How you make money
Equity growth
Buy at 3x EBITDA, build scale, exit at 6x
Quality operators in a capital-starved, highly regulated specialty sector trade near 3x EBITDA, versus 8 to 12x for comparable consumer retail. Pelorus acquires them, installs institutional controls, and exits scaled platforms near 6x.
5x
Equity multiple
30%
Projected IRR
24 mo
Redemption
Sale
Exit strategy
How the deal works
A highly regulated specialty sector — about $44B today, projected to reach $76B by 2030 — is served by 15,000+ operators cut off from institutional capital, so quality businesses trade near 3x EBITDA against 8 to 12x for comparable retail. A 2026 federal policy change removed a punitive tax burden, opening a narrowing window. Pelorus acquires operators, lifts margins toward 16%, and exits scaled platforms near 6x.
Operators trade near 3x EBITDA for lack of capital
Federal constraints cut this sector off from institutional lending, forcing quality operators onto high-cost debt. That capital gap prices them near 3x EBITDA, versus 8 to 12x for comparable consumer retail.
Buy, professionalize, and re-rate toward 6x
Pelorus acquires fragmented operators, installs institutional financial controls and centralized procurement, and lifts EBITDA margins from roughly 9% to 16% — then exits a scaled platform near 6x. The spread is the return.
A vertically integrated anchor already in place
The fund's centerpiece is a vertically integrated California platform spanning production, distribution, and 12 retail locations — a top-10 operator in its state, with roughly $111M in projected revenue.
A narrowing window before the sector reprices
A 2026 federal policy change removed a punitive tax burden, with further reform expected. The entry point is historically low; as institutional capital returns, valuations are likely to compress toward mainstream multiples.
About the sponsor
$1B+
capital placed
$2B+
debt structured
100+ yrs
combined team experience
A specialist private credit and equity platform, rated A on secured bonds and BBB+ as a company (Egan-Jones).
Dan Leimel
Chief Executive Officer
Rob Sechrist
President
Tanya Krug
Investor Relations
What you should know
What should I weigh?+
- The sector is federally constrained and subject to shifting regulation; policy changes can help or hurt returns.
- Target returns of 30–35% IRR and 5–8x are projections, not guarantees; acquisitions and exits may underperform.
- The investment is illiquid, with a 2-year lock-up and no public market.
What sector does the fund target?+
A $44B, highly regulated specialty sector that federal policy has long kept off-limits to institutional capital. The specifics are walked through on the investor call.
How is the return generated?+
By acquiring operators near 3x EBITDA, professionalizing them to lift margins, and exiting scaled platforms near 6x. The fund targets a 30–35% gross IRR and a 5–8x+ equity multiple. Targeted, not guaranteed.
What anchors the strategy?+
A vertically integrated California platform already anchors the fund — production, distribution, and 12 retail locations, a top-10 operator in its state with roughly $111M in projected revenue.
What are the terms?+
A Reg D 506(c) fund: $50,000 minimum, accredited investors only, an 8% hurdle, a 20% incentive allocation, and a 2-year lock-up. The vehicle is evergreen with a reinvestment option.
