Cerberus Prepares for Life After Feinberg as Founder Heads to DC

(Bloomberg) — Steve Feinberg spent more than three decades building Cerberus Capital Management into one of the most aggressive players in private markets. As he heads to Washington to take the No. 2 job at the Defense Department, the firm he co-founded in 1992 is preparing for life without him.

Frank Bruno, a Cerberus veteran of more than two decades who was promoted to co-chief executive officer in 2018, will become sole CEO and run the company with an operating committee composed of senior executives, according to a person close to the firm. 

While Feinberg has been hands-on since the beginning, largely defining Cerberus by his vision and aspirations, executives expect little to change in the way it operates, the person said.

Feinberg, 64, who was confirmed by the Senate Friday, said at a hearing last month that that he would use his background in private equity investing to fix long-standing issues at the Pentagon.

“I have spent a career attacking these types of problems in the companies and assets we have managed,” the billionaire said in his policy answers ahead of the hearing.

Cerberus, with about $65 billion of assets under management, has dozens of executives who worked alongside Feinberg for decades, including Vice Chair Mark Neporent and Senior Managing Director Seth Plattus. About 100 senior employees have been there for more than 10 years. 

Feinberg, the firm’s principal owner, vowed to relinquish all responsibilities and divest his entire stake in Cerberus, including equity interest, carried interest, incentive fees and capital commitments. 

Cerberus had held discussions with Goldman Sachs Group Inc. to identify ways in which the billionaire could sell down his stake in the firm. In an ethics disclosure last month, Feinberg said the divestiture may include a gift to one or more irrevocable trusts established for his adult children. A person familiar with his plans said that he currently intends to put all of it in trust. 

In a separate filing, Feinberg listed assets worth at least $2 billion, most of it tied to Cerberus and its funds, and disclosed roles in 436 entities, most of them related to Cerberus. The Bloomberg Billionaires Index estimates his fortune is $5.3 billion. 

Feinberg, who served on Trump’s intelligence advisory board in 2018, has had a personal interest in national security, with Cerberus pouring money into defense-related companies over the past two decades. In 2023, the firm established Cerberus Ventures, which focuses on early-stage companies and aims to “redefine national security” through investments in artificial intelligence, health care and other fields, according to its website. 

“At Cerberus, we have bought dozens of companies involved in national security, many of which worked for DoD,” Feinberg said at his confirmation hearing. “So I have significant experience with the Pentagon as a contractor and understand how it functions and is organized.”

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