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Investors Ditch Once Lofty Cerberus Fund

Failed investments in Chrysler, GMAC have clients pulling $5.5B

By Harry Kimball, Newser Staff

Posted Aug 29, 2009 3:48 PM CDT

(Newser) – Hedge-fund investors are leaving once-vaunted investment firm Cerberus Capital Management in droves, the Wall Street Journal reports. The firm, whose acquisitions of Chrysler and GMAC turned disastrous, is seeing $5.5 billion in capital—or 71% of its hedge fund assets—walk out the door. "We have been surprised by this response," says CEO Stephen Feinberg.

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Chrysler vehicles on display at a Chrysler dealership. (AP Photo)

Cerberus Capital Management LP Chairman John Snow in 2007. (AP Photo)

Stephen Feinberg, Cerberus chief. (AP Photo)

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In our view, given the current general illiquidity in the distressed markets, it would be practically impossible for a distressed investment fund to provide quarterly liquidity for 100% of its capital. - Cerberus letter to investors

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Investors Ditch Once Lofty Cerberus Fund