Douglas W.

Positive Review

I've been an investor with Pelorus since June 2020. Total invested capital of $445,000, roughly $217,000 in distributions received to date, for approximately a 48% return on capital so far — and I'm still in the fund. That number alone doesn't tell the real story, though. The cannabis sector went through real stress over the past several years — regulatory whiplash, capital markets drying up, operators failing. A lot of sponsors in this space took on too much leverage or kept distributing capital they didn't actually have. Pelorus didn't. They never came back to investors with a capital call, and they protected principal even when it meant making an unpopular decision: suspending redemptions and distributions for a period. I won't pretend that was fun to sit through, and I understand why it looked bad from the outside. But it was the right call. A manager who prioritizes protecting the fund's capital base over short-term optics is a manager who's thinking about my money the right way. What impressed me even more is what came out of that period. Through cross-collateral positions, Pelorus ended up acquiring several operating businesses out of distressed situations. Rather than fire-sale those assets, they spun them into a separate equity vehicle that today sits net positive on unrealized gains. One of those positions — a formerly publicly traded, vertically integrated California operator — has been turned around into a business generating over $100 million in top-line revenue and running EBITDA positive. That's not a small feat in this sector, and it's the kind of workout that most sponsors don't have the operating expertise or discipline to pull off. Here's my honest takeaway after six years: every manager looks good when markets cooperate. You find out who you're actually invested with when things get hard. Pelorus got tested by a brutal cycle in a uniquely difficult sector, and instead of protecting themselves, they protected their investors' principal, communicated honestly along the way, and turned a distressed situation into real recovered value. That's exactly what I want from a manager, and it's why I'm still invested. — Doug Wilson