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Trouble for Cerberus?

Cerberus investors want out:

Investors in hedge funds run by Cerberus Capital Management LP, whose audacious multi-billion dollar bet on the U.S. auto industry went bust, are bolting for the door, clinching one of the highest-profile falls from grace of a superstar in the investment world.

Clients are withdrawing more than $5.5 billion, or nearly 71% of the hedge fund assets, in response to big investment losses and their own need for cash, according to people familiar with the matter.

“We have been surprised by this response,” Cerberus chief Stephen Feinberg and co-founder William Richter wrote in a letter delivered to clients late Thursday.

Cerberus owns many gun companies. And used to own Chrysler.

5 Responses to “Trouble for Cerberus?”

  1. Kristopher Says:

    … and made the big mistake of asking for a subsidy during a marxist administration.

    Shoulda stuck to what they know.

    Buying a big US auto company, and not moving it physically away from the trade unions = sucker.

  2. Steve Says:

    Before i make my comment, I’ll say outright i don’t like Cerberus, as a citizen, or as an investor. Any outfit that would take Bob Nardelli back after trashing both home Depot and Chrysler is a bad firm.

    Now, as to the facts, Cerberus being a private equity fund, own all kinds of stuff, and operates hedge funds as well.

    On the corperate investment side, it made some horrible calls, i.e. chrysler.

    In it’s hedge fund ops? Well, lots of hedge funds suffered massive redemptions to thier contributing partners. If the partners want out, they have to be given thier money back anytime a redemption window opens

    Hedge funds redemptions were a major portion of the stock market crash last fall. Most if not all hedge funds suffered them, and many funds went out of business.

    Hedge funds are designed for wealthy, high risk investors. Unless you have major bucks, you and I aren’t allowed in them by law. They are not mutual funds, and don’t operate like them. They are exclusive clubs, many by invitation only.

    Cerberos corperate investment/ownership side isn’t directly linked to it’s hedge funds, unless the funds had/have a great deal of their own stocks in them. I have yet to see any indication that that is true. If it is then they would have to have some of the worst hedge fund managers in the business in which case the redemptions had merit.

    If not, they are just hurting in paralell with the rest of the indusrty.

  3. countertop Says:

    Don’t bet against Obama making the link between this, their mismanagement of chrysler and the fact that they own all these awful makers of assault weapons amnd seem intent on overthrowing the president for right wing purposes.

    Next thing you know – we will have to break them up – for the good of the children and the country!!

    I smell first, an anti trust investigation into their firearms ownership, forced breakup with obama appointed boards at the new companies (perhaps even Michael bloomberg), and then lo and behold, Americas major firearms manufacturers are all calling for a new assault weapons ban.

  4. Crucis Says:

    Another danger is the Cerebus also owns a number of firearm companies. If Cerebus goes under, what will happen to them?

  5. Michael Hawkins Says:

    The Herstal group will probably try to acquire as many factories as possible, if only to increase their ammo production capacity in the US. In between their FBI contracts, military orders and civvies buying every box on the shelves up until a few weeks ago, I’m willing to bet good money they’re trying to get as well-stocked as possible.

Remember, I do this to entertain me, not you.

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