TenonCap launches first fund

17 November 2008

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Fund

Tenon Capital Management Ltd (TenonCap), the recently created fund management business of Tenon Group plc, has launched T-Fund I LP, a turnaround vehicle with a target of £15-20m. The fund has a lifespan of 5+5 years, but expects an investment period of three years. The minimum subscription is £50,000, further terms and conditions have not been disclosed. TenonCap expects a first closing early in 2009. Macfarlanes provided legal advice to the fund.

Investors

Tenon Group will be a cornerstone investor and commit up to £1.5m. The directors of TenonCap will invest up to a further £250,000. TenonCap expects most of its investors to come from Tenon Group's client base, among which are institutions and high-net-worth individual. The fund expects most of its investors to be based in the UK.

Investments

TenonCap plans to invest in distressed businesses with turnaround potential in the UK. It will acquire only majority stakes and has no sector preferences but will decide individually. The fund plans to target companies with turnover between £5-30m in which it will normally invest £1.5-2m. Over the expected three years' investment period, TenonCap plans to make about four investments per year. The fund plans to draw down 50% from its LPs on the first day of investing.

TenonCap anticipates the majority of its deals to come from its existing network and describes the market for turnaround investment as "good". TenonCap plans to generate returns from loan arrangement and redemption fees, interest received on loans advanced and capital returns on the disposal of equity.

People

TenonCap's CEO Matthew Bowker is managing the fund. Bridget Barker and Ed Kingsbury worked for Macfarlanes.

Name: T-Fund I LP

Target: £15-20m

Focus: UK, distressed companies

Contact: Matthew Bowker

Address: Tenon Capital Management Ltd

83 Baker Street

London

W1U 6AG

Tel: +44 207 034 7035

Advisers