Cerberus has struggled mightily with its ill-fated investments in Chrysler and GMAC. As investors rushed to the exits (or tried to), Stephen Feinberg has certainly taken some PR lumps. But the news has not been all bad. Despite these miscues, funds of funds are still lining up to invest with the fund, apparently.

The company says that most of the nearly $5 billion in redemption requests came from fund managers who had to redeem other investors. The firm says demand is still healthy from individuals and institutions. It raised a $1 billion fund recently, and aims to raise more in the fourth quarter, reports Bloomberg. The new funds will be invested in--what else?--distressed assets. Stay tuned, as a lot is riding on these new funds, as Cerberus is aiming for redemption of a different kind. 

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