Technogym
Technogym
Technogym

Interview

Craig Cogut

In 2012, Pegasus Capital Partners bought the Asia-based resort and spa company Six Senses with a view to its global expansion. Three years on, the firm’s founding partner tells Rhianon Howells what they’ve achieved so far and where they go next


At first glance, Pegasus Capital Advisors’ decision to buy Six Senses Hotels Resorts Spas three years ago may have seemed a little surprising. After all, the US-based ­private equity firm didn’t have a track record of investing in spas or hospitality, while the Asia-based development and management company had built its reputation on creating intimate, slightly quirky and highly localised (albeit highly luxurious) experiences of a kind not obviously compatible with the growth expectations of most private equity investors.

You don’t have to delve too deeply, however, to understand what attracted Pegasus to the contract management business – then including 10 Six Senses- or Evason-branded resorts and spas, plus 18 Six Senses Spas in other properties – which it purchased from founders Sonu and Eva Shivadasani and shareholders for an undisclosed sum in April 2012.

Since 1996 Pegasus Capital Advisors, under the steerage of its founding partner, chair and president Craig Cogut, has made its name by specialising in sustainable and, more recently, wellness-related investments. With current assets under management of $1.8bn, the firm actively seeks to partner companies “committed to overcoming global resource scarcity in the fields of health and wellness, sustainable communities, energy and zero waste”.

Meanwhile, Six Senses, which turns 20 this year, has long been a pioneer of sustainable practices in the hospitality industry, as well as one of the first resort brands to put spa and wellness at the heart of its offering.

Add to this Cogut’s experience of investing in hotels with a significant spa presence and the potential for Pegasus to add value – and for Six Senses to deliver it – is clear.

“[We felt] the brand was uniquely positioned but hadn’t been fully fleshed out or grown,” says Cogut, who co-founded Apollo Advisors (now Apollo Global Management) prior to setting up Pegasus. “Our belief was that this was an absolutely tremendous platform.”

In addition to the company’s environmental and wellness credentials, Cogut cites the evocative identity – “you couldn’t ask for a better name” – and the properties themselves as key factors in the decision to buy. “The existing resorts were spectacular. The bones were there, both in terms of architecture and design and in terms of every Six Senses being different and having its own sense of place.”

Combined with steady growth in the luxury travel market and increasing recognition of wellness in the hospitality sector, there was, says Cogut, an opportunity for the Asia-based company to become a global leader. Since then, the firm has further strengthened its spa and wellness portfolio with the acquisition in 2013 of Raison d’Etre Spas, the Stockholm-based spa consultancy and management company.

Three years on from the Six Senses acquisition, how close is Pegasus to realising its goals for its first spa and hospitality investment? And as a fund manager whose obligation is to its investors, what’s its next move?

Global growth
Unlike some private equity firms, Pegasus focuses on “long-term business building and working with management teams to create something of fundamental value, rather than just to play with the markets,” says Cogut.

With Six Senses, the first crucial step was getting the right people. Starting with Wolf Hengst, former president of Four Seasons, as new executive chair, a dream team was recruited: Neil Jacobs, former president of Starwood Capital Hotels and senior vice president for Four Seasons in Asia, as CEO; Bernard Bohnenberger, previously the group’s managing director, as president; and Anna Bjurstam, former owner and CEO of Raison d’Etre Spas, as vice president of Six Senses Spas (now managing partner of Raison d’Etre, Bjurstam divides her time between both businesses).

“We brought in a world-class management team to enable growth,” says Cogut. “Neil’s a visionary. The people he’s brought in, and some people we had before, are superb.”

The next priority was the backlog of projects and opportunities that had been put on hold during the takeover. Now, with the decks cleared, the focus is firmly on refining the product and global expansion.“Clearly part of our investment thesis was to expand: Africa, South America, and selectively in North America and Europe. We’re starting to do that,” says Cogut.

According to Cogut, Six Senses has “a very, very big development pipeline,” and while there’s a lot he can’t talk about, there are 15 resort openings confirmed for the next three years, including five in Bhutan, three in China and one each in Bali, Taiwan, France, Portugal, the Seychelles (its first African resort), Tunisia and St Lucia. There are also seven spas in other properties: one each in Oman, Qatar, Greece, Spain and the US, and two in India.

Which is Cogut most excited about? “I’m excited about everything we’re doing,” he says, although he namechecks two resorts due to open this year: the Douro Valley in Portugal’s wine region, which has “both history and natural beauty”, and the Seychelles, an island property that’s “going to be absolutely spectacular. About three-quarters of the island won’t be developed but will be available for hiking. It should be a national park.”

Design vision
In such pristine settings, getting the architecture and design right is crucial, says Cogut. In an interview with CLADmag’s sister magazine, Spa Business, Neil Jacobs said the Six Senses design philosophy would evolve “to lose a bit of the Robinson Crusoe feel and add some modernity.” Cogut confirms this, but stresses the change will be a subtle shift of emphasis in select properties rather than a complete overhaul.

