Cerberus Capital Management
| Company type | Private partnership |
|---|---|
| Industry | Alternative investment management |
| Founded | 1992 |
| Founder | Steve Feinberg, William L. Richter |
| Headquarters | New York City , United States |
Area served | Global |
Key people | Frank W. Bruno (CEO), Dan Quayle (Chairman of Global Investments), John W. Snow (Chairman of Capital Management), William L. Richter (Senior Managing Director) |
| Products | Credit, private equity, real estate investments |
Number of employees | Over 100 (COAC professionals) |
Cerberus Capital Management, L.P. is a globally operating American alternative investment firm that concentrates on credit, private equity, and real estate investment approaches. Established in 1992 by Steve Feinberg alongside William L. Richter—who currently holds the role of senior managing director—the company is headquartered in New York City and maintains affiliated offices throughout the United States, Europe, and Asia.
With assets under management totaling roughly US$60 billion, Cerberus is registered as an investment adviser with the U.S. Securities and Exchange Commission. Its investors comprise government and private pension funds, retirement plans, charitable organizations, university endowments, insurance firms, family offices, and sovereign wealth entities.
Top leadership includes CEO Frank W. Bruno, Dan Quayle as Chairman of Global Investments, and John W. Snow serving as Chairman of Capital Management. Cerberus’s investment activities emphasize distressed assets and securities, leveraged buyouts, growth capital deployment, real estate acquisitions, and commercial lending across a broad portfolio.
History
The firm's name derives from the mythological three-headed dog of Greek legend that guarded the underworld.[1] Former U.S. Vice President Dan Quayle joined the company in 1999 and leads its Global Investments Division.[2]
Cerberus has grown to operate 11 offices spanning nine countries, with principal centers located in New York City, Chicago, and Boise, Idaho.[3]
Areas of focus
The company has acquired enterprises across a wide array of industries including financial services, healthcare, consumer and retail markets, government services, manufacturing and distribution, technology and telecommunications, building materials, energy and natural resources, apparel, paper products, packaging and printing, transportation, commercial services, industrial and automotive sectors, real estate, travel and leisure industries, as well as defense-related businesses.[4]
Cerberus engages in private equity investments, lending activities, specialty finance operations, real estate investments, and securities trading.[5] Its holdings encompass more than 40 companies worldwide with an average investment duration surpassing five years.[6]
The firm also manages Cerberus Operations & Advisory Company LLC (COAC), which consists of seasoned operating executives who assist with due diligence processes and portfolio company administration.[7]
Cerberus Operations and Advisory Company LLC (COAC)
Over 100 professionals are employed within COAC to identify opportunities, conduct thorough analysis, and oversee portfolio investments. Their responsibilities include due diligence support, acquisition strategy development, participation on boards of directors, staffing for special projects, and occasionally assuming interim or permanent roles within controlled private equity ventures.
Transactions and initiatives
- March 2010: Provided up to $215 million in financing to satellite imaging firm GeoEye.
- March 2010: Led investment securing ownership interest in Panavision through debt restructuring alongside MacAndrews & Forbes.
- March 2010: Purchased Caritas Christi Health Care—the largest community-based healthcare system in New England—for $246 million; subsequently rebranded it as Steward Health Care.
- April 2010: Acquired DynCorp International, a government services contractor, for approximately $1 billion plus assumption of $500 million in debt.
- June 2010: Sold Talecris to Spain’s Grifols S.A. for $4.2 billion.
- November 2010: Obtained 97 bank branches from Spain’s Caja Madrid via a 25-year leaseback arrangement with Drago Capital.
- Early 2011: Finalized debt restructuring for Maxim Office Park in Scotland and acquired 45 Metro Cash & Carry locations in Germany.
- May 2011: Purchased Silverleaf Resorts at $2.50 per share; also agreed to acquire the global billing and payments division of 3i Infotech for $137 million.
- October 2011: Established a joint venture with Garanti Securities to invest $400 million in Turkey; appointed J.P. Morgan as fund administrator.
- October 2011: Acquired Innkeepers USA Trust for $1.02 billion together with Chatham Lodging Trust; operates prominent hotel brands.
- December 2011: Covis Pharma—owned by Cerberus affiliates—secured U.S. commercial rights to multiple GlaxoSmithKline pharmaceuticals.
- January 2012: Committed additional capital to RG Steel, LLC.
- March 2012: Gained controlling interest in AT&T Advertising Solutions and AT&T Interactive by forming YP Holdings LLC; AT&T received cash payments, notes issuance, and retained an equity stake.
- May 2012: Divested textile manufacturer Guilford Mills to Lear Corporation.
- December 2012: Announced plans to sell Remington Outdoor Company; sale was postponed as of late 2013.
- January 2013: Acquired 877 retail stores from SuperValu chains—including Albertsons and Jewel-Osco—for $100 million plus assumption of $3.2 billion debt.
- September 2013: Closed Accurate Metal Solutions (AMS), resulting in layoffs exceeding 400 employees.
- March 2014: Declared merger agreement between Albertsons and Safeway.
- November 2015: Agreed to purchase £13 billion ($16.5 billion) worth of subprime mortgages from UK Asset Resolution (UKAR).
- December 2015: Formed a strategic partnership valued at $605 million with Avon Products by acquiring an 80% stake in Avon North America and nearly a 17% stake in Avon Inc.
- January 2016: Keane acquired majority ownership of Trican Well Services’ U.S. assets for $247 million.
- May 2016: Sold controlling interest in Blue Bird Corporation to an affiliate of American Securities.
- June 2016: Purchased General Electric’s consumer finance division known as GE Money Bank.
- July 2016: Acquired ABC Group, an automotive parts supplier.
- December 2016: Obtained controlling interest in Staples’ European operations.
