Tenon Group has announced it will launch an asset management business, confident it can spot the best opportunities during economic downturns.
The AIM-listed UK accountancy firm, which has a financial adviser arm, is set to apply for FSA authorisation for Tenon Capital Management (TenonCap) which, it says, will seek to invest in companies where it can identify “routes to exit”.
Its first fund, the unregulated T-Fund, will invest in “distressed” businesses with turnaround potential and turnovers of between £5m and £30m.
Tenon says the vehicle aims to offer “profitable exits” for its investors, adding it anticipates it will be made available to institutional investors via IFAs.
Up to £1.5m will be invested in TenonCap by its parent company, with a further £250,000 coming from its directors. The business is seeking aggregate commitments of between £15m and £20m.
“Having seen several economic downturns we are greatly aware of the opportunities they can produce, TenonCap CEO Matthew Bowker says.
“We believe we are well placed to identify the best opportunities and to achieve successful turnarounds and profitable exits for our investors.”
TenonCap expects to generate returns from loan arrangement and redemption fees, interest received on loans advanced and capital returns on the disposal of equity.
It will seek to invest in companies where it can identify routes to exit, such as a management buy-out or buy-in, or an initial public offering (IPO).
It says it may access the resources of the wider Tenon Group companies to advise on the timing of disposal of investments, adding its four-man investment committee has “knowledge and experience” of the distressed business environment.
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