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Taconic Capital Advisors Review

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Overseeing more than $9 billion in assets, 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

 

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.  

Disclosures

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.  

Where Is Taconic Capital Advisors Located?

Taconic’s headquarters and U.S. office is located at  280 Park Avenue, 5th Floor,  New York, New York 10017.

Tips for Finding the Right Financial Advisor

  • Don’t have $1 million to invest? There are plenty of advisors who work with smaller investors. To narrow your search, use SmartAsset’s financial advisor matching tool, which will recommend three local advisors after you answer a few questions about your current situation. The process takes about five minutes. 
  • Talk to at least three potential advisors before deciding on one. This should give you enough information to compare and contrast. Ask about fees, certifications and conflicts of interest. For more pointers, check out our report on the 5 questions to ask when choosing a financial advisor. 

 

All information was accurate as of the writing of this article.

 

How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about the cost of living in retirement for that location.

Least
Most
Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology To determine how long a $1 million nest egg would cover retirement costs in cities across America, we analyzed data on average expenditures for seniors, cost of living and investment returns.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. This reflects the typical return on a conservative investment portfolio. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research