Anyone have insight to the above questions? I'm starting the interview process with them soon and would be very curious to know. Thanks

People tend to think life is a race with other people. They don't realize that every moment they spend sprinting towards the finish line is a moment they lose permanently, and a moment closer to their death.
 

Cerberus is commonly known to have among the worst culture on wall st. I've seen this first hand when working with them, I've heard it second hand from people who have been there and I've seen it in the attrition and overall satisfaction there. I also know at least 3-4 people who had an offer from Cerberus and at least one other shop and they always picked the non-Cerberus option.

That being said, very reputable firm but youd be well advised to consider all options before accepting there.

 

I'd be interested in hearing about the internal investment thesis behind the Chrysler investment from anyone who actually worked there, what the hidden value realization was envisioned to be, what levers could be pulled, and how that post-close leverage parameter was well-suited...

 
DurbanDiMangus:
I'd be interested in hearing about the internal investment thesis behind the Chrysler investment from anyone who actually worked there, what the hidden value realization was envisioned to be, what levers could be pulled, and how that post-close leverage parameter was well-suited...

Curious about this as well, does anyone here have details on this?

People like Coldplay and voted for the Nazis, you can't trust people Jeremy
 
WalMartShopper:
One of the few that I truly desire to be a part of. I don't have enough information, but from what I have come across I've been fascinated. Why did you ask this question op?

I was just curious. Everyone talks about megafunds all the time but I never hear anything about Cerberus so I was just wondering.

 

I have heard that they're trying to moving back towards the founder's roots as a debt guy and away from buyouts (as noted above shuttering Dymas to start their own MM lending group, reramping Ableco). Their credit funds performed very well last year. Freedom Group is definitely in-the-money for them when they exit. I've also heard from FOF people that they burned a ton of bridges when they gated so the longer-term outlook may be shaky.

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 
Kenny_Powers_CFA:
I have heard that they're trying to moving back towards the founder's roots as a debt guy and away from buyouts (as noted above shuttering Dymas to start their own MM lending group, reramping Ableco). Their credit funds performed very well last year. Freedom Group is definitely in-the-money for them when they exit. I've also heard from FOF people that they burned a ton of bridges when they gated so the longer-term outlook may be shaky.

Just curious... why do you think Freedom Group is "definitely in-the-money"? They pulled the plug on the IPO and sales haven't been well.

 
Kenny_Powers_CFA:
I have heard that they're trying to moving back towards the founder's roots as a debt guy and away from buyouts (as noted above shuttering Dymas to start their own MM lending group, reramping Ableco). Their credit funds performed very well last year. Freedom Group is definitely in-the-money for them when they exit. I've also heard from FOF people that they burned a ton of bridges when they gated so the longer-term outlook may be shaky.
This is all 100% what I would have said, buyout is probably not the way forward, they are essentially a debt group and I believe that is where they will concentrate going forward.
 
Best Response

This reminds me of one of my favorite Long or Short Capital articles: Better Ways to Spend $7.4 billion than buying Chrysler by Johnny Debacle •Donating $1,000 in malt liquor money to each member of the US homeless population •Making Spiderman 3 24.67 times •Drowning a stripper by making it rain with $7.4 billion in singles. Sacagawea singles. •Buying decaying shark corpse art for all your closest friends. Your 1,000 closest friends assuming you get a discount for buying decaying shark corpses in bulk (we have little information on the dynamics of the decaying shark art market). •Purchasing Manchester United, Arsenal, AC Milan, Real Madrid, the New York Yankees, the Boston Red Sox, the LA Dodgers, the Chicago Cubs and the New York Mets with enough cash to probably buy half the NHL. •Lifetime bottle service •1.75 billion golf balls to prep for that management consulting interview question •A money bonfire http://longorshortcapital.com/better-ways-to-spend-74-billion-than-buyi…

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 

[quote=Kenny_Powers_CFA]This reminds me of one of my favorite Long or Short Capital articles: Better Ways to Spend $7.4 billion than buying Chrysler by Johnny Debacle •Donating $1,000 in malt liquor money to each member of the US homeless population •Making Spiderman 3 24.67 times •Drowning a stripper by making it rain with $7.4 billion in singles. Sacagawea singles. •Buying decaying shark corpse art for all your closest friends. Your 1,000 closest friends assuming you get a discount for buying decaying shark corpses in bulk (we have little information on the dynamics of the decaying shark art market). •Purchasing Manchester United, Arsenal, AC Milan, Real Madrid, the New York Yankees, the Boston Red Sox, the LA Dodgers, the Chicago Cubs and the New York Mets with enough cash to probably buy half the NHL. •Lifetime bottle service •1.75 billion golf balls to prep for that management consulting interview question •A money bonfire http://longorshortcapital.com/better-ways-to-spend-74-billion-than-buyi…]

HAHAHA

 

I obviously didn't work on this, but I looked into it back in the day.

