Bloomberg – Cerberus Capital Management LP, the $27 billion investment firm founded by billionaire Stephen Feinberg, may use stakes in a new fund to pay investors seeking withdrawals from a hedge fund after redemptions surged. <\/p>\n
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. <\/p>\n
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 fund may result in investors waiting years to get their money. <\/p>\n