Nardelli steps down at Cerberus

Robert Nardelli has stepped down from his role at the head of Cerberus Operations and Advisory Company, the management consulting affiliate of Cerberus Capital Management, to focus on his new consulting business XLR-8. 

Nardelli will retain a role at Cerberus as a senior advisor to the firm’s chairman, Stephen Feinberg, according to a statement. “Long-time Nardelli protégé” Chan Galbato will take over for Nardelli as the chief executive officer of COAC. 

Robert Nardelli

Cerberus declined to comment on this story. 

“I informed Steve Feinberg that I desired to make this transition to a role as senior advisor in order to devote attention to XLR-8, my investment and consulting company. This is a great time for me to focus on XLR-8 and leverage my 41 years in a variety of businesses and sectors and my recent private investing and advisory experience with Cerberus and COAC, to raise money to acquire underperforming companies,” Nardelli said in a statement. “Cerberus will be a lead investor in many of these opportunities and I look forward to working with them closely.”

Nardelli joined Cerberus in 2009 to oversee COAC after stepping down as the head of Chrysler, one of Cerberus’ most notoriously troubled assets. The firm had acquired the Detroit automaker in 2007 for $7.4 billion, reportedly leading a group of about 100 co-investors on the deal. Nardelli was tapped to lead the company shortly afterward.

Upon taking control of Chrysler, Nardelli took a widely publicised salary of $1 – along with other compensation that was not publicly disclosed. He had resigned from his position as Home Depot’s CEO earlier that year over controversy surrounding his compensation in relation to the retailer’s struggling performance. Nardelli was granted a $210 million retirement package by the home supply retailer upon his resignation.  

Chrysler struggled under Cerberus’ watch as the US economy nosedived after the collapse of Lehman Brothers in 2008. The company declared bankruptcy in 2009 and emerged from Chapter 11 with help from the US government. Cerberus “donated” its equity in Chrysler to help the company restructure. 

The performance of Chrysler, along with former General Motors investment arm GMAC Financial, required Cerberus to request an extension of the investment period on its fourth fund from LPs. In 2009, Fund IV had been generating a negative 10.13 percent IRR, according to the Public Employee Retirement System of Idaho.

Since then, Cerberus has put the fund back in the black, generating a 7.92 percent IRR as of 31 March, 2011, according to California State Teachers’ Retirement System documents.  

Cerberus is in the process of raising its fifth private equity fund, targeting $3.75 billion. Last week, The firm received a $200 million commitment from the Pennsylvania Public School Employees’ Retirement System.