Pegasus Capital Advisors
Encyclopedia
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. Cogut is a Managing Partner at Pegasus Capital Advisors, L.P. Pegasus specializes in sourcing, buying, and building middle-market companies, with special emphasis on companies that compete on the basis of sustainability and resource efficiency. Pegasus aims to identify complex situations where financial, legal or governmental issues might deter conventional investors and create value by exploring options like revising a business model, entering new markets, introducing new products or technologies, and entering into strategic partnerships.
Pegasus takes a multi-disciplinary approach to business, maintaining a diverse team including engineers like Dr. Pat Atkins, the former head of environmental stewardship and energy innovation at Alcoa, one of the top energy users in the world, policy experts like Terry Tamminen, whom the UK Guardian rated as #1 on its list of 50 people saving the planet and Bill Collins, former CEO of GAF Roofing and a leader in the building industry.
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 iGPS, Lighting Science, Molycorp Minerals, Universal Lubricants, and Cannondale.
The firm was recently appointed by Governor Arnold Schwarzenegger of California to serve as the financial advisor to the R20 Regions of Climate Action. The R20 has been created to facilitate, develop and implement low-carbon and climate resilient projects and market based solutions through cooperation between developed and developing country subnational governments.
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.
s 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.
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
.
, Audax Group
, Berkshire Partners
, Golden Gate Capital, and Madison Dearborn Partners.
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
investment firm founded in 1995 by former co-founder of Apollo Management and Drexel Burnham Lambert
Drexel Burnham Lambert
Drexel Burnham Lambert was a major Wall Street investment banking firm, which first rose to prominence and then was forced into bankruptcy in February 1990 by its involvement in illegal activities in the junk bond market, driven by Drexel employee Michael Milken. At its height, it was the...
lawyer, Craig Cogut. Cogut is a Managing Partner at Pegasus Capital Advisors, L.P. Pegasus specializes in sourcing, buying, and building middle-market companies, with special emphasis on companies that compete on the basis of sustainability and resource efficiency. Pegasus aims to identify complex situations where financial, legal or governmental issues might deter conventional investors and create value by exploring options like revising a business model, entering new markets, introducing new products or technologies, and entering into strategic partnerships.
Pegasus takes a multi-disciplinary approach to business, maintaining a diverse team including engineers like Dr. Pat Atkins, the former head of environmental stewardship and energy innovation at Alcoa, one of the top energy users in the world, policy experts like Terry Tamminen, whom the UK Guardian rated as #1 on its list of 50 people saving the planet and Bill Collins, former CEO of GAF Roofing and a leader in the building industry.
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 iGPS, Lighting Science, Molycorp Minerals, Universal Lubricants, and Cannondale.
The firm was recently appointed by Governor Arnold Schwarzenegger of California to serve as the financial advisor to the R20 Regions of Climate Action. The R20 has been created to facilitate, develop and implement low-carbon and climate resilient projects and market based solutions through cooperation between developed and developing country subnational governments.
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 BlackLeon Black
Leon David Black is an American businessman and money manager, with a focus on leveraged buyouts and private equity. He is a son of Eli M. Black , a prominent businessman who controlled the United Brands Company and committed suicide when caught paying bribes to the President of Honduras...
and Craig Cogut started Apollo Management during the twilight of their careers at former investment banking power Drexel Burnham Lambert
Drexel Burnham Lambert
Drexel Burnham Lambert was a major Wall Street investment banking firm, which first rose to prominence and then was forced into bankruptcy in February 1990 by its involvement in illegal activities in the junk bond market, driven by Drexel employee Michael Milken. At its height, it was the...
after the bank was besieged by allegations over illegal activities involving high-yield debt
High-yield debt
In finance, a high-yield bond is a bond that is rated below investment grade...
. 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
Kohlberg & Company
Kohlberg & Company is a private equity firm that focuses on leveraged buyout transactions founded by industry pioneer Jerome Kohlberg, Jr.Today, the firm invests in a variety of transactions including leveraged carveouts , take private transactions and acquisitions of privately held companies...
, Cogut departed from Apollo to concentrate on the middle-market sector where returns from deals are more reliant on the actual alpha
Alpha (investment)
Alpha is a risk-adjusted measure of the so-called active return on an investment. It is the return in excess of the compensation for the risk borne, and thus commonly used to assess active managers' performances...
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 fundPrivate equity fund
A private equity fund is a collective investment scheme used for making investments in various equity securities according to one of the investment strategies associated with private equity....
s 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
Credit crunch
A credit crunch is a reduction in the general availability of loans or a sudden tightening of the conditions required to obtain a loan from the banks. A credit crunch generally involves a reduction in the availability of credit independent of a rise in official interest rates...
.
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. The following is a selected list of the firm's investments:- Universal Lubricants
- Molycorp Minerals
- Lighting Science
- iGPS
- Traxys
- Cannondale Bicycle CorporationCannondale Bicycle CorporationThe Cannondale Bicycle Corporation, is an American bicycle manufacturer, headquartered in Bethel, Connecticut with manufacturing and assembly facilities in Taichung, Taiwan...
- Jenzabar
- PSI
- Carol's Daughter
- ImageSat International
- NSI
- Spirit Music Group
- T&M Protection Resources
- Hain Pure Protein Corporation
Competitors
Pegasus competes with other major private equity players in the middle-market, including Kohlberg & CompanyKohlberg & Company
Kohlberg & Company is a private equity firm that focuses on leveraged buyout transactions founded by industry pioneer Jerome Kohlberg, Jr.Today, the firm invests in a variety of transactions including leveraged carveouts , take private transactions and acquisitions of privately held companies...
, Audax Group
Audax Group
The Audax Group is a private equity investment firm focusing on leveraged buyout, growth capital, mezzanine capital and senior debt, primarily in middle-market companies....
, Berkshire Partners
Berkshire Partners
Berkshire Partners, the Boston-based private equity firm, has invested in leading mid-sized companies for over twenty-five years through eight investment funds with aggregate capital of $11 billion. Berkshire has developed specific industry experience in several areas including retailing, consumer...
, Golden Gate Capital, and Madison Dearborn Partners.
External links
- Pegasus Capital Advisors LP (company website)