Cerberus on the Ropes

NYT: Cerberus Investors Seek to Pull $5.5 Billion

About 71 percent of the investors in the two Cerberus Partners funds
want their assets moved into a new vehicle that will be liquidated as
market conditions improve, Stephen A. Feinberg,
who runs Cerberus, wrote in a letter to clients delivered late
Thursday. The withdrawals would leave about $2.2 billion of assets in
the funds.

And my favorite quote:

“We have been surprised by this response,” Mr. Feinberg and his
co-founder, William L. Richter, wrote in the letter, which was first
reported by The Wall Street Journal on Friday. A spokesman for
Cerberus, which oversees about $24 billion in assets, declined to
comment.

While Mr. Feinberg said most of the firm’s clients continued to support
the investment strategy, the mass exodus of investors is another black
eye for the firm. The firm, which prefers to operate out of the public
eye, has suffered from several prominent investments — most notably its
investment in Chrysler — that left the funds down 24.5 percent last year.

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