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ALTERNATIVES

Cerberus’ Steve Feinberg in talks to leave for role under Trump

President Donald Trump
President Donald Trump

Cerberus Capital Management's Steve Feinberg is in discussions to join Donald Trump's administration in a senior role, a move that would boost another private equity executive to the top ranks alongside the president.

Cerberus' billionaire co-founder and CEO has told the administration he's willing to take a senior position, the firm wrote in a letter to investors Thursday, a copy of which was obtained by Bloomberg. Cerberus told clients it has a succession plan in place that would result in “minimal changes” if Mr. Feinberg leaves, without elaborating on who would succeed him.

“Following the election, Steve has had discussions with the president's senior transition staff about potentially joining the administration in a senior role,” the firm wrote.

Mr. Trump has surrounded himself with private equity titans. Billionaire Wilbur Ross is his commerce secretary nominee, and in December, Mr. Trump named Blackstone Group CEO Stephen Schwarzman as chairman of the President's Strategic and Policy Forum. Colony NorthStar Chairman Tom Barrack was chairman of Trump's inaugural committee.

Mr. Feinberg was one of 13 original members named to Trump's economic advisory council in August, and last year he gave $339,400 to Trump Victory, according to Federal Election Commission records. Trump Victory was a joint fundraising committee between the Republican National Committee, Mr. Trump's campaign and several state Republican parties.

If he were to join the administration, Mr. Feinberg could apply for a “certificate of divestiture,” which would allow him to defer capital gains taxes on certain assets he liquidated to comply with ethics requirements. To qualify for deferral, which is available to eligible appointees, his wealth would have to be reinvested in certain approved investments, such as mutual funds.

Mr. Feinberg started Cerberus with William Richter in 1992 and has built the firm to manage more than $30 billion. Cerberus initially specialized in distressed debt investing before branching into leveraged buyouts.

Cerberus waded into controversy over its investment in Remington Outdoor Co. after a Bushmaster rifle made by the gunmaker was used in the 2012 massacre at Sandy Hook Elementary School in Connecticut. Some of the firm's biggest fund investors, including the $196.4 billion California State Teachers' Retirement System, West Sacramento, pressured Cerberus to either sell the business or buy them out. The firm eventually agreed to buy out clients who wanted to divest.

Cerberus has several government ties already. Former U.S. Vice President Dan Quayle chairs the global investments business and former Treasury Secretary John Snow is the firm's chairman.

Liz Micci, an outside spokeswoman for Cerberus, confirmed the contents of the letter sent to investors Thursday.