Pegasus closes fourth fund on $750m

The US middle market firm recently closed its fourth special situations fund; its strategy has an emphasis on companies with ‘renewable business models’.

Pegasus Capital Advisors has closed its fourth fund on its $750 million (€509 million) hard cap.

The fund was marketed for roughly 12 months by The Blackstone Group-affiliated Park Hill Group and attracted a mix of returning and new investors including pension funds, endowments, fund of funds and family offices. Akin Gump Strauss Hauer & Feld served as legal counsel.

Like Pegasus’ predecessor funds, the vehicle will target special situations in the middle market, making control-oriented investments “almost invariably in private securities and private companies”, said Stefanie Langer, director of investor relations and business development.

She said the fund’s investment period will be roughly five years, and that it will make typical investments of $20 million to $75 million, “and that assumes that even deals on the smaller end may be staged in terms of the way the capital is invested”.

Different from previous funds, Langer added, is that Fund IV is “looking at businesses that have positive attributes with respect to renewable business models”. That doesn’t necessarily mean the target company will be in the renewable energy sector, but has a focus on sustainability, she said.

Fund IV has already invested in six companies: Hi-Tech Solutions, a developer of Optical Character Recognition computer vision systems; lighting company LED Holdings; Rontal Engineering Applications, a provider of incident management solutions to the security and defence sectors; home construction products firm Sensibuilt Building Solutions; architectural cast stone producer Stone Profiles; and T&M Protection Resources, a security services provider in New York.

Pegasus’ previous fund held a third and final close on $316 million in June 2004, though Langer noted it was “more of an annex fund in terms of the amount raised” and its two-year investment period. Limited partners for that fund included the Colorado Public Employees’ Retirement System.

Pegasus was established in 1995 and manages more $1.8 billion in capital.