Cerberus spin-out seeks $400m

Tenex Capital Management – a turnaround firm staffed by former executives from Cerberus Capital Management – is seeking to raise $400 million for its first fund. The firm will invest in underperforming mid-market companies in North America, according to marketing literature seen by PEO.

Tenex is headed by Michael Green, who was a member of Cerberus’ investment committee until 2009. He has been joined by five other senior executives from Cerberus, comprising Varun Bedi, a former senior vice-president at Cerberus, and four of Cerberus’ senior operations leaders: Chad Spooner, Helge Jacobsen, Joe Cottone and JP Bretl.

The genesis of the six-strong Tenex team was Tenx Capital Partners, a turnaround investment firm that was acquired by Cerberus in 2004 and subsequently became Cerberus Operations. Four of the team, including Green, had previously worked together at General Electric.

Focusing on investments of between $25 million and $75 million in Canada and the United States, the firm is targeting a return of 2.5x and a gross IRR of 25 percent. According to the fund’s marketing literature, the Tenex team has invested more than $900 million over the last 10 years, generating a gross IRR of 36.2 percent.

Cerberus is one of the largest private equity firms in the US, having raised around $15 billion of capital in the last five years. It is widely known for the highly politicised $7.4 billion buyout of US car manufacturer Chrysler. 

Tenex were unavailable to comment at press time.