- February 2018: Completed acquisition of HSH Nordbank.
- October 2019: Bought aerospace company Stratolaunch Systems; shifted focus toward high-speed flight testing services.
- March 2020: Encountered criticism over plans to close Easton Hospital during the COVID-19 pandemic; hospital remained operational following a last-minute agreement.
- October 2021: Sold securitization fund manager Haya Titulización to Beka Finance.
- November 2022: Acquired Agila Subic Shipyard amid increased U.S. Navy activity due to regional geopolitical tensions.
Pharmaceuticals
In December 2004, acquired Bayer’s plasma products division and rebranded it as Talecris Biotherapeutics. The purchase price was $83 million, and the majority ownership was divested in October 2009, resulting in a net profit of $1.8 billion.
Paper products
In 2005, acquired MeadWestvaco’s paper operations for $2.3 billion and renamed the entity NewPage. Additionally, purchased Georgia Pacific’s Distribution Division/Building Products along with associated real estate assets, leading to the establishment of BlueLinx Holdings headquartered in Atlanta.
Aviation
Participated as part of a consortium, including David Neeleman, in the acquisition of TAP Portugal.
Government services
Owns IAP Worldwide Services, which was obtained through the acquisition of Johnson Controls' World Services division. Previously held Multimax before selling it to Harris Corporation. Also controls Tier 1 Group, which specializes in military training services.
Real estate
Through Cerberus Real Estate, invests in various asset classes such as equity, mezzanine financing, and distressed properties. Holds a minority interest in Miami Beach-based LNR Property via Riley Property. Acquired a portfolio exceeding 6,000 single-family rental homes managed by FirstKey Homes.
Retail
In June 2006, acquired a majority stake in Albertsons grocery stores, forming Albertsons LLC based in Boise. Previously owned shares in Mervyn’s department stores and sold Torex Retail Holdings to MICROS Systems in May 2012. In January 2013, purchased additional stores from SuperValu chains for $100 million plus debt assumption. Entered advanced negotiations for Safeway's acquisition in February 2014. Following this acquisition, Albertsons was positioned for a $25 billion merger with Kroger announced in October 2022.
Transportation
Acquired ANC Rental—owner of National and Alamo car rental brands—in October 2003 for $230 million; sold it to Enterprise Rent-A-Car in 2007. Purchased DaimlerChrysler’s stake in debis AirFinance (later AerCap) with completion in July 2005; AerCap held an IPO in 2006. Owned North American Bus Industries, Optima Bus Corporation, and Blue Bird Corp.; divested commercial bus manufacturing units but retained Blue Bird’s school bus operations.
Automotive
Held ownership of Peguform (acquired 2004, divested four years later), GDX Automotive (until 2011), and a substantial interest in Chrysler. In 2007, led an investor group acquiring an 80% share of Chrysler for $7.4 billion with plans to operate independently; however, this strategy failed due to industry downturns and capital shortages by late 2008. Cerberus surrendered its Chrysler equity as part of US Treasury bailout terms but maintained Chrysler Financial until selling most assets to TD Bank Group for $6.3 billion by April 2011. Chrysler Financial received TARP funding but repaid loans by mid-2009.
Cerberus is also involved with Towd Point Auto, a holding company managing Carvana’s bad debt.
Staffing services
Owns Advantage Hire Thinking (previously known as Radia International).
Financial services
Acquired a controlling 51% interest in GMAC (General Motors’ finance division) for $7.4 billion in 2006; appointed Ezra Merkin as nonexecutive Chairman. GMAC encountered capital difficulties during the financial crisis but secured bank holding company status and received TARP funds totaling $16.3 billion by the end of 2009. Cerberus reduced its GMAC holdings following government agreements and distributed majority stakes to other investors.
Purchased Austrian bank BAWAG P.S.K. for €3.2 billion in December 2006; closed mortgage lender Aegis Mortgage by August 2007; held a minority interest in Bank Leumi that was sold by April 2009; maintains control over Japanese bank Aozora.
In Australia, acquired Bluestone Mortgages (2018), Angle Finance (2019), and Westpac Group’s Strategic Alliances Vendor Finance business (2020).
Firearms
Between April 2006 and January 2008, Cerberus expanded its firearms portfolio by acquiring Bushmaster Firearms International, Remington Arms, Cobb Manufacturing, DPMS Panther Arms, and Marlin Firearms. These entities were consolidated under the Remington Outdoor Company umbrella. In October 2009, Cerberus further extended its reach by purchasing Advanced Armament Corporation, a manufacturer specializing in silencers. Although plans to divest from firearms were initiated after the Sandy Hook incident, the process was postponed due to valuation challenges and investor influence; notably, CalSTRS had exited its firearms investments by June 2015. Ultimately, Remington Outdoor Company sought Chapter 11 bankruptcy protection in March 2018.
Entertainment
From January to April 2008, Cerberus acquired seven television stations from CBS Corporation located in Austin, Salt Lake City, Providence, and West Palm Beach for roughly $185 million. These assets were later sold to Sinclair Broadcast Group for $200 million, with the transaction completing in January 2012. The firm also owns Spyglass Entertainment, a film production company. Additionally, Cerberus purchased Corvest, a promotional products company operating in Florida and other regions.
Other sectors
Cerberus divested its stake in Formica Inc. during 2007.
Broken deal for United Rentals
In the summer of 2007, Cerberus reached an agreement to acquire United Rentals but retracted the offer following tightening credit markets. As part of the withdrawal, Cerberus paid a $100 million reverse termination fee negotiated between the parties. United Rentals pursued legal action seeking enforcement of the agreement; however, the Delaware Court ruled in favor of Cerberus based on contractual clauses that limited their liability.