UK AIM listed accountancy firm Tenon Group is to launch Tenon Capital Management, a fund management business that intends to apply to become authorised by the Financial Services Authority.  TenonCap intends to raise its first fund, T-Fund I LP, to invest in distressed businesses with turnaround potential, typically with turnovers of between £5 million (just over $8 million) and £30 million, capitalising on current economic conditions.

Tenon will be a cornerstone investor, with an expected commitment of up to £1.5 million.  The directors of TenonCap will invest up to a further £250,000. In total, TenonCap is seeking aggregate commitments of £15 million to £20 million.

The members of the TenonCap investment committee, Matthew Bowker, Andrew Raynor, Carl Jackson and Mark Lucas have a range of banking, financial intermediary and insolvency practitioner connections and, where appropriate, intend to draw on proprietary research support from Tenon Corporate Finance.

Tenon Recovery currently advises lenders and stakeholders in distressed trading companies, which TenonCap anticipates will provide investment opportunities. It expects to generate returns from loan arrangement and redemption fees, interest received on loans advanced and capital returns on the disposal of equity.

Exits may include trade or secondary sales, such as a management buy out or management buy in, or an initial public offering.