Awards for Excellence 2007: Best Private Equity House
A respect for existing management at buyout targets is central to the success of Steve Feinberg’s Cerberus.
Also shortlisted in this category:
Steve Feinberg might regret naming his private equity firm after a fearsome three-headed mythical dog, as he once professed to employees, but it might be his only regret to date as far as Cerberus is concerned. Cerberus has steadily been rising among the Wall Street ranks to become one of the world’s most respected private equity firms. While many of its peers have bought out companies in order to strip assets and sell on for a profit, Cerberus builds its reputation on identifying firms that are undervalued, and assisting in rejuvenating them by working with current management. It has demonstrated a preference for holding profitable investments with operational upside. "They don’t go in looking for an exit," says a person familiar with the firm. "They look to buy, fix and hold." Take Aozora Bank, the former failed Nippon Credit Bank. Cerberus bought Softbank’s stake in the Japanese bank in 2003 when it was on the brink of insolvency, raising its holding to 62%. Under Cerberus’s guidance, Aozora expanded its risk management expertise and refocused the bank on corporate lending and specialized financing services.