“We appeal to customers of various ages, but compared to some other luxury brands, [our customer base is] more cutting-edge and younger-feeling, and [a more modern] aesthetic is relevant to that group,” Cogut says. “One of the wonderful things about Six Senses is there’s not a lot of bricks and mortar. There are some [hotel] brands that like a lot of concrete. Six Senses isn’t about that, our resorts have a low footprint and we’re not changing that at all – or how we harmonise with the environment.”

When it comes to creating the design vision and hiring architects, Cogut says Pegasus plays no direct role, instead placing complete trust in the judgement of his team: Jacobs and Bjurstam, on the spa side, along with Andrew Best, the group’s vice president of architecture and technical services, and Omar Romero, vice president of development.

An exception to this hands-off policy is in the area of sustainability. In addition to appointing experienced environmental architect Amber Marie Beard to the newly created role of vice president of sustainability and putting together a high-profile advisory board, Pegasus draws broadly on its many other eco-focused investments – from waste management and energy to lighting and air-conditioning companies – to bring ideas, knowledge and expertise to the table. This takes Six Senses’ commitment to sustainability, which is already central to its philosophy, to another level. But what does the fund manager hope to gain?

“I obviously believe, since we invest in it, there are economic benefits,” says Cogut. “But sometimes you can’t measure just on narrow economics. There are long-term benefits to doing things properly which often corporations don’t focus on.”

New directions
In addition to expanding geographically, another growth strategy under consideration is the development of Six Senses hotels in urban locations, both to help build the brand and to cater for the needs of its city-dwelling and visiting customers. “Urban retreats are hard to find,” he says. “There’s a segment of guests who’d welcome that. It’s incredibly appealing in the world we live in, where we’re so disconnected from nature – from our sixth sense.”

It’s not something they will be rushing into, however. “It’s on the cards, but these things take time. Finding the right sites and the right partners is important,” Cogut says.

The company is also considering investing in Six Senses-branded real estate. “We’re looking at owning or investing in certain properties through a number of structures,” he says.

A more immediate focus for the company, however, is on refining and expanding its spa and wellness offering under Jacobs and Bjurstam’s leadership. “We’re trying to aggressively position the spa business to offer many new services, taking advantage of science and knowledge on the wellness side.”

In certain areas, such as sleep health and digestive disorders, Pegasus helps directly by contributing ideas and expertise from its other wellness-related companies – such as the Lighting Science Group, a company developing LED lighting to aid sleep and improve health, or PanTheryx, a medical nutrition company specialising in intestinal problems.

Alongside Six Senses, Pegasus is expanding and adding value to Raison d’Etre Spas, particularly its educational platform (the company runs online spa management programmes) and its LivNordic brand, which combines Scandinavian design, fitness, bathing, treatments and products in a single concept.

“The interest in nordic wellness and the LivNordic brand has been incredible,” he says. “In addition to the original LivNordic spa in Stockholm, we’ve entered the cruise industry with a LivNordic Spa on the Viking Star and two cruise ship spas planned for next year, plus another five on land.”

For now, Pegasus has no plans to acquire more spa or hospitality businesses – “Six Senses and Raison d’Etre are our focus and our vehicles” – nor is it letting go of the investments any time soon. “We’re in no hurry to sell because there’s tremendous value creation happening. There’s a lot to do to build out both brands. We’re a fund and have to sell for our investors, but certainly not in the short term.”

Such is Cogut’s enthusiasm for Six Senses, in particular, you get the impression that when the time does come to sell it will be with some regret. “I love Six Senses,” he admits. “I vacation there, and it’s because my family and I love what they do – whether it’s the spas, the wellness programmes, the beauty of the setting or the sense of place.”

Lighting Science

Lighting Science Group is a Pegasus portfolio company developing energy-efficient LED lighting that addresses important environmental and health concerns, with products specifically designed to support natural melatonin production, improve sleep, boost alertness, accelerate plant growth and protect wildlife.

Using patented technology, the company has created a groundbreaking range of LED bulbs and lamps that eliminate wavelengths of light proven by decades of medical research to disrupt circadian rhythms in humans, animals and plants.

Products on offer in the health- and wellness-related Rhythm Series include Good Night, which uses spectrum-filtering technology to greatly reduce melatonin-suppressing blue light, and Awake & Alert, which emits a blue-enriched white light aimed at increasing energy and alertness. Other company products serve environmental functions, such as MyNature Grow, which uses purple or ‘true white’ light to promote healthy plant growth; and MyNature Coastal, which offers beachfront lighting for resorts and homes that is less disruptive to wildlife.

