Taconic Capital Co-Founder to Retire

Kenneth D. Brody, a co-founder of the hedge fund Taconic Capital Advisors, plans to retire from his full-time role by the end of the year, he told his investors on Tuesday.

Mr. Brody, who turned 70 this year, will remain a principal and an adviser at the firm, as well as a “significant investor,” even as he steps away from his full-time responsibilities, he said in a letter reviewed by DealBook. The change is to take effect by Jan. 1.

A veteran of Wall Street who spent 20 years at Goldman Sachs, Mr. Brody is handing the reins to Frank Brosens, 56, who co-founded Taconic with him 15 years ago. The firm’s chief investment officer, Chris Delong, will work with Mr. Brosens in the day-to-day management of the investment team, Mr. Brody said.

“Frank and I have planned for this transition over a considerable period of time, keeping your interests paramount in the process,” Mr. Brody told his investors. “We are confident that the current strength of the Taconic organization makes this an ideal time to begin this transition.”

Taconic, a so-called event-driven fund with $8.2 billion under management, has logged “strong” results recently and is “well positioned with respect to both our investment team and our business function,” Mr. Brody said in the letter.

The firm’s pair of flagship funds, called Taconic Opportunity, is up about 13 percent through October, a person briefed on the matter said. Mr. Brody’s retirement does not trigger any redemption clauses, this person added.

As for his own plans, Mr. Brody said he would devote more time to working with nonprofit organizations focused on the well-being of young people.

A graduate of the University of Maryland who received an M.B.A. degree from Harvard, Mr. Brody rose to join the management committee at Goldman before leaving the firm in 1991. He turned to politics, leading Bill Clinton’s fund-raising effort in 1992 for the New York primary.

Tapped by Mr. Clinton to run the Export-Import Bank, Mr. Brody was credited with transforming the formerly lethargic government agency. Mr. Brody has also been an informal adviser to Lawrence H. Summers, who did consulting work at Taconic from 2004 to 2006.

Mr. Brody and Mr. Brosens, himself a former Goldmanite, aimed to capture some of the culture of Goldman when they started Taconic, Mr. Brody said in the letter on Tuesday.

“We felt strongly about creating an economic model that provided for, among other things, a broad distribution of firm economics and no permanent equity,” Mr. Brody said. “I believe we have accomplished these things and more.”