Taconic Capital Advisors has launched a new hedge fund.
On April 1, the event-driven multistrategy firm trotted out the Taconic Merger Arbitrage Fund and an offshore equivalent, according to several regulatory filings.
Taconic declined to comment, but a regulatory filing reveals that the new fund will focus on event investing. The firm describes this strategy as investment 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 believes that the merger arbitrage space will continue to offer attractive risk/reward opportunities, driven largely by a complex regulatory backdrop globally. The firm is targeting a cap of $1 billion for the new fund and is offering a founder’s class for the first $250 million, according to someone familiar with the launch.
The new fund will be headed up by Margaret Jones, who has been managing the firm’s merger arbitrage portfolio for the Taconic Opportunity Fund since July 2014. She is also on Taconic’s investment and portfolio risk committees and previously served as portfolio manager for Taconic’s Merger Dislocation funds.
Taconic has been investing in merger arbitrage since its inception in June 1999. The strategy is one of several deployed by the firm’s Opportunity funds. The funds emphasize credit investments, equity investments with a catalyst, and capital structure arbitrage/hedged credit investments.
The Taconic Opportunity Offshore Fund was up about 2.3 percent in the first quarter of this year and approximately 5 percent in 2023, according to a source who has seen the results.
Taconic notes on its website that the global arbitrage strategy combines in-depth legal and regulatory knowledge with fundamental analysis to create consistently attractive risk-adjusted returns. “We employ a probabilistic approach to traditional merger arbitrage and pre-event situations,” it adds. “We also invest in share class arbitrage and holdco structures.”
Taconic was founded by Goldman Sachs alums Frank Brosens and Kenneth Brody in 1999. Brody retired in 2013 He died in March 2023 at age 79 after a battle with multiple system atrophy, a neurodegenerative disease, according to his obituary.
Taconic currently manages about $6 billion and invests in a wide number of strategies, including merger arbitrage, opportunistic credit, catalyst-driven equities, and real estate. It also has a co-investment platform.