Cerberus finds glare of publicity unwelcome

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Cerberus Capital Management, the buy-out group that approached Northern Rock over a bid last year, has launched a withering attack on the press.

The assault, made in a nine-page letter to investors on 22 January, emerged yesterday in the same week that the private equity trade body in the UK claimed the industry had embraced a drive to bring greater transparency to its business.

In the letter, Cerberus said: "We despise all the public attention we are getting. We apologise for all the press you probably see about us."

The tetchy note was signed by the fund's managing member, Stephen Feinberg, and its senior managing partner, William Richter. Mr Feinberg is notoriously protective of his privacy. During a recent court case, the judge declined his request asking for all cameras to be turned off to prevent his picture emerging.

In last month's note, the group conceded that the larger it becomes, and the bigger its targets, such as its acquisition of the car-maker Chrysler, it will be forced into the glare of publicity. "We must have a thick skin," it said. "As a bigger company today with some higher profile deals, we are a target. There is no avoiding that."

The management was clearly stung by the coverage of the United Rentals saga, "for which we have received unfairly, considerable negative press coverage". Cerberus pulled out of a $4bn (£2bn) deal to buy United, the largest equipment rental company in the US, in November.

When it walked away, United said the $100m break fee was not adequate compensation for the collapse in its share price, and launched a lawsuit. The Delaware court subsequently ruled in favour of Cerberus.

The company was confident about its investment in Chrysler, but added that it had "significant concerns" over its investment in Gmac. "If the credit markets continue to decline and we find ourselves in a prolonged environment of capital market shutdown, Gmac could run into substantial difficulty."

Cerberus, which walked away from negotiations with Northern Rock in November, said: "The last six months have been brutal for the credit markets. We have seen a widespread decline across all sectors."

The group said that the credit crunch had afforded opportunities in the market. "We must remain humble and also hungry," it said.

Earlier this week, the British Private Equity and Venture Capital Association released a report outlining the benefits of private equity on the UK, part of its attempt to provide transparency in the sector. It also announced the appointments to the committee to oversee a voluntary code of practice for the industry.