Culture and Partnership at Taconic Capital

Frank Brosens is a co-founder of Taconic Capital, an $8 billion event-driven, multi-strategy hedge fund founded in 1999. Frank started his career at Goldman Sachs, where he joined and later ran Bob Rubin’s legendary risk arbitrage desk. That group became one of the top breeding grounds for hedge fund founders, including among its ranks Tom Steyer at Farallon, Richard Perry at Perry Partners, Danny Och at Och-Ziff Capital, Eddie Lampert at ESL, Eric Mindich at Eton Park, and Dinakar Singh at TPG-Axon.

Our conversation covers Frank’s path to the Goldman risk arb desk, the culture that made it a success, and his eventual decision to leave the firm. We then discuss the founding of Taconic, its partnership and investment philosophy, and its approach to risk management, capital allocation, and the pursuit of opportunities. Along the way, Frank highlights examples that demonstrate the benefits of a carefully aligned culture for teammates and clients across organizational structure, portfolio management, and compensation.

Show Notes
5:59 Frank’s background
10:53 Bob Rubin’s risk arb desk
14:50 Leadership lessons
20:13 Decision to leave Goldman Sachs
23:49 Vision for Taconic Capital Partners
26:41 Creating stability for partnerships
28:23 Attracting and retaining talent
31:46 Investment strategy
33:21 Growing new businesses
35:17 Risk management in volatile markets
39:50 Paying to hedge the left tail
43:46 Organizing a nimble team
45:33 Position sizing
46:58 Implementation of dislocation funds
49:26 Positioning for macro factors
51:01 Closing questions