DaimlerChrysler announced it will sell an 80 percent stake in its U.S. brand to Cerberus Capital Management, a private equity investment firm that will pay $7.4 billion.

But the German automaker, which will be renamed simply Daimler, will not actually get most of the money that Cerberus is paying for the once proud automaker. Instead Cerberus will contribute $5 billion to the Chrysler auto operations it will now control, with just a bit more than another $1 billion going to Chrysler's finance arm.

While Daimler will receive the remaining $1.4 billion of Cerberus's capital contribution to the sale, Daimler expects to have to cover another $1.6 billion in Chrysler losses before the deal closes. So Daimler estimates that it will end up paying out about $650 million to close the deal and that its earnings for 2007 will take a $4 billion to $5.4 billion profit hit because of charges related to the transaction. http://money.cnn.com/2007/05/14/news/companies/chrysler_sale/index.htm

Look at the actual flow of funds / sources & uses. $6.0bn of the $7.4bn out of pocket was going directly to fund the turnaround. You can also look at the remaining $1.4bn in a couple of different ways too

That may help put some of Feinberg's comments in context

“We do not need to be heroes to earn a good return on the investment in Chrysler,” he wrote. “We do not need to transition the car industry or even to return Chrysler to a much stronger relative position in the U.S. car market in order to be successful.”
All that changed on May 14 when another mustachioed C.E.O., Dieter Zetsche of DaimlerChrysler, announced he was selling Chrysler to Cerberus for $7.4 billion. (Daimler is retaining a 20 percent stake.) It marked the historic end of the German carmaker’s cross-cultural business experiment and the return of an American icon to U.S. soil. Feinberg didn’t even bother to appear at the press conference.

"We hesitated [at making the deal],” he says at this meeting a month later, the annual gathering of Cerberus investors, “because we knew it would get an insane amount of press, and boy, we don’t like that. But the deal was so good.”

A lot of HFs liked the deal too http://blogs.wsj.com/deals/2007/09/25/cerberus-the-hedge-funds-hedge-fu… http://online.wsj.com/article/SB119067700681638040.html

 
MMmonkey]I obviously didn't work on this, but I looked into it back in the day.</p> <p>[quote:
DaimlerChrysler announced it will sell an 80 percent stake in its U.S. brand to Cerberus Capital Management, a private equity investment firm that will pay $7.4 billion.

But the German automaker, which will be renamed simply Daimler, will not actually get most of the money that Cerberus is paying for the once proud automaker. Instead Cerberus will contribute $5 billion to the Chrysler auto operations it will now control, with just a bit more than another $1 billion going to Chrysler's finance arm.

While Daimler will receive the remaining $1.4 billion of Cerberus's capital contribution to the sale, Daimler expects to have to cover another $1.6 billion in Chrysler losses before the deal closes. So Daimler estimates that it will end up paying out about $650 million to close the deal and that its earnings for 2007 will take a $4 billion to $5.4 billion profit hit because of charges related to the transaction. http://money.cnn.com/2007/05/14/news/companies/chrysler_sale/index.htm

Look at the actual flow of funds / sources & uses. $6.0bn of the $7.4bn out of pocket was going directly to fund the turnaround. You can also look at the remaining $1.4bn in a couple of different ways too

That may help put some of Feinberg's comments in context

“We do not need to be heroes to earn a good return on the investment in Chrysler,” he wrote. “We do not need to transition the car industry or even to return Chrysler to a much stronger relative position in the U.S. car market in order to be successful.”
All that changed on May 14 when another mustachioed C.E.O., Dieter Zetsche of DaimlerChrysler, announced he was selling Chrysler to Cerberus for $7.4 billion. (Daimler is retaining a 20 percent stake.) It marked the historic end of the German carmaker’s cross-cultural business experiment and the return of an American icon to U.S. soil. Feinberg didn’t even bother to appear at the press conference.

"We hesitated [at making the deal],” he says at this meeting a month later, the annual gathering of Cerberus investors, “because we knew it would get an insane amount of press, and boy, we don’t like that. But the deal was so good.”

