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77. Cerberus Capital Management / $8.67 billion
Location:
New York, NY
Founded:
1992
2016 Hedge Fund 100 Rank:
No. 72
2016 Capital:
$9.48 billion
2015 Hedge Fund 100 Rank:
No. 64
2015 Capital:
$10.16 billion
Years on List:
16
Website:
Address:
875 Third Avenue
New York, NY 10022
Phone:
212-891-2100
Fax:
646-885-3451
Other Offices:
Chicago, Los Angeles, London, The Netherlands, Frankfurt, Madrid, Beijing and Tokyo
Profile & News
Firm Overview
In 2012, distressed-focused Cerberus Capital Management oversaw a major merger deal between satellite imaging company GeoEye, of which Cerberus was the largest stakeholder, and DigitalGlobe, the sole provider of commercial satellite and geospatial technology services for several U.S. government agencies. The deal saved GeoEye from certain death and, Cerberus founders Stephen Feinberg and William Richter hope, will revive the fortunes of the firm’s hedge funds. Assets in Cerberus’s hedge fund division have fallen by 38 percent since assets peaked in 2008 at $16.4 billion.
The firm cannot seem to reverse its luck. On top of sweeping losses resulting from the financial crisis, Cerberus lost its investors millions of dollars in 2009, when its two-year attempt to privatize and revive ailing automaker Chrysler failed (Cerberus kept details of the losses secret from the press, but it is known that Cerberus had bought an 80 percent stake in Chrysler worth $700 million in 2007). Chrysler filed for bankruptcy in April of that year, and Cerberus’s capital dropped 29 percent by year-end, primarily from investor redemptions.
Cerberus has managed to maintain its spot among the 100 largest hedge fund firms in the world for the past 14 years, and the hedge fund–private equity hybrid has managed to impress its investor clients. The New York–based manager earned a B grade on Alpha‘s 2015 Hedge Fund Report Card, after landing dead last overall 2014 and receiving an F in six of the eight categories. Despite its troubles, investors praise the firm for its portfolio transparency.
Cerberus has a skilled and famous executive team working to match its current returns with those of its heyday. Former U.S. vice president J. Danforth Quayle serves as the chairman of Cerberus Global Investments, and former U.S. secretary of the Treasury John Snow serves as Cerberus Capital Management’s chairman. Co-founder Feinberg was a trader at Gruntal & Co. before launching Cerberus in 1992 alongside financier Richter. They named the firm, which manages both private equity and hedge funds, for the three-headed dog that guards the gates of Hades.
Cerberus launched 15 funds between 2013 and 2014, and Cerberus Sub-Advisory I, a sub-adviser to a mutual fund.
Strategy
The distressed-focused firm manages four core strategies in private equity and hedge funds: distressed securities and assets, distressed private equity, corporate middle-market lending and real estate–related investments. Investments may be passive, active or control investments.
Funds and Fees Overview
Cerberus launched 15 funds between 2013 and 2014.
| Fees for Hedge Funds | ||
| Management Fee | 1 percent to 2 percent of net assets per annum | Paid quarterly in advance |
| Performance Fee | 20 percent of net gain subject to a high-water mark | |
| Certain funds provide 6 percent to 8 percent preferred return to investors with a catch-up allocation of 2 percent to 15 percent | ||
| Fees for Private Equity Funds | ||
| Management Fee | 1 percent to 1.5 percent of commitments or total assets per annum | Paid quarterly in advance |
| Performance Fee | 20 percent of net gain subject to a high-water mark | |
| Certain funds provide 6 percent to 8 percent preferred return to investors with catch-up distribution of 100 percent or 60 percent of next proceeds | ||
| Fees for Cerberus SPV and CI SPV | ||
| Management Fee | 0.125 percent of net assets per quarter | Paid quarterly in advance |
| Fees for Single-Investment Special-Purpose Investment Vehicles | ||
| Management Fee | 1 percent of net assets per annum | Paid quarterly in advance |
| Carried Interest | 20 percent after receiving return of capital and a 10 percent preferred return | |
Clients
Cerberus manages U.S. and non-U.S. limited partnerships, U.S. limited liability companies, non-U.S. corporations, single-investment special-purpose investment vehicles and a managed account for a range of investors, including corporations, high-net-worth individuals, sovereign wealth funds, pension funds and endowment funds, among others.
