Cerberus Capital Management – Risk Assessment

The report argues that Cerberus Capital Management has demonstrated poor investment performance relative to peers and faces significant risks across its portfolio. It highlights losses in German banking investments, reputational damage from financing the 'asset stripping' of newspapers via Alden Global Capital, and legal issues involving military contractors and residential evictions.

• Cerberus' commingled funds have consistently underperformed their peers. Out of eleven funds raised between 2001 and 2017 across private equity, private debt, and private real estate, seven are ranked in the 3rd or 4th quartiles based on Pitchbook benchmarks.
• The firm experienced significant losses from minority investments in Deutsche Bank and Commerzbank starting in 2017. By December 2019, the €960 million investment in Deutsche Bank and the €678 million investment in Commerzbank had each lost approximately half of their value.
• Cerberus has provided repeated financing to Alden Global Capital, a hedge fund accused of 'asset stripping' newspapers by cutting staff and selling buildings. This includes a $218 million loan to support Alden's acquisition of Tribune Publishing.
• The firm faces reputational risk due to its ownership of Tier 1 Group, which provided paramilitary training in 2017 to members of the Saudi unit responsible for the 2018 killing of journalist Jamal Khashoggi.
• Through FirstKey Homes, Cerberus has invested heavily in single-family rentals in majority-Black cities, specifically Memphis, Tennessee. The firm has been criticized for aggressive eviction tactics and high rates of property code violations.
• Cerberus-owned Steward Health Care threatened to close Easton Hospital in Pennsylvania in March 2020 unless the state provided a $40 million bailout, despite Cerberus making an $800 million profit from Steward over a decade.
• Cerberus faced regulatory and legal risks through its ownership of DynCorp (2010-2020), which paid at least $9 million to settle multiple US Department of Justice lawsuits alleging the company defrauded the US Government regarding contracts in Iraq.

APA

Baker, J. (2022). Cerberus Capital Management – Risk Assessment. Private Equity Stakeholder Project. https://pestakeholder.org/wp-content/uploads/2022/01/Cerberus-Capital-Management-Risk-Assessment-PESP-January-2022.pdf

Chicago

Baker, Jim. Cerberus Capital Management – Risk Assessment. Private Equity Stakeholder Project, 2022. https://pestakeholder.org/wp-content/uploads/2022/01/Cerberus-Capital-Management-Risk-Assessment-PESP-January-2022.pdf.

Wikipedia

{{cite report |last1=Baker |first1=Jim |title=Cerberus Capital Management – Risk Assessment |publisher=Private Equity Stakeholder Project |date=January 2022 |url=https://pestakeholder.org/wp-content/uploads/2022/01/Cerberus-Capital-Management-Risk-Assessment-PESP-January-2022.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{baker2022cerberus, author = {Baker, Jim}, title = {{Cerberus Capital Management – Risk Assessment}}, institution = {Private Equity Stakeholder Project}, year = {2022}, month = jan, url = {https://pestakeholder.org/wp-content/uploads/2022/01/Cerberus-Capital-Management-Risk-Assessment-PESP-January-2022.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }