erseus makes control equity investments in middle market companies that offer opportunities for value creation and enhancement.  Middle market growth equity investing has been the core investment focus of Perseus since inception, supplemented by occasional opportunistic leveraged buyouts when supported by appropriate market conditions.

The Perseus investment strategy is atypical among middle market private equity firms, beginning with the manner in which investment opportunities are sourced, and continuing through the value enhancement and realization stages. Perseus sources investment opportunities through its vast network of relationships and contacts, rarely competing in the traditional investment banking auctions prevalent in the middle market. Perseus combines its industry expertise and sector knowledge with the firm's understanding of macroeconomic trends and insight into restructuring possibilities to assess each opportunity. When the firm determines to make an investment, it generally obtains control, or at a minimum, strong negative control rights. Perseus then teams with strong management to create and enhance value.  Perseus frequently invests in an initial entity as a platform for a consolidation strategy, thereby permitting follow-on strategic investments.

The firm's investment activities are led by Frank H. Pearl and Kenneth M. Socha. The firm’s senior executive team also includes John C. Fox, Sheryl Schwartz, John M. Glazer, Michael L. Miller and Christian Staby. Collectively, they have more than 125 years of private equity experience. The senior executives have the background, the investment expertise, and the personal networks necessary to execute successfully on the firm's investment strategy.

Perseus typically seeks one or more of the following characteristics in the companies in which it invests:  

(i) New economy companies;
(ii) Industries in which Perseus has particular expertise;
(iii) Potential to be restructured successfully around sound fundamentals;
(iv) Performing below industry benchmarks or offering untapped operating potential; and
(v) Potential to serve as a platform for further acquisitions.

As a disciplined private equity investor, Perseus adheres to the guiding principles set forth below:

(i) Obtain control or negative control in nearly all transactions;
(ii) Avoid using leverage that can put a financial strain on growing companies;
(iii) Invest in businesses that have minimal technology risk and identifiable capital requirements;
(iv) Avoid making venture investments (i.e., companies with unproven technologies or companies that require a long pathway to value creation);
(v) Exercise prudence in maintaining investment reserves (be financially prepared for unexpected developments, which frequently arise);
(vi) Assure that a strong management team is in place; and
(vii) Focus on value creation rather than on financial engineering.

Growth Equity Investing

Perseus has a long and successful history investing growth equity capital in a variety of industries. Perseus acquires control positions at attractive valuations in middle market companies in need of growth capital as well as growth stage companies facing operational or financial challenges. Perseus focuses on industries that are likely to experience substantial growth and in which its principals can leverage their particular expertise. Many of the investments Perseus considers involve companies that have never achieved their early promise but still retain significant, though often misunderstood, value. Perseus also focuses on companies where value can be enhanced through reorganizations, further acquisitions, and/or consolidations.    

Perseus believes that a “hands on” approach is critical to the implementation and success of its growth strategies.  As a result, Perseus works alongside management to refine and execute each portfolio company's business plan.  When appropriate, Perseus will identify and recruit new management teams whose past operational, managerial, and transactional successes are transferable to the respective portfolio company. Perseus has the know-how and industry expertise necessary to execute on its strategies and, using its wide network of contacts, can access opportunities not typically available to other private equity firms.  

Perseus' growth equity strategy concentrates primarily on the industries described below:

Energy and Environmental Technologies and Highly Engineered Products. Perseus has been actively investing in energy and environmental technologies and highly engineered products for more than a decade and has made successful investments in such sectors as electrical contractors, distributed generation, solar power, power storage, oil recycling, clean fuels, and grid enhancing technologies. Perseus continues this focus based on the following beliefs: (i) in recent years the investing landscape has changed dramatically, particularly in the closely connected energy and environmental technology sectors; (ii) high oil prices and increasing volatility in petroleum prices are facts of life; (iii) economies across the globe must meet growing energy demands in a manner that is cost effective and minimizes environmental damage; (iv) significant political and economic instability threatens the viability of traditional sources of energy; (v) there is a widely held belief that global warming is occurring and that the prime culprit is increased carbon dioxide emissions attributable to human activity; (vi) clean and less expensive sources of energy and highly engineered products and processes are needed to address environmental and economic concerns; (vii) Perseus believes that all energy sources (wind, solar, oil, natural gas, coal, etc.) have the potential to be part of the solution to the increasing demands for clean energy; and (viii) there are ample opportunities to capitalize on these market drivers without taking commodity risk, such as investing in enabling technologies, services, and related products. The areas of investment interest in this attractive market segment for Perseus include: distributed generation (including solar and wind); alternative fuel-powered transportation, environmental/efficiency technologies and services; alternative and renewable energy production; Smart Grid technologies targeting both demand and supply; advanced efficient building technologies that will serve to reduce energy demand; traditional oil/power/gas enabling technologies; and power storage.

Healthcare.  Perseus has a long history of investing in healthcare businesses.  Perseus' focus in this area has been on segments that had strong growth potential and where Perseus professionals not only had meaningful experience but also extensive industry contacts, including with clinical and academic experts. These sectors included drug development in oncology and infectious disease; specialty pharmaceuticals; pharmaceutical sales and marketing, particularly Internet-enabled alternative channels; and diagnostics and specialty devices.  Perseus has focused on healthcare companies that had a demonstrated growth potential, either in the form of human efficacy and safety data or early commercial results.  

Branded Consumer Products.  Potentially powerful brands were traditionally one of the key attributes sought by Perseus in its investment initiatives.  Not infrequently, prominent brands become devalued or lose significance by virtue of inadequate brand management.  Brand maintenance and development requires skilled and insightful management and an ability to identify and execute growth initiatives. Perseus' expertise has created value in opportunities involving consumer brands through the years.