Many pundits thought Cerberus Capital would be the mythical savior of Chrysler. As the months unfold though it appears likely that Cerberus is more like its namesake, a demonic dog.

Cerberus Capital Management has been humbled in recent weeks by woes at two of its larger investments, automaker Chrysler and auto and mortgage lender gmac.

The Washington Post is reporting that those companies' problems are merely among the most prominent in a series of bumps affecting one of the giants in private equity.


GMAC and its Residential Capital LLC mortgage unit suffered large credit downgrades from Standard & Poor's. Cerberus bought a majority stake in GMAC from General Motors Corp, the largest U.S. automaker, in 2006.

A Cerberus spokesman said the firm remains "enthusiastic" about Chrysler, which he said is on track to exceed its long-term targets "on all key metrics." He also called GMAC "a resilient business platform with strong long-term growth prospects." Chrysler is a key focus, after Cerberus last August acquired an 80.1 percent stake from Daimler in a $7.4 billion transaction, taking on an estimated $18 billion of pension and health-care liabilities. It installed former Home Depot Ichief Robert Nardelli to run the automaker. The Wall Street Journal in December said Nardelli confirmed he told employees in a meeting that month that Chrysler, which is cutting thousands of jobs, was "operationally" bankrupt. In January, Chrysler sales declined 12 percent as demand fell for pickup trucks and SUVs. On Feb 8, Chrysler President Jim Press said the automaker plans to shrink its dealer network and eliminate slow-selling models.

GMAC, which was once a profit center at GM's otherwise troubled operations, is another area of concern. Cerberus led a group that bought 51 percent of the company, which provided auto loans and mortgages. But the U.S. housing crisis led to a $2.33 billion loss at GMAC in 2007.