DG CAPITAL MANAGEMENT, LLC

Thesis

DG Capital Management, LLC is a value-based investment firm focused on the middle market, particularly in distressed securities, reorganized equity, and special situations. Their strategy involves a rigorous, research-driven approach to identify complex and overlooked opportunities in companies undergoing significant transformations like restructurings or spin-offs. The firm seeks to achieve strong long-term, risk-adjusted returns by investing in securities trading at a substantial discount to their intrinsic value, generally within middle-market companies with an enterprise value under $2 billion. While their primary focus is distressed and special situations, they trade a wide variety of domestic and foreign securities, with an emphasis on publicly traded credit and equity, and may invest in private securities. Their objective is to generate returns independent of broader market fundamentals, focusing on capital appreciation and income while preserving capital through diversification and hedging. The strategy can be long-biased, market-neutral, or involve significant cash holdings, utilizing derivatives for hedging. As of December 31, 2025, the firm managed approximately $521.9 million in client assets, primarily serving pooled investment vehicles like hedge funds (97% of focus by gross asset value).

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