A lot of HFs liked the deal too http://blogs.wsj.com/deals/2007/09/25/cerberus-the-hedge-funds-hedge-fu… http://online.wsj.com/article/SB119067700681638040.html[/quote]

Hey man thanks for the post, I missed it when you replied. I def agree w some of ur comments. I know of ppl who looked @ the bank debt. Correct me if im wrong but I think 2006 total lev was 5x, and lev thru 1st lien was ~3.8x-4x? The main catalysts / investment rationale where the following (very weak catalysts and very "2006"): - Chrysler Auto Co. had sufficient liquidity to weather years of cash burn to effect a true turnaround. Proved untrue. - Cerberus was expected to contribute further capital here if stuff went south. Not the case. - M&A event likely, either in its entirety or asset sale optionality (attractive brands and attractive FinCo).

The bank debt was said to be attractive - M&A event would refi the cap structure - 1st lien coverage 1.5x-2x depending on inclusion of equity in subs - hidden liquidity support @ junior parts of the cap structure (eg. equity holders doubling down due to national importance of asset)

Again -- from what I surmise pretty weak rationale here

 

Personally, I think that fund performance is somewhat less relevant (now assuming your fund is not going to close - which obviously has personal employment implications then) at a junior level.

What you want to be getting is experience and exposure/access to quality people, ideas, deals and processes at the junior leve to build your skill set.

On the question of whether Cerberus has "fallen", it is rather subjective - and hard to answer without knocking which perspective you are looking at - for all you know - they could have negotiated a great deal for themselves on Chrysler, leaving the banks to hold the bucket (I have no knowledge of this situation at all).

 

Est explicabo sit aspernatur ea aut. Autem voluptatibus hic occaecati magni excepturi. Et neque est voluptas laudantium deserunt eum non. Perferendis repellat qui eum necessitatibus quo voluptas. Repudiandae occaecati voluptates est dolores.

Consequuntur et iure sit voluptate repellendus at. Qui eligendi quas repudiandae quia et. Tenetur repellendus veritatis quam eius et. Totam dolores molestiae vel asperiores voluptatem cupiditate voluptatem quasi.

Ad saepe vitae recusandae aut corporis autem. Excepturi natus nam est. Illum exercitationem cupiditate voluptas consequatur. Placeat qui quidem ipsa sequi culpa. Eveniet omnis minima ea reprehenderit iste quia. Architecto id fuga in ratione sint eaque fugit.

Quos quis alias molestiae eos. Excepturi enim eum unde neque quas eveniet soluta. Omnis qui fugit itaque. Ipsum rerum rerum delectus maxime veniam aut in. Itaque deserunt omnis quam voluptatem. Consectetur quo non quis repudiandae aut.

 

Nisi sint totam quos in distinctio iste. Facere id enim facere cupiditate aspernatur. Natus aut sed eveniet possimus ea saepe. Neque aut sit sit nihil soluta. Molestiae est similique id quia ut similique delectus.

Illum dolores in nobis dolores voluptatem est consequatur. Fugiat et cumque ut molestiae.

Hic non eligendi voluptatem officia numquam voluptatibus. Quasi voluptatem dolores perspiciatis voluptatum sint accusamus quia earum. Magnam error fugit qui soluta exercitationem. Itaque necessitatibus dolorum sunt corrupti quia facilis. Dolor suscipit quis dolor. Quia sit asperiores exercitationem. Incidunt aut nihil nihil dignissimos.

Career Advancement Opportunities

March 2024 Private Equity

  • The Riverside Company 99.5%
  • Warburg Pincus 99.0%
  • Blackstone Group 98.4%
  • KKR (Kohlberg Kravis Roberts) 97.9%
  • Bain Capital 97.4%

Overall Employee Satisfaction

March 2024 Private Equity

  • The Riverside Company 99.5%
  • Blackstone Group 98.9%
  • KKR (Kohlberg Kravis Roberts) 98.4%
  • Ardian 97.9%
  • Bain Capital 97.4%

Professional Growth Opportunities

March 2024 Private Equity

  • The Riverside Company 99.5%
  • Bain Capital 99.0%
  • Blackstone Group 98.4%
  • Warburg Pincus 97.9%
  • Starwood Capital Group 97.4%

Total Avg Compensation

March 2024 Private Equity

  • Principal (9) $653
  • Director/MD (21) $586
  • Vice President (92) $362
  • 3rd+ Year Associate (89) $280
  • 2nd Year Associate (204) $268
  • 1st Year Associate (386) $229
  • 3rd+ Year Analyst (28) $157
  • 2nd Year Analyst (83) $134
  • 1st Year Analyst (246) $122
  • Intern/Summer Associate (32) $82
  • Intern/Summer Analyst (313) $59
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
Secyh62's picture
Secyh62
99.0
5
GameTheory's picture
GameTheory
98.9
6
dosk17's picture
dosk17
98.9
7
DrApeman's picture
DrApeman
98.9
8
CompBanker's picture
CompBanker
98.9
9
kanon's picture
kanon
98.9
10
numi's picture
numi
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”