Friday, July 10, 2009
Three Headed Dawg
WSJ report via CNBC summary:
Cerberus Capital Management is still declining to let investors out of its main hedge fund, according to the Wall Street Journal.
In a letter to clients reviewed by the Journal, Cerberus chairman Stephen Feinberg said the firm is revamping investor terms on its main hedge fund.
The letter cites weak market conditions that are still preventing Cerberus from giving clients their money back. Cerberus also says significant macro risks may affect future results. The letter also notes that the firm has had difficulty selling existing positions.
Cerberus says it has created a special vehicle to let some investors cash out over time.
In December of last year, Cerberus suspended withdrawal requests, joining a group of hedge funds that had halted redemptions. Feinberg also said in the letter that Cerberus plans on avoiding headline-grabbing deals like its ill-fated investments in automaker Chrysler and lender GMAC.
"...the firm is revamping investor terms..." Got that? Changing the terms unilaterally. S'okay we are all now so used to this it barely merits mentioning. The real problem is these people are in the markets with two sets of books. THey admit their assets aren't worth what they'd fetch in the markets but won't adjust their books accordingly. Obviously this isn't just Cerberus which means pretty much everyone in the markets is playing with fantasy trades.