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Resource #1: (4.3.09) Cerberus Capital Management LP, the $27 billion investment firm founded by billionaire Stephen Feinberg, may use stakes in a new vehicle to pay investors seeking withdrawals from a hedge fund after redemptions surged.
Setting up a so-called special purpose vehicle to meet redemption requests from Cerberus Partners LP, which capped withdrawals in December after its assets slumped, is one option being considered by the New York-based firm, according to a March 27 letter to investors. The company may also pay withdrawals in cash within the one-year suspension period.
Cerberus, founded by former Drexel Burnham Lambert Inc. banker Feinberg in 1992, limited withdrawals from the hedge fund after it lost 16 percent in the year through November. The fund fell 3 percent to $1.99 billion in the first two months of 2009, according to the letter, a copy of which was obtained by Bloomberg. The surge in withdrawals and the creation of the new vehicle may result in investors waiting years to get their money. source
Resource #2: Canadian Imperial Bank of Commerce, which has taken more writedowns than any Canadian lender during the financial crisis, said Cerberus Capital Management LP will invest $1.05 billion in its U.S. real estate portfolio, helping the bank reduce risk. The U.S. buyout fund will pay cash for senior notes linked to the residential real estate assets, the Toronto-based bank said today in a statement. Cerberus will receive cash flow from the notes, while CIBC will retain ownership of the underlying assets, the bank said.
CIBC, which wrote down its debt investments by about C$7.55 billion ($6.97 billion) since last year, said it's giving away ``potential upside'' in its portfolio to protect against any downside in the real estate market.
``We've been very clear that we've been looking to de-risk the bank, and I think this a pretty high profile example of finding a way to do that,'' Chief Administrative Officer Ron Lalonde said in a telephone interview.
Chief Executive Officer Gerald McCaughey has been trying to reduce risk at the bank's U.S. operations, selling most of its New York-based investment banking business to Oppenheimer Holdings Inc. in January. More......
Resource #3: Cerberus Capital Management's [CBS.UL] core hedge funds clients have opted to withdraw the majority of the money in the funds, the Wall Street Journal reported on Friday.
Clients owning more than $4 billion of the $7.7 billion in assets in the Cerberus Partners hedge funds have opted to liquidate their holdings, rather than allow Cerberus to collect its typical fees and continue making new investments, the paper said, citing people familiar with the matter.
Cerberus executives hope that some investors who have opted for withdrawals can be convinced to change their minds, the paper cited the people familiar with the matter as saying. Investors had been told they had until this week to vote on the fate of their hedge-fund holdings, the paper said. Source