Profiles >> Cerberus Capital Management LP

Cerberus Capital Management LP

Last Updated: 12/3/2020

Cerberus Capital Management LP is a Limited Partnership that started in 1992 and is primarily owned and controlled by Stephen A. Feinberg.

Cerberus takes a long-term investment horizon and places their focus on value cration globally in private equity, real estate and global credit strategies.

Cerberus Capital Management LP operates out of an office in New York, NY. Based on the Form ADV filed on 2020-05-18 00:00:00, the investment firm is comprised of 760 employees, only 204 of whom performs investment advisory functions.

Fact Sheet

      Name: Cerberus Capital Management LP
      CRD No: 152175
      Filing Recorded: 2020-05-18 00:00:00
      Year of Origin: 1992
      Employees: 760
      Clients: 119
      AUM: 61,347,656,023
      Management Fee: 1 to 2 Percent
      Performance Fee: 15 to 20 Percent
      Client Type: Pooled Investment Vehicles
      Assets Traded: Cash and Cash Equivalents, Other


Investment Strategy

According to the brochure submitted to IAPD, Cerberuss investment strategy is as follows:

The Adviser generally pursues, or has pursued, on behalf of its Clients, investments in the following three categories: (i) Private Equity, including acquisitions of companies with operational problems or significant cost reduction opportunities, subsidiaries of companies where the business is viewed as non-core and/or under-performing divisions and companies undergoing reorganization under U.S. bankruptcy law or similar laws; (ii) Real Estate, including investments in distressed debt securities and assets, special situations, direct equity, mortgage loans and bridge financings, mezzanine debt and preferred equity and NPLs; and (iii) Global Credit Opportunities, including direct lending, stressed and distressed corporate debt, and residential and commercial mortgage securities and assets. Investments within these categories may involve any part of the capital structure of an issuer. Investments may be passive or active (including control) investments in a wide range of industries and countries.

Methods of Analysis

In addition, Cerberuss methods of analysis include:

Private Equity. The Advisers will generally target private equity investments where they can implement an operational approach to private equity by driving portfolio investment value through operational and strategic change. Pursuant to this strategy, the Advisers seek to make control equity investments, minority equity investments, structured equity and structured debt investments, asset purchases and platform investments across a broad array of industries where the Advisers believe there is an opportunity to create value through purchase price, organizational and infrastructure improvement, efficiency and productivity gains and platform creation or asset repositioning. The Advisers will make investments where they have identified opportunities or dynamics which enable them to drive near-term value or that they believe are not appreciated by the market, augmented by opportunities for longer-term strategic growth and value creation.

This approach manifests itself in a variety of overlapping ways across; however, investments typically derive value through four core value-creation areas: (i) value-oriented and complex acquisitions; (ii) organizational and infrastructure development; (iii) efficiency and productivity initiatives; and (iv) platform creation opportunities.

Real Estate. The Advisers invest opportunistically in a wide range of investments, primarily falling into five main categories: (i) real estate credit, including debt instruments, NPLs, performing and re-performing loans (“RPL”) (as well as the underlying collateral for such loans) and mortgage backed-securities (“MBS”); (ii) direct equity, including controlling equity interests in direct property investments, joint ventures, corporate real estate holdings, private equity and select development opportunities; (iii) special situations, including public or private real estate investment trusts (“REITs”), secondary limited partnership interests, real estate operating companies constrained by management inefficiencies or lack of liquidity, other operating companies with material real estate or real estate-related investments as well as various other customized structured transactions; (iv) mortgage loans and bridge financings; and (v) mezzanine debt and preferred equity. It is anticipated that a portion of the investments may be in the form of debt or preferred equity that will be relatively senior in the capital structure and often secured.

Global Credit Opportunities. The Advisers, on behalf of certain Clients, invest in NPLs, pools of NPLs and the underlying collateral for such loans. In connection with the NPL investment strategy, the Advisers may also invest in other assets, including, without limitation, performing loans, structured products, real estate owned (“REO”) and other real estate-related assets, and other assets purchased from financial institutions and distressed sellers (including those looking to de-lever their balance sheets or divest of non-core assets). The NPL investment strategy may also involve investments in the public or private debt and equity of operating companies (e.g., loan servicers that specialize in the management, collection and recovery of distressed assets, operating partners, banks, or asset management companies) that the Advisers believe would be beneficial and/or accretive to the NPL investment program, including if such investments may produce additional deal flow, servicing alternatives and/or other market expertise in respect of investments that certain Clients may make (e.g., data on borrowers and geographic trends). Advisers may also invest in banks and other financial institutions and operating companies that have loan books, including, without limitation, in an effort to acquire the underlying assets owned by such company or for other reasons related to the investment strategy. The loans targeted will have varying terms with respect to collateral, relative seniority or subordination, purchase price, convertibility, interest requirements and maturity. Such loans may consist of a large and diverse spectrum of loans, including small to-medium enterprise and other corporate loans, real estate secured loans (including residential, commercial and multi-family loans), loans secured by assets other than real estate (e.g., ships), unsecured loans and consumer loans.

In addition, the Advisers make investments on behalf of Clients in debt of underlying issuers that are, or face the prospect of becoming, financially distressed, are or may become subject to a reorganization or insolvency proceeding, such as, but not limited to, a bankruptcy proceeding, or are or may become engaged in other extraordinary transactions, such as debt restructuring, reorganization and liquidation outside of bankruptcy. Corporate credit investment opportunities are expected to focus primarily on stressed and distressed market opportunities in senior secured bonds and loans in the high-yield bond and leveraged loan markets but may also include a variety of other debt instruments with varying terms with respect to collateral, relative seniority or subordination, purchase price, convertibility, interest rate and maturity (e.g., bonds, debentures and notes, trust certificates and commercial paper and trade claims). Debt investments may be coupled with equity investments or “kickers” and the Advisers may also invest in public and/or privately traded stand-alone equity and equity-related securities of stressed or distressed companies, including preferred stock, convertible preferred stock, common stock and warrants. The Advisers may also invest in debt that they believe is undervalued because of operational inefficiencies or market dislocations, even when the market generally does not view such debt, or its issuer, as distressed.

Furthermore, the Advisers make investments on behalf of Clients in debt and equity securities of MBS (including, without limitation, MBS backed by prime, Alt-A, Alt-B, subprime mortgages and commercial mortgages), asset-backed securities (“ABS”), collateralized debt obligations (“CDOs”), CLOs, synthetic indices, mortgage servicing rights (“MSRs”) and other forms of asset-backed securities and other pools of distressed assets.

In addition, in connection with the residential strategy, the Advisers may purchase U.S. and non-U.S. performing loans, RPLs and NPLs and pools of performing loans, RPLs and NPLs that are consistent with the Advisers’ investment programs. Such loans may include, without limitation, loans secured by residential and commercial properties (which include, without limitation, multifamily properties, land, hotels, offices and condominiums), small-to-largebalance commercial loans and loans related to rental finance and similar businesses.

Top 10 Holdings from Form 13F

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