New Jersey expands commitment to Tenex

After acquiring a $5.8m fund stake from another investor and assuming $14.2m in uncalled commitments, New Jersey’s Division of Investment now has a 15.5% stake in Tenex’s debut vehicle.

The New Jersey Division of Investment has acquired a secondary commitment to Tenex Capital Partners, spokesman Andrew Pratt told Private Equity International. 

The $72.4 billion pension fund acquired a $5.8 million stake from another investor at cost as well as assuming an additional $14.2 million in uncalled commitments. The new $20 million stake is on top of the $50 million New Jersey invested in 2010, bringing its total commitment to Tenex’s debut fund to $70 million, according to documents. 

The State Investment Council approved the $20 million commitment at its Wednesday meeting, Pratt said. With its new commitment, New Jersey now holds a 15.46 percent stake in the fund. 

In a memorandum to the SIC, the Division of Investment recommended the commitment based on several factors, including the firm’s alignment of interest with its LPs. 

The $452.7 million fund has a 2 percent management fee on committed capital, with a 1 percent fee on invested capital after the initial investment period. When New Jersey made its initial commitment in 2010, the state was able to negotiate carry down to 16 percent from 20 percent. 

Transaction, break-up and other fees are offset 100 percent against the management fee, according to documents. The firm has committed 3 percent to the fund, above average relative to other funds in the market, according to New Jersey. 

The firm held a final close on the fund last year, having received commitments from New Jersey, the New Mexico Educational Retirement Board and the University of Washington to beat its $400 million target. 

Tenex was founded in 2009 as a spinout of Cerberus Capital Management. The firm is led by Michael Green, who was responsible for building Cerberus’ operating platform. In addition to Green, former Cerberus executives Varun Bedi, JP Bretl, Joe Cottone and Chad Spooner are key men on the fund.