6. What investment services do you provide?
   We consult with each client to determine overall financial objectives and risk comfort level, followed by a recommendation of the appropriate investment strategy consistent with those goals. On a continual basis, we monitor our portfolios, the markets and the client's situation to adjust the investment holdings to reflect changing conditions. We report quarterly to clients on their investment assets and performance, and encourage at least annual face-to-face meetings to review their overall financial health and investment program. As issues arise, we provide more detailed financial planning analysis and guidance.

7. How are you compensated, and when do you get paid?
   We charge a management fee based on a percentage of the value of the assets we manage. We accept no commissions or other forms of compensation from investment product providers or financial institutions. The fee is quoted as an annual percentage fee, and is billed quarterly in arrears by taking the value of managed assets at the end of each calendar quarter and applying one-fourth of that annual percentage fee. For example, if the annual fee is 1%, then 1/4 of 1% is applied to each ending quarter account balance. The fee is normally deducted directly from the client account or accounts in arrears unless the client prefers to prepay the fee.

   We also offer an incentive fee arrangement at the clients' request.  In these scenarios, we would charge either 10 or 25 basis points (depending on the investment portfolio) of asset under management as a base fee and 20% of the profits in excess of a market benchmark.

8. How will you communicate with me about my account?
   We meet with each client at least once a year to review investment performance. We will also have occasional special mailings and email alerts on topics of interest. In addition, most clients talk with us by telephone several times during the year. Clients are also encouraged to contact us by email, fax or telephone at any time to discuss investments or any financial planning matter, or ask questions.

9. Who will be working on my account?
   Each client typically meets with either one or two of our investment professionals — either the client’s Portfolio Manager or an Investment Advisor supported by the client’s Portfolio Manager. They are responsible for managing your portfolio on a day-to-day basis, and will also consult with you on other financial planning issues.

10. Will I be able to take part in the investment decisions?
    No. At the outset, your investment goals, previous investing experiences, tolerance for risk, and your specific preferences will be the most important criteria behind the investment strategy we recommend. As we make specific stock investments, we will explain the thesis behind each investment, but we are not able to handle portfolios that require client approval for every investment.

     

11. Will I have to sell all or part of my current investments to work with you?
    Yes. In most cases, we will liquidate your existing holdings and reinvest the proceeds in order to implement our investment strategy. However, some clients may have significant unrealized investment gains in their current holdings that could trigger large income taxes if they were sold. In other cases, clients have specific holdings that they have a particular desire to keep. In these cases, we recommend the client keep these investments in a separate account; we will not collect a fee on these investments.

12. I have some investments I want to manage on my own. Can I still work with you?
    Yes. We can set up a separate account that will hold the assets you would like us to manage, and only collect our fee on those assets. If you prefer, your self-managed account can be set up on our system as an unmanaged "custodial" account, allowing us to execute trades that you direct us to make, and to prepare tax and performance reports on your self-managed assets. We only ask that the assets subject to our normal management fee meet our normal account minimums.

13. Will you charge me an extra fee to consult with my tax advisor or estate planning attorney?
    No. Such consultations are offered as part of our normal management fee. In fact, we welcome the opportunity to discuss tax or estate planning opportunities with other professionals that you’ve engaged. Because they may charge you for their time, we will not undertake discussions without your express permission.

    If you need to find a tax professional, attorney, insurance, or retirement plan specialist, we are happy to provide referrals to professionals we know that can assist you. Please note that we do not accept referral fees for referring a client.

14. Can you arrange for regular payments or transfers of cash to be made from my account?
    Yes. We can set up regular, periodic transfers of a fixed dollar amount on a bi-monthly, monthly or quarterly basis. Alternatively, we can arrange to have the interest and dividends earned paid out of your account, which can vary from month to month.

15. Will I get reports to help with income tax return preparation?
    Your custodian will provide reports that you will use in preparation of your income taxes.  Gator Capital does not provide tax advice.

16. Can you provide advice on how I should invest the money in my company's 401(k) Plan?
    Yes. As part of your relationship with Gator Capital, we can provide guidance on how to choose among the available funds in your company’s 401(k) plan.

17. What is the process to start working with you?
    The process of working with Gator Capital is described on this link: Open an Account.