Resort operators already making use of the technology include Miraval Resort & Spa in the US, which has installed Good Night lamps in 116 guest rooms; and, of course, Six Senses, which features Good Night lamps in all of its guest rooms and spas, and Awake & Alert lamps in its gyms and exercise rooms. www.lsgc.com

Gallery
Click on an image to open the image gallery
company profile
Company profile: Art of Cryo
Art of Cryo is a new division of a renowned family business with 30 years’ experience in ultra-low temperature equipment. A 28-year old legacy of building the best quality solutions for whole-body cryotherapy is the foundation to offer our high performance cryo chambers - The Art of Cryo Vaultz®.
Try cladmag for free!
Sign up with CLAD to receive our regular ezine, instant news alerts, free digital subscriptions to CLADweek, CLADmag and CLADbook and to request a free sample of the next issue of CLADmag.
sign up
features
Houston’s Memorial Park is being restored following hurricane damage
Thomas Woltz
"I am very proud of stewarding the largest public space to be built in Manhattan in a century"

The Wall Street Journal’s Design Innovator of the Year on designing the gardens at Hudson Yards and looking to the Native Americans for ideas on how to create a resilient future

Francis graduated as a landscape architect in Belgium. He returned to Lebanon in 1993
"I believe gardens are where the soul rests"

With a focus on desert landscapes and collaborations with Zaha Hadid and OMA, the principal of Francis Landscapes has a deep belief in the power of nature

Catalogue Gallery
Click on a catalogue to view it online
To advertise in our catalogue gallery: call +44(0)1462 431385
features
BIG associate Jeremy Siegel is leading the BIG U project in New York
"Funding woes and murky timelines are common problems. It can be easier to make a difference one small project at a time"

From parks designed to mitigate the effects of flooding to warming huts for one of the world’s coldest cities, these projects have been designed for increasingly extreme climates

The Electric Lemon restaurant features glamorous interiors by Rockwell Group
"Further hotels have been confirmed for Los Angeles, Santa Clara, CA, Seattle, Chicago and Houston"

Rockwell Group and Joyce Wang on the inspirations behind the guest rooms, public spaces, spa and gym at Equinox Hotel Hudson Yards

Cargo nets
Alan Metcalfe
"When people are a bit scared, they gather together"

Featuring a vibrating glass platform and one of the US’s longest tree canopy walks, Whiting Forest has been designed to bring visitors closer to nature and to one another

features
"The cities where you have good cultural buildings and facilities – it’s a way for people to mix, to share the city in a much deeper way"

The French architect and winner of the 2017 European Prize for Architecture tells us why she is determined to surprise

Norman Foster and his team were responsible for the architecture and interior design
Dana Kalczak
"If we had focused entirely on high tech in the hotel, the artistry we normally strive for would have been compromised"

Four Seasons’ vice president of design speaks to CLAD about working with Norman Foster and creating magical moments

The award-winning mixed use Santana Row project in San Jose, California
Scott Lee became president of SB Architects in 2000. Tracy Lee founded TLee Spas in 2015
"We design to connect the guest to the place, positioning people at the centre of the design"

Architect Scott Lee and spa consultant Tracey Lee on marrying the worlds of design and wellness in a series of interesting projects

cladkit product news
Cosm unveils Experience Centre with ‘one of a kind’ LED dome
The new Experience Centre houses a 20m LED dome
Magali Robathan
Cosm, a global technology company that builds end-to-end solutions for immersive experiences, has unveiled its Experience Centre which houses a ...
Diamond balloon concept merges tourist attraction with advertising billboard
Magali Robathan
A group of Dutch engineers have presented a new attractions concept that combines a flying observation cabin with LED digital ...
Eden project uses drones to spell out climate change warning
Magali Robathan
Almost 300 drones were used to signal an environmental message above the Eden Project’s biomes, during the UN Climate Change ...
cladkit product news
Jaffe Holden helps bring Academy Museum of Motion Pictures alive
Jaffe Holden provided architectural acoustics for the Academy Museum
Magali Robathan
Acoustical consulting firm Jaffe Holden provided architectural acoustics and audio/video design services for the recently opened Academy Museum of Motion ...
Codelocks develops new glass door smart lock
The new lock model allows facilities and building managers to create and manage access via an app or online portal
Megan Whitby
Codelocks has launched its first glass door smart lock to bring intelligent access control to modern spa, leisure, fitness and ...
Fabio Alemanno Design uses elegant semi-precious stones to create memorable spa experiences
Alemanno believes the stones are well-placed in the spa environment thanks to their capacity to positively support physical and mental health
Megan Whitby
Fabio Alemanno Design has expanded its collection with semi-precious stones to enhance spas, wellness facilities, hotels and private residences. The ...
cladkit product news
Alberto Apostoli designs tech-forward Wellness Therapy furniture collection for Varaschin
The furniture collection draws on absolute geometries, pure lines, neutral colours and strong references to nature
Megan Whitby
Furniture manufacturer Varaschin has unveiled the new Wellness Therapy range, designed by Italian spa and wellness architect and designer Alberto ...
Alberto Apostoli and Newform collaborate to launch the A.Zeta showerhead
The showerhead offers two modes; rainfall or waterfall
Megan Whitby
Italian architect Alberto Apostoli has renewed his partnership with Newform – an Italian wellness company – and designed A.Zeta. A.Zeta ...
Móz Designs columns anchor the world’s largest indoor aquarium
The design of the columns was inspired by the sea
Magali Robathan
After a two-year renovation, Oakland-based metal experts Móz Designs have unveiled their inclusion in Georgia Aquarium’s new shark gallery. Located ...
Technogym
Technogym