Cerberus Restructuring Won Some Votes

It sounds like some key investors favored the restructuring plan instituted last year for the main Cerberus Capital hedge fund, even as many customers made it clear they wanted their money back.

The plan gave the manager the right to transfer the assets in Cerberus Partners to a new fund, a special-purpose vehicle, and charge a management fee for this SPV. Reportedly clients asked to withdraw 70% of the fund’s assets  in 2009.   Redemptions had been suspended in 2008.

But a couple of big investors say they decided it was a better bet to stay with the SPV than to redeem at that time. Cerberus’ investments, which included Chrysler and GMAC, looked very bad in the crisis conditions. But these investors say that was a temporary situation and there has been improvement.

Cerberus’s private-equity fund rebounded in 2009, what with US government bailout,  while its hedge fund remained 4% in the red, according to the Economist.

However, the firm’s woes are by no means over.  Today there was a report that NewPage, a coated paper maker Cerberus owns, is “increasingly toxic”. 

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2 Responses to “Cerberus Restructuring Won Some Votes”

  1. Cerberus SPV Makes High Return « HedgeFundSmarts Says:

    […] fees. But there is no exit from the vehicle except as money is freed when the assets are sold.  Some elected to stay invested as others fled.  Regular Cerberus funds and share classes come with a variety of redemption […]

  2. Asked to Vote, Some Walk « HedgeFundSmarts Says:

    […] plan transferred assets in Cerberus Partners to a special-purpose vehicle and allowed a management fee for this SPV. Though many wanted their money back, investors cast their […]

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