Key Takeaways
- • The Private Equity Stakeholder Project (PESP) published a Risk Assessment of Cerberus Capital Management that examines the risks of its investments and the returns generated by its funds.
- • PESP identifies four risk categories: poor investment performance relative to peers, strategy and execution risks, headline risks, and regulatory risks.
- • Cerberus has raised tens of billions of dollars from institutional investors including pension funds, university endowments, and foundations.
- • PESP urges institutional investors to assess whether Cerberus' returns are adequate for the risks they entail.
Summary
The Private Equity Stakeholder Project (PESP) has released a new Risk Assessment of Cerberus Capital Management, the New York-based alternative investment firm, according to the publisher's summary. The report reviews the risks associated with Cerberus' investments as well as the returns generated by its investment funds. Cerberus has raised tens of billions of dollars from institutional investors, including pension funds, university endowments, and foundations, and PESP argues that these investors should evaluate whether the returns are adequate given the risks involved.
PESP's assessment identifies four areas of concern. The first is poor investment performance relative to peers. The second is strategy and execution risks. The third is headline risks, which relate to reputational exposure arising from the firm's activities. The fourth is regulatory risks.
Cerberus describes itself as an established alternative investment advisor, founded in 1992, with approximately $70 billion in assets across credit, private equity, and real estate strategies. The firm states that its investment strategies rest on five principles: flexibility, innovation, risk management, discipline, and transparency. The full report is available through PESP's website.
PESP's assessment identifies four areas of concern. The first is poor investment performance relative to peers. The second is strategy and execution risks. The third is headline risks, which relate to reputational exposure arising from the firm's activities. The fourth is regulatory risks.
Cerberus describes itself as an established alternative investment advisor, founded in 1992, with approximately $70 billion in assets across credit, private equity, and real estate strategies. The firm states that its investment strategies rest on five principles: flexibility, innovation, risk management, discipline, and transparency. The full report is available through PESP's website.
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