Pegasus Capital Advisors

Pegasus Capital Advisors L.P. is a private equity investment firm founded in 1995 by former co-founder of Apollo Management and Drexel Burnham Lambert lawyer, Craig Cogut. The firm specializes in leveraged buyout transactions and purchases of distressed securities of middle-market companies. Pegasus identifies complex situations where financial, legal or governmental issues might deter conventional investors and CREATES value by exploring options like revising a business model, entering new markets, introducing new products or technologies, and entering into strategic partnerships.

Pegasus distinguishes itself by focusing significant resources on its operating department, which includes 30+ Operating Advisors who make up nearly half of the entire firm. The department is responsible for working with Pegasus' portfolio companies and overseeing the successful implementation of corporate and financial strategies to increase the value of the businesses. In a way, the operating professionals act as management consultants to Pegasus' portfolio companies. The firm has hired many notable figures throughout its history, including Christopher Sinclair, Paul Dickerson, and Lincoln Bloomfield.

The firm has raised four funds since inception and currently manages US$2 billion in capital. Their offices are located in New York City, NY and Cos Cob, CT. They have made over 70 investments in various companies such as Cannondale and Jenzabar.

History

Pegasus was founded by Craig Cogut in 1995. Prior to founding Pegasus, Cogut was a senior principal and one of the founding partners of Apollo Management. Leon Black and Craig Cogut started Apollo Management during the twilight of their careers at former investment banking power Drexel Burnham Lambert after the bank was besieged by allegations over illegal activities involving high-yield debt. From 1990 to 1995, Cogut was involved in virtually all aspects of Apollo's distressed securities investments and restructurings.

He left Apollo in 1995 and established Pegasus to focus on investments in middle-market companies facing financial distress. Like Jerome Kohlberg who left his KKR to find the middle-market private equity shop Kohlberg & Company, Cogut departed from Apollo to concentrate on the middle-market sector where returns from deals are more reliant on the actual alpha of the investor. In other words, Cogut wanted to concentrate on transactions that could generate returns through revenue growth and operating improvements rather than largely relying on financial leverage.

Funds

Since its founding in 1995, Pegasus has raised four private equity funds with total investor commitments of c. $2 billion. Pegasus raises the capital from a variety of limited partners that include major public and corporate pension funds, leading endowments, fund of funds and family offices. It closed its fourth private equity fund in January 2007, hitting the US$750 million cap that had been set.
*Pegasus Partners I (1995) - $220 million

• Pegasus Partners II (1999) - $561 million
• Pegasus Partners III (2004) - $316 million
• Pegasus Partners IV (2007) - $750 million

As of December 31, 2007, funds II, III, and IV achieved returns of 19.57%, 28.23%, and 16.58%, respectively, despite the ensuing economic downturn caused by the financial crisis and the credit crunch.

Portfolio

Since its inception in 1995, Pegasus has invested in more than 70 companies. The firm tends to invest in the consumer products, technology, business services, energy, financial services, industrial manufacturing and communications sectors. Given the load of energy professionals on the operating team, Pegasus also leads in areas involving sustainability. The following is a selected list of the firm's investments:

• Cannondale Bicycle Corporation
• Jenzabar
• PSI
• Aluminair
• Ark Investment Partners
• Carol's Daughter
• ImageSat International
• NSI
• Palisade Capital
• Spirit Music Group
• T&M Protection Resources
• Hain Pure Protein Corporation
• Merisant

Competitors

Pegasus competes with other major private equity players in the middle-market, including Kohlberg & Company, Audax Group, Berkshire Partners, Golden Gate Capital, and Madison Dearborn Partners.

See also

• Apollo Management
• Leon Black
• Drexel Burnham Lambert

External links

• Pegasus Capital Advisors LP (company website)