Taconic Capital Advisors has launched two new co-investment vehicles that are designed to take advantage of one specific attractive investment opportunity that reached capacity in Taconic’s main funds, according to a person familiar with the funds.
The New York hedge fund firm has raised about $175 million in commitments for the Taconic Sidecar Fund II. This is the firm’s second so-called sidecar, as the roman numeral indicates. It is not clear what the investment focus is for the new vehicle. In addition, Taconic raised about $200 million in commitments for the Taconic CRE Dislocation Onshore Fund and its offshore counterpart.
These vehicles are designed to take advantage of loans soon coming due within commercial mortgage-backed securities. These are also capital commitment funds, which means managers raise the funds and then draw on them when they are ready to make an investment.
Both the Sidecar and Dislocation funds are currently closed to investors. The firm declined to comment.
Taconic was founded by Frank Brosens and Kenneth Brody in 1999. They both previously worked at Goldman, Sachs & Co., where Brosens was a partner and once served as head of risk arbitrage and Brody was a general partner and member of the management committee. Brody retired from Taconic on January 1, 2014.
Taconic had a total of about $7 billion at the beginning of the year in its two main funds, Taconic Opportunity Fund and Taconic Capital Partners 1.5. This is down from $8.34 billion a year ago and $9.1 billion at July 1, 2014. The firm was said to be hurt by redemptions heading into the fourth quarter of 2015.
Last year the Taconic Opportunity Fund fell 1.7 percent in its onshore version and 2.1 percent in its offshore counterpart. They are event-driven, multistrategy funds. The much smaller event-driven funds — Taconic Capital Partners 1.5 and Taconic Offshore Fund 1.5 — were up 0.5 percent and 0.33 percent, respectively, last year.
In February 2013, Taconic launched its first Sidecar fund, which was designed to capitalize on investment opportunities created by the financial crisis in trade claims of Icelandic banks. Taconic charged a 0.25 percent management fee and 20 percent performance fee with an 8 percent preferred return, or hurdle. The new Sidecar funds are said to have a similar fee structure.
In August 2014, Taconic launched the Taconic European Credit Dislocation Funds, which were designed to capitalize on illiquid credit opportunities arising from the economic and financial crisis in Europe, particularly in Spain, where Taconic felt it had a sourcing edge, the firm told clients in its second-quarter 2014 letter, which was obtained by Alpha at the time. They also were capital commitment funds with set investment and harvest periods.
