TTAC Outs Chrysler Investors. For Real.

I'm late to this conversation, but this sure sounds like some sort of conspiracy theory group. Cerberus is a private equity firm which is pretty much like it sounds. They take in private (read individual, not secretive) investments and then use that pool of capital to purchase or invest in companies. I am no expert in the PE world, but have worked with a few in a consulting role. If you have enough money, it is relatively simple for anyone to become an investor in a private equity fund. Depending on the PE company, the hurdle could be tens or hundreds of thousands or even millions. Investors could be the rich who are looking for additional opportunities outside the stock market, or pension funds, colleges, etc. There is nothing at all nefarious about the multiple funds that some people seem to think means something. PE firms start up new funds periodically to raise a chunk of money and it is generally invested separately from previous funds. Basically, they will decide to start, say, a new $100 million dollar fund and when they get that amount raised, they start buying and selling portfolio companies or portions of them. If you are bought into Fund 4, you win or lose based on that portfolio's performance. What happens in Fund 3 really is irrelevant to you as an investor. After some period of buying, holding, and selling companies the fund is, many times, finished after the last sale and the profits (hopefully) disbursed to the investors. Some PE firms are specific in the types of investments they make, such as retail, manufacturing, etc. and sometimes the individual fund will be as well. Other times the fund is made up of a mix of different portfolio companies. Generally speaking, PE firms are looking for distressed or undercapitalized companies that can be turned around or merged into other portfolio companies to create synergies. Or perhaps a division can get spun off into a more successful standalone company if it isn't encumbered or overshadowed by the current parent. Once they become successful (by whatever criteria) they could go public or be sold to private investors or another PE firm. People seem to want to make Private Equity out to be some sort of exotic investment vehicle, but it is probably the closest to "pure" investing there is outside of buying a company yourself. A bunch of people pool their money in a PE fund and then their (the PE firm's) smart people figure out what companies to buy and how they can improve them so that they can be sold for more later.