David Faber reports that the firm has informed investors that it is suspending year end redemptions for up to one year. Apparently the letter writers took the much favoured ‘markets are wrong’ approach, which is excellent.
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- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
Investor 37:
“Note to self. Read fund OM documents COMPLETELY next time…”
LMAO. Damn. that sucks for them…
And the 3 heads of Cerberus exploded…
Actually they exploded when they decided to go after Chrysler operations. Can anyone explain that genius move?
@2 – couldn’t agree more. Can’t explain it – as I’ve said from the day they did it.
I wasn’t sure if Cerberus was making a bet on universal healthcare or if they saw some kind of tax dodge or if they thought they could put lipstick on it and sell it off piecemeal as pork chops.
Anyone know what the ‘edge’ was? Or was it just hubris?
I have seen intelligent people do stupid things. It is an astonding to see it. You cannot stop them. They will not listen to reason. It is very simple. Greed blinds them. Greed baby, Greed.
….they thought if Wilbur (Ross) could make money in the down and out old economy industrial companies that they could do it too….I guess they forgot during due diligence that making autos in the US is a zero sum game – cars made by a pension fund make for very little return, even less so on a rsk adjusted basis.
Three heads are not better then one.
….they thought if Wilbur (Ross) could make money in the down and out old economy industrial companies that they could do it too….I guess they forgot during due diligence that making autos in the US is a zero sum game – cars made by a pension fund make for very little return, even less so on a rsk adjusted basis.
Three heads are not better than one.
chrysler was genius compared to GMAC.
yeah not sure what feinberg & co. were thinking on these deals. Trying to make them sound intelligent is like spraying perfume on a pig.
yeah not sure what feinberg & co. were thinking on these deals. Trying to make them sound intelligent is like spraying perfume on a pig.
@8/9 Wouldn’t that be trying to make them smell intelligent?
The thing about it that really gets me is that they own Burlington. So they own a tier 1 supplier that figured out being dependent on big 3 spelled doom and basically only focuses on the Yuros and Japs, but they wade in to that very same morass
heh. I said “more ass”
2/3/5
They thought they could manage the unions better than previous owners. Pure, uncut hubris, stupidity and piss poor timing.
Better question is what is their exit strategy? In the event that they miraculously escape BK, how long is F.berg going to have to hold on to this dog to make it profitable?
@10– No. It wouldn’t.
How long before some pissed off investor shows up at the offices of one of these hedge funds and starts spraying lead…
14 – Forever? Super-rich people don’t really work at the p.off, you know.
I love reading all of your comments about Cerberus being stupid with the Chrysler investment. Really? You knew it all along? Let us now read your detailed analysis of the situation. Please, enlighten us with your wisdom. You probably knew about Madoff all along, too. Jackasses.
#16 – no need to be angry, its Christmas. The best way to spread holiday cheer is to sing a song for all to hear. Turn that frown around!
actually the investment thesis was quite simple.
this business has/had to make one box-office car before the shutters come down. cerberus’ $1.5bn would be nicely covered, given it’s a $60bn revenue company with a ridiculous set of costs that are based around an equally ridiculous agreement with unions, it wasn’t so stupid at the time.
p.s. cerberus’ actual exposure to this business is small. they passed a large amount out of the back door immediately.
Did anyone see that picture of Feinberg? The man looks like a ladies shoe salesmen. He should have looked in the mirror and realized the UAW was going to eat him alive.
@18:
Its always stupid at the time, you just don’t know it yet. Or to put it another way its impossible to distinguish the stupid from the non-stupid. But the main point being is Cerberus deployed way too much capital in a bull market, they’re a distressed shop and they should have waited for some distress. Now instead being a vulture, the vultures are circling over their head. If those bastard weren’t so arrogant, maybe you’d shed a tear. But no. Read their October letter to investors and you’ll see they were yet to pull their heads out of their asses a year on.
Really Steve? The market is irrationally valuating GE, it couldn’t be that GE Capital is a giant CDO could it?
Feinberg Despised in Wisconsin Where Cerberus Lives Up to Name
http://www.bloomberg.com/apps/news?pid=20601109&sid=alpMxTzKUbbg&refer=home
Steve F looks like John Holmes … right before he died of AIDS!
@22 hahahha, that might be the best post I’ve seen on DB. Imagine meeting him, hello Mr. Holmes… oh sorry, I meant Mr.F.
VOL, 18 here. i agree and fundamentally distressed has no place above mid-market. it’s a painful lesson now being taught. the plans were right but you don’t get the influence you need at that level. cerb thought they had it.
as for cdo’s that’s primarily going to be a legal issue, not financial imo.
if not we are all toast.
here was the genius master plan: Own half of GMAC (check), hmm now how do we get scale in the most profitable part of the auto biz (financing)? Ahhh, hey, I know, look at those dumbass Germans crapping their pants on the big C, let’s get some reall, really stupid banks to “loan” us the loot to do C and C Finance (the real gem!!!
Brilliant!
No way spineless Congressmen will allow the Big C to fail, so we do a prepack bk, after the cramdown, we blow out the “car company” to Joe Sixpack in a “re”-IPO in ’09 and voila! We now get C Finance free, merge it with GMAC finance and “do” that IPO in late ’09 or ’10 at 15x…..laugh all the way to a another big mountain lion hunt.
Piss on the UAW, shmucks from Peoria who can’t even spell DCF!!!
ooops!!
lemondropkid
oop II: we’ll still be in recession in ’10