Cerberus Capital Management LP on Tuesday dismissed market speculation that some of its hedge funds, which have suffered losses and heavy redemptions, are in danger of default.
Traders in London and Frankfurt were buzzing with talk that a major hedge fund was headed for default. Much of the talk was directed at Cerberus , a private equity and hedge fund firm hit hard by losses on investments in Chrysler and GMAC.
There is absolutely no truth to the speculation, said Tim Price, a Cerberus managing director and spokesman for the firm.
High-profile investment losses prompted investors recently to seek the withdrawal of $4.77 billion from two Cerberus hedge funds. That amount represents about 60 percent of the $7.9 billion managed by Cerberus Partners LP and Cerberus Institutional LP, and 19 percent of Cerberus' total $24.3 billion in assets.
(Reporting by Joseph Giannone; editing by John Wallace)