Cerberus...Now what?

[Uncle Mike]

Cerberus Capital Management

Cerberus Hedge Fund Investors Jump Ship
Now it appears that those fears may have been well-founded. According to the Wall Street Journal, “Cerberus Capital Management’s investors overwhelmingly want out of the firm’s core hedge funds, asking for the return of more than $5.5 billion, or almost 71% of the fund assets”. That’s bad news for Cerberus of course. However, the Hedge Fund represents only about 1/3 of Cerberus assets, so the overall picture isn’t completely bleak. The Private Equity (PE) Fund, for which Cerberus is most famous, is NOT directly affected by these Hedge Fund issues. Still, the PE Fund is not without its own problems. Cerberus’s investment in Chrysler proved disasterous. After Chrysler went into bankruptcy, most of its assets were turned over to Fiat and the UAW.

What’s ahead for Cerberus? We can’t predict. There’s no reason to believe, at this time, that Cerberus is seriously threatened. Likewise, there may be no immediate effect on the operations of Remington, Bushmaster, and Marlin. However, you can bet that the top Cerberus decision-makers will be taking a hard look at the “bottom line” of all the enterprises Cerberus controls. And that, in turn, could mean a financial squeeze for Freedom Group companies that are not performing up to expections.

Freedom Group Gun Companies:
Bushmaster, Dakota Arms, DPMS, Eotac, H&R, L.C. Smith, NEF, Parker Gun, Remington Arms Co.

Well boys and girls...let's hope this does not lead to anything bad for the firearms industries concerned....what's it all mean...?

 

[highorder]

What does it all mean?

If they sell off the gun companies, what wil that mean for the consumer?
Discontinued models? lower prices? higher?

 

[TexasRifleman]

If they sell off the gun companies, what wil that mean for the consumer?
Discontinued models? lower prices? higher?

If those divisions are not profitable given the current climate I would be very shocked.

I'd expect them to keep anything that was making money.

 

[ArmedBear]

Was Marlin subsumed by Remington?

I note that it's not in the list, whereas LC Smith is, and LC Smith is a fiction, existing only in name.

WRT Cerberus? It'll implode sooner or later. Every such company does. They go in, buy up a bunch of companies in a certain area, and strip them all of their futures in the chase for immediate returns. Soon, the companies gain a reputation for declining quality, new product introductions fall flat, and customers go elsewhere.

Sound familiar?

Whether it's now or later, I hope they do sell off a few of those companies, especially Marlin.

 

[Uncle Mike]

YES...Marlin is owned by Cerberus as is Remington, Bushmaster, DPMS, H&R, NEF, Parker, L.C.Smith, EOtac and Dakota Arms...

 

[DoubleTapDrew]

If they dump them somebody else will buy them and keep operating. Firearms and ammunition companies were one of the few industries that actually thrived during the recession.

 

[ArmedBear]

YES...Marlin is owned by Cerberus

I know that.

What I was asking was, since it's not listed in the brands, is it now considered merely a department of Remington, or does Marlin retain some independence?

 

[Cougfan2]

The Remington and Marlin names have too much brand recognition value for someone not to snap them up if Cerberus decides to sell them off. Not sure what would happen to the other companies, but I would expect that at least Bushmaster and DPMS would survive in some fashion.