It’s going to be a long time before Cerberus Capital Management investors can see their money again, under the alternative investment giant’s plan to restructure its flagship hedge fund.

New York-based Cerberus, which bought automaker Chrysler LLC two years ago only to take a bath when it filed for bankruptcy this year, will offer investors two options for their investments in Cerberus Partners. Unfortunately for those investors, the crux of both is that they won’t be able to withdraw all of their money until 2013, Bloomberg News reports.

“We are embarrassed and disappointed by our 2008 performance, and we feel a huge obligation to turn this around,” Cerberus founder Stephen Feinberg wrote in a letter to investors last week.

Feinberg, however, feels no obligation to lift the redemption restrictions his firm imposed in December. Instead, he has offered investors who choose to stay in Cerberus Partners will have their the cash that become available over the next year allocated to a new fund, Cerberus Partners II, which will waive 60% of performance fees for two years after last year’s losses have been made up.

Investors who want out still can’t get out for four years, but will have their investments transferred to a holding company that will liquidate the assets over time. Those investors will be paid over time until 2013.