David Gallo, founder of the Valinor Management hedge fund, is one of the infamous “Tiger Cubs” – a name commonly given to those analysts who started at Tiger Management and have gone on to found some of the world’s most profitable hedge funds (Read more about “Tiger Cubs” here). Unfortunately, Gallo’s performance has been less than impressive.
Since the end of the first quarter, his Valinor Management, so named for the place where immortal souls rest in the “Lord of the Rings” trilogy, has underperformed the S&P 500 (SPY) by almost 7 points. Gallo saw a negative return in all of his top 25 stock picks except one – the business service provider Cardtronics Inc (CATM). While the return was a modest 10%, Gallo still reduced his position in the company by 3%. Still, Gallo owns 10 times more shares of Cardtronics than any other hedge fund; Ken Griffin’s Citadel Investment Group is the closest at 247,330 shares compared with Valinor’s 2,433,012 shares.