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The Dog That Roared

Why the guy who bought Chrysler is the ultimate New Yorker.

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In 1927, Walter Chrysler bought a building then under construction on the corner of 42nd Street and Lexington Avenue, and renamed it in honor of himself and his auto company. Now that company is the property of private-equity powerhouse Cerberus Capital Management (headquartered a few blocks uptown, at 299 Park Avenue). But Cerberus’s self-consciously secretive founder, Stephen Feinberg, a Princeton grad who lives on the Upper East Side, is not given to naming buildings after himself. Who is this mysterious moneyman?

1. He is the publicity-shy oligarch du jour.
Now we’ve got photos of Ken Griffen of Citadel and SAC Capital’s Stevie Cohen. But Feinberg’s still successfully dodging the cameras.

2. He is the man of the financial moment:
Private equity is king! Make that hedge funds! Actually, make it both. Cerberus is the new vogue: a hybrid hedge-fund/private-equity firm.

3. He is the self-made success story.
It has been widely reported that Feinberg co-founded Cerberus (which now has $25 billion under management) in 1992 with just $10 million.

4. He is the proof of the endless cycle.
Feinberg is a veteran of Drexel Burnham Lambert, the place Michael Milken ruined, as are a handful of his colleagues, including Jeffrey Lomasky and Robert Davenport. So it took twenty years—who cares? The junk-bond guys are back on top!

5. He displays respect for the old.
Feinberg sent former Treasury secretary John Snow to Germany to announce the Chrysler deal. Sure, Snow has the title of chairman of Cerberus, but he’s chairman like Tinsley Mortimer is chairwoman of a benefit.

6. He’s connected enough to feed conspiracy theories.
Feinberg is a major Republican donor. Cerberus also owns a company called IAP World Services, whose president came from Kellogg, Brown & Root, which was spun out of Halliburton. And Donald Rumsfeld was an investor. Where to start?

7. And so he can beat Washington at its own game.
Cerberus has overtaken the Carlyle Group (John Major, George H.W. Bush) as the premier private-equity shop for ex–heads of state and CEOs. It boasts Snow, Dan Quayle, former Canadian P.M. Brian Mulroney, and ex-Chrysler COO Wolfgang Bernhard, thought to have been key to sealing the deal last week.

8. He’s thinking systematically.
Along with Chrysler, Cerberus owns a chunk of GM’s finance arm GMAC, Tower Automotive, and Vanguard Car Rental, owner of Alamo and National.

9. He is our eternal Wall Streeter, full of reassurances that are hard to believe or, certainly, enforce.
Chrysler’s CEO, Tom LaSorda, told employees that Cerberus told him that there were “no new job cuts planned in relation to the deal.” How about in relation to the day after the deal is done?

Have good intel? Send tips to intel@nymag.com.


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