Cerberus’ Feinberg sees smaller fund size ahead

By Megan Davies

BOSTON, (Reuters) – Cerberus Capital Management sees a benefit to private equity firms having smaller fund sizes and expects to reduce its fund size in the future, co-founder Stephen Feinberg said in a rare public appearance Tuesday.

Large funds sometimes draw criticism from investors in private equity for being potentially less motivated to make money as the funds generate so much in fees.

“I do think there’s an issue here in funds that are too large and funds that have acquired too many assets under management,” Feinberg said at the SuperReturn private equity conference in Boston.

“The best way to do it is to have a large company infrastructure and have all the people that can really provide the breadth and depth … people who can look at a small or midmarket opportunity without worrying about the size … but still have a fund size that is reasonable,” said Feinberg, who gives interviews infrequently and has been photographed only a few times by news photographers.

Cerberus raised a $7.5 billion fund in 2007. (Reporting by Megan Davies, editing by Dave Zimmerman)