Cerberus Capital Management leaves German banking in a hard situation earlier this year as it was expecting this to happen later.
The US private equity investor divested about two-fifths of its holdings in DeutscheBank and Commerzbank, for a loss of around 20%. The low profitability of this four-year investment highlights the difficulty of forcing change in large banks, as well as the limits of the group's own strategy.
Cerberus took over the stakes in 2017 under the lead of its co-Ceos Stephen Feinberg and Frank Bruno. Buying minority investments in listed banks seemed like an odd move for a private equity group, but there was some logic to the deal.
Deutschebank and Commerzbank were trading at markdown valuations of 50% and 40% of respective tangible book value.
A possibl...
