Cerberus Capital Management

Guarding the gates

Cerberus Capital Management is a leading private equity firm which has a history of keeping its investments and its business hidden from the public eye.  The firm was formed in 1992 by Steven A. Feinberg, a Princeton graduate, who stays under the radar as much as possible.  This shunning of publicity may come from bad memories with a former employer; Feinberg's first experiences in business were at investment bank Drexel Burnham Lambert, a company that was dissolved due to securities fraud.  Perhaps Feinberg's colored past can account for the derivations of the name of his company as well.  Cerberus was named after the three-headed dog that guards the gates of hell in Greek mythology.  The company is based in New York and has offices in Atlanta, Chicago, Los Angeles, London, Baarn (Netherlands), Frankfurt, Tokyo, Osaka and Taipei.

Despite its low-key public exterior, Cerberus has made a number of high-profile deals in the past few years, most notably its purchase of automotive manufacturer Chrysler from Daimler in 2007.  Cerberus has a large portfolio with holdings in the following industries: aerospace and defense, apparel, automotive and industrial, building products, commercial services, consumer and retail, financial services, health care, manufacturing and distribution, paper, packaging and printing, technology and telecommunications, transportation, and travel and leisure.  Notable companies owned by Cerberus include Aozora Bank, BlueLinx, GMAC Financial Services, North American Bus Industries, Peguform Group, Spyglass Entertainment and Tower Automotive.

Top dogs

Though not quite as notorious as The Carlyle Group for its government connections, Cerberus has a few top ranking political figures on its roster of employees.  The most prominent example is its current Chairman John W. Snow, who once served as U.S. Secretary of the Treasury under the George W. Bush administration.  Cerberus also has ties to former Vice President Dan Quayle.  Quayle currently serves as chairman of global investments for the firm.

The tragic Chrysler venture

Cerberus had high hopes when it purchased 80.1 percent of Chrysler automotive from its German owner, Daimler-Benz in May 2007.  The private equity firm paid about $7.1 billion for Chrysler and was reported to take an extreme sense of pride at reviving the American tradition of car manufacturing.  Unfortunately, the immediate future for the auto industry was not particularly bright.  With rising gas prices and a strapped economy, in spring 2009, Chrysler announced Chapter 11 bankruptcy.  In June 2009, the U.S. bankruptcy court ruled that all Chrysler's assets be sold to the group of Italian carmaker Fiat.

Dog days

Cerberus' loss of Chrysler and GMAC led its investors to think twice about their stakes at the private equity firm.  From a once-prestigious hedge fund, it now has experienced massive capital slump.  It was reported that 77 percent of Cerberus' hedge fund assets have been withdrawn by its clients since the first quarter of 2009.  According to The Wall Street Journal, Cerberus restructured some policies, hoping to persuade its clients to move their assets to a new fund within the firm and at the same time give the investors an option to leave the fund.



Cerberus Capital Management


299 Park Avenue
New York, NY 10171
Phone: (212) 891-2100
Fax: (212) 891-1540
www.cerberuscapital.com

STATS


  • Employer Type: Private
  • CEO: Stephen Feinberg

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