Taconic Capital Advisors provides investment management services to onshore and offshore private funds. These hedge funds are available only to institutional clients and financially sophisticated, high-net-worth investors.
In other words, the firm does not work with the general public. To find a financial advisor who can fit your needs, use SmartAsset’s pro matching tool. It recommends up to three advisors in your area after you answer a few questions about your current situation and goals.
Taconic Capital Advisors Background
Former Goldman Sachs partners Kenneth D. Brody and Frank P. Brosens launched the firm in New York in 1999. Brody left in 2013 - and started Sutton Square Partners two years later. Today, Taconic has offices in London and Hong Kong and employs more than 100 people, including 40 advisors.
What Types of Clients Does Taconic Capital Advisors Accept?
Taconic provides investment management services solely to private investment funds. These funds are available mainly to institutional investors such as government and profit-sharing plans, investment companies and business entities.
U.S. investors in Taconic hedge funds must be accredited investors as defined by the Securities Act of 1933 or qualified purchasers as outlined in the Investment Company Act of 1940. When it comes to certain funds, the investor may be required to be a qualified eligible person within the context of the Commodity Exchange Act.
Taconic does not manage any separate accounts for individual clients.
Taconic Capital Advisors Minimum Account Size
The minimum capital contribution or subscription to invest in a fund managed by Taconic is generally $1 million. At its discretion, though, the firm may require larger minimums or accept smaller ones.
Services Offered by Taconic Capital Advisors
As noted before, Taconic manages hedge funds. The firm’s Event-Driven Funds and Opportunity Funds currently invest in mergers and acquisitions, corporate restructurings and spinoffs, credit investments and/or capital structure arbitrage. The firm also manages different opportunistic funds designed to capitalize on specific investment opportunities.
Taconic Capital Advisors Investment Philosophy
The firm’s primary focus is on event investing, which it defines as investing in “securities and instruments of companies undergoing extraordinary events that are expected to affect the value of one or more securities of a company.”
Taconic also says that it utilizes “a bottom-up, research-driven, distributed decision-making approach to probabilistic investing.” With each investment idea, it considers these four factors:
- Probability that the anticipated event will occur
- Expected value of the investment if the anticipated event does occur
- Expected value of the investment if the anticipated event does not occur
- Timing of the anticipated event
The firm states that the key to its process involves analysing all available relevant information, valuation of companies and understanding the behaviors of major players such as corporate executives and boards of directors.
Fees Under Taconic Capital Advisors
Taconic receives management and performance-based fees from the funds it manages. Here’s the current publicly available information regarding them:
Opportunity Funds
Management Fee
- Non Lockup Option: 1.5% of net assets
- Two-Year Lockup Option: 1.0% of net assets
- Three-Year Lockup Option: 0.75% of net assets.
Performance Allocation
-Non or Less-Than-Three-Year Lockup Option: 20% of each investor’s net annual profits deducted yearly
-Three-Year Lockup Option: no performance fee is earned until a particular hurdle rate has been exceeded, at which point the General Partner receives a 100% catch-up allocation (and thereafter 20%)
Event-Driven Funds
Management Fee
- Non Lockup Option: 1.5% of net assets
- Two-Year Lockup Option: 1.0% of net assets
- Three-Year Lockup Option: 0.75% of net assets
Performance Allocation
-Non or Less-Than-Three-Year-Lockup Option: 20% of each investor’s net annual profits
-Three-Year Lockup Option: no performance fee is earned until a particular hurdle rate has been exceeded, at which point the General Partner receives a 100% catchup allocation (and thereafter 20%)
Taconic offers management fee and performance allocation rate breakpoints for investors (together with related investors) who have at least $150 million in the Opportunity and/or Event-Driven Funds.
TCRED Funds
Management Fee
- Capital commitments of $100 million or more: 0.75%
- Initial closing capital of less than $100 million and final closing capital of $25 million or greater but less than $100 million: 1.25%
- Final closing capital of less than $25 million: 1.5%
Performance Allocation
-Capital commitments of $100 million or more: 15% carried
interest with an 8% preferred return and catchup
-Initial closing Capital of less than 100 million and final closing capital of $25
million or greater but less than $100 million: 18% carried interest with an 8%
preferred return and catchup
- Final closing capital of less than $25 million: 20% carried interest with an 8%
preferred return and catchup
TCRED II Funds
Management Fee
-1.5% of net invested capital
Performance Allocation
-20% carried interest with an 8% preferred return and
catch-up
TCRED III Fund
Initial closing management fee -- 1.25% for each limited partner
Subsuquent closing managemenr fee -- 1.50% for each limited partner
Performance fees: 20% carried interest with 8% preferred return and catchup.
What to Watch Out For
Taconic soley advises private investment funds available to a very exclusive group of clients. So if you aren’t an accredited investor or other type of investor with substantial assets, this may not be the right firm for you.
Since its inception, Taconic has not been the subject of disciplinary or legal events that would be material to a potential client's evaluation of the firm’s business.
Opening an Account With Taconic Capital Advisors
To contact Taconic, call (212) 209-3100 or send an email to general-inquiries@taconiccap.com.
Tips for Finding the Right Financial Advisor
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All information was accurate as of the writing of this article.