| Regulatory Assets Under Management (RAUM)* | |||
| Discretionary | $44.42 billion (72 accounts) | ||
| Nondiscretionary | $0 (0 accounts) | ||
| Total | $44.42 billion (72 accounts) | ||
| Employees | 448 | ||
| Clients | 72 total | 36 percent non-U.S. | |
| Fiscal Year Ends | December | ||
| All data as of December 31, 2014. *Regulatory Assets Under Management (RAUM) includes no deduction of offsetting liabilities, thus representing gross AUM, not net AUM. RAUM calculations include leverage, proprietary assets and uncalled capital commitments, among other items not required in the calculation of AUM. | |||
Owners and Executives
| Name | Position | Position Held Since |
| Stephen Feinberg | Co-Founder, Senior Managing Director, CEO | 11/1992 |
| William Richter | Co-Founder, Senior Managing Director | 11/1992 |
| Seth Plattus | Senior Managing Director, Chief Administrative Officer, Co-General Counsel | 01/1994 |
| Jeffrey Lomasky | Senior Managing Director, CFO | 08/1994 |
| Kevin Genda | Senior Managing Director, Chair of U.S. Lending Business | 08/1995 |
| Mark Neporent | Senior Managing Director, COO, General Counsel | 03/1998 |
| J. Danforth Quayle | Senior Managing Director; Chairman, Cerberus Global Investments | 01/1999 |
| John Snow | Chairman, Senior Managing Director | 01/2007 |
| Andrew Kandel | Managing Director, CCO, Co-General Counsel | 03/2007 |
| Lenard Tessler | Senior Managing Director, Co-Head of Global Private Equity | 01/2011 |
| Frank Bruno | Senior Managing Director; President, Cerberus Global Investments | 01/2011 |
| Robert Davenport | Senior Managing Director, Head of Corporate Distressed | 01/2011 |
| W. Brett Ingersoll | Senior Managing Director, Co-Head of Global Private Equity | 01/2011 |
| Ronald Kravit | Senior Managing Director, Head of Real Estate Investing | 01/2011 |
| Steven Mayer | Senior Managing Director, Co-Head of Global Private Equity | 01/2011 |
| Lee Millstein | Senior Managing Director, Head of European and Asian Distressed/Real Estate | 01/2011 |
| Daniel Wolf | Senior Managing Director, President and CCO of U.S. Lending Business | 01/2011 |
| Eric Miller | Senior Managing Director, Lending | 01/2011 |
Financial Detail
Firm Capital ($million) 2012–2014
Hedge Fund 100 Ranking 2002–2014
Related Articles
- SEC Form ADV Brochure Cerberus Capital Management
- The 2015 Hedge Fund Report Card, February 18, 2015
- Say What!? Crispin Odey’s New Foul Play, Bitcoin’s Risky Game, December 13, 2013
- Cerberus Bites at Europe, by Craig Karmin, Wall Street Journal, October 08, 2013
- Seibu Pushes Aside Cerberus’s Call for New Directors, by Hiroko Tabuchi, DealBook, New York Times, June 25, 2013
- Cerberus Owner Might Buy Its Gun-Making Group, by Peter Lattman, New York Times, April 18, 2013
- Cerberus Bet Hits Escape Velocity via GeoEye Merger, by Pete Gallo, September 04, 2012
- Cerberus Is Back in the Fund Raising Market, by Stephen Taub, April 01, 2011
- Cerberus Launches Mortgage-Backed Fund (Magazine Version), by Lawrence Delevingne, March 02, 2011
- Cerberus Takes Beating in Chrysler Collapse, May 20, 2009
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