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.


Mr. Outspoken said...

FIRST I think they should make all management and managers be paid in stock and options only. Then they can freeze cash options for investors.

Mr. Outspoken said...

Second I think it is kind of ironic that a fund called Cerberus let's investors in but won't let them out again. I think I heard the original idea was that was what they did to the companies they acquired.

w said...

Don't worry, these are sophisticated investors who understand the circumstances and are happy to be a part of such a great opportunity.

Sun said...

M2M v1.0 (mark-to-market) has been suspended due to macro conditions. Worry not, a patch and upgrade has been installed to M2M v2.0 (mark-to-myth).

Lost Cause said...

Do any business with a crook of a global scale, and this is what you can expect. Suckers.

Peripheral Visionary said...

Well, I suppose it's a good thing Cerberus are experts on restructuring--they're going to need some of that expertise.