Cerberus Capital Management – Company Profile

Mezzanine financing company overview

Mezzanine firm logo:

Cerberus Capital Management - mezzanine financing company logo

Headquarters location:

United States

Typical mezzanine financing range:

Undisclosed

Geographic focus:

Global

Industry focus:

Industry agnostic

Company profile

Cerberus Capital Management, L.P. is one of the world’s leading private investment firms. Founded in 1992, they have excelled at distressed investing since their inception and have built a highly regarded reputation for their focus on deep value.

Cerberus and its affiliates manage approximately $25 billion for many of the world’s most respected investors, including government and private sector pension and retirement funds, charitable foundations and university endowments, insurance companies, family offices, sovereign wealth funds and high net worth individuals.

Cerberus directs its global investment strategies from its headquarters in New York City, and draws on the expertise of a network of advisory offices throughout the United States, Europe, and Asia.

Former Vice President of the United States, Dan Quayle, chairman of Cerberus Global Investments, and former United States Secretary of the Treasury, John W. Snow, the Firm’s chairman, work closely with the Firm’s investment and operating professionals. Their economic, public policy and international experience is invaluable to the Firm, its portfolio and its investors.

Cerberus employs approximately 150 dedicated investment professionals. Their senior leadership team has worked together for nearly two decades, and many of their investment professionals have been with the Firm for more than a decade. In partnership with former C-suite executives and operations specialists at their affiliate Cerberus Operations and Advisory Company, LLC (COAC), the team offers expertise across every investment strategy and allows Cerberus to move decisively in assessing, acting upon, managing and optimizing opportunities.

The Firm’s proprietary operations affiliate, Cerberus Operations and Advisory Company, LLC (COAC) provides the team with a distinct competitive advantage. COAC consists of approximately 110 highly experienced executives from a wide spectrum of industries and disciplines. Their sector expertise includes manufacturing, energy, health care, financial services, technology, consumer goods, retail, transportation, media and government services, among others. COAC assists Cerberus by sourcing opportunities, conducting highly informed due diligence, executing acquisitions and improving the performance of portfolio investments. COAC executives often hold senior leadership and director positions at Cerberus’ portfolio companies, and COAC teams are regularly deployed to provide practical assistance to help drive operational and strategic transformations in areas including:

  • Strategy
  • Sales and Marketing
  • Finance
  • Operating Initiatives Group
  • Human Resources
  • Information Technology
  • Legal and Regulatory
  • Insurance
  • Environmental, Health and Safety
  • Supply Chain
  • Procurement
  • Manufacturing Operations

Investment philosophy/criteria

Cerberus’ investment strategies adhere to five inter-related principles: Flexibility, Innovation, Risk Management, Discipline and Transparency. Individually, each principle represents a smart approach to profitable asset identification and management. Collectively, they are a best-in-class strategic approach that allows the Firm to successfully deploy capital and human resources in diverse market conditions across a variety of geographic regions and investment sectors.

  • Flexibility: Cerberus takes great pride in their team’s speed and dexterity in applying its expertise to pursue investments in any market cycle, geography or sector. Because they focus on operational outcomes and are not exclusively focused on any one sector or category, their investment teams have the freedom to seize the right opportunities. Investments are made on the basis of their own merit and whether they complement the overall portfolios of the firm’s funds and accounts.
  • Innovation: The Firm has led the industry in asset management by seamlessly integrating their investment and operations teams. Drawing on their management experience and financial acumen, their investments reflect a Firm-wide fluency in both complex financial strategies and operational requirements and execution.
  • Risk Management: Cerberus is deeply committed to protecting investors through comprehensive risk mitigation. Their business model is rooted in vigorous due diligence, strict compliance and the application of efficient, creative and customized deal structuring solutions. Cerberus-managed funds make conservative use of asset-level leverage and are diversified to avoid concentration in single sectors or geographies. Investments undergo rigorous valuation analysis and are constantly monitored by their operations and investment professionals, and an independent valuation team.
  • Discipline: Cerberus is a steadfast deep-value investor. They are rigorously disciplined about where and how they invest. Their investments do not rely on macroeconomic improvement or industry multiple expansion as cornerstone investment principles. They grow their portfolio based typically on rigorous analyses of actual value and conservative projections of the opportunity for value creation through operational efficiencies, rather than on arbitrary growth theses. Most importantly, they invest where they can leverage their operational and financial experience to achieve the greatest impact.
  • Transparency: Cerberus demands a culture of strong corporate governance and an unwavering commitment to financial and operational transparency and best practices. They have been a Securities and Exchange Commission (SEC) registered investment adviser since January 2010. The fees that they charge their investors are clearly disclosed and are structured to align its interests with its investors’ and encourage strong performance. They do not typically charge extraordinary deal, financing, monitoring, structuring or board fees, and when such fees are charged, they are typically rebated to their investors.

Cerberus Middle-Market Lending

Cerberus Business Finance, LLC and their lending affiliates offer one-stop financing solutions to private equity sponsors and businesses. With 20 years of experience, their middle market lending affiliates provide innovative financing solutions to companies in a wide variety of business contexts across multiple geographies and industries. They have provided financing to more than 185 financial sponsors.

The firm’s senior lending professionals collaborate with their operations executives to turn proposals into closed transactions and remain the point of contact throughout the underwriting, closing and beyond. Their streamlined methodology and flat organization simplify the approval process, allowing many proposals to close in three weeks or less.

Cerberus’ lending affiliates typically provide the following types of commercial loans:

  • Acquisition Financing – Extensive access to lending capital allows their lending affiliates to provide financing solutions to companies and private equity sponsors seeking to make strategic acquisitions.
  • Recapitalizations – When changes to the capital structure are required, their seasoned lending professionals work with investors and executives to develop solutions that recapitalize and position companies for future growth.
  • Working Capital Financing – For companies that are expanding quickly, accessing capital to help fuel growth and meet obligations is vital. Their lending affiliates are highly flexible in providing working capital financing, a quality that remains unmatched in the market.
  • Bridge Loans – Companies in need of short-term financing turn to their lending professionals for their ability to provide lending solutions expeditiously without the numerous approvals required by traditional lenders.
  • Debtor-in-Possession Financing – With an extensive track record in financing companies in distressed situations, their lending affiliates are uniquely able to develop effective debtor-in-possession (DIP) financing solutions for companies undergoing restructurings.

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