Frank Brosens, co-founder of Taconic Capital, recounts his founding rationale for sharing firm economics broadly with partners rather than concentrating profits among founders.
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“If we create a firm where we distribute the economics pretty broadly, Amongst all the partners, we'll be able to attract and retain a level of talent that we won't be able to do in a firm where we take most of the economics.”
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More from Frank Brosens
Disclosure
Brosens: Taconic has an 'anti-Goldman clause' diverting 30% to charity if sold
“So we put in a clause which has been Referred to by one of our investors as the anti-Goldman clause, where if the firm ends up either going public or selling at some point down the road, 30% of the economics effectively gets carved out and goes to Ken's and my…”
Frank BrosensNov 21, 2022▶ 27:35Frank Brosens – Culture and Partnership at Taconic Capital (Capital Allocators, EP.282)
“If you were sitting next to someone and you were getting paid purely as an eat what you kill system, you not only have no interest in whether or not the guy sitting next to you makes money, you actually want them to do poorly because if they do poorly, you get…”
Frank BrosensNov 21, 2022▶ 30:06Frank Brosens – Culture and Partnership at Taconic Capital (Capital Allocators, EP.282)
Disclosure
Brosens: Taconic founders capped equity below 20% and zero out upon retirement
“Neither Ken nor I really right from the start took as much as 20% of the economics. There was a large percentage of economics available for the people that really drove the profitability. In addition, they knew that when Ken and I eventually retired, our econo…”
Frank BrosensNov 21, 2022▶ 31:17Frank Brosens – Culture and Partnership at Taconic Capital (Capital Allocators, EP.282)
PredictionNot checkable as stated
Brosens: Markets will not return to excess Fed liquidity after inflation subsides
“I personally don't think that we're going to be heading into a period of excess liquidity for quite some time. I think the expectations that once inflation's under control, we're going to go back to the Fed as it was before, I think is less likely to be the ca…”
Frank BrosensNov 21, 2022▶ 44:02Frank Brosens – Culture and Partnership at Taconic Capital (Capital Allocators, EP.282)
AssertionNot checkable as stated
Brosens: Goldman Sachs was considered a 'middling firm' early in his career
“It was viewed as kind of a middling firm at the time. The big firms at the time were First Boston, Morgan Stanley. The banks really weren't players in the space. JP Morgan wasn't really considered a competitor. There were other smaller firms, Bear Stearns, et …”
Frank BrosensNov 21, 2022▶ 8:28Frank Brosens – Culture and Partnership at Taconic Capital (Capital Allocators, EP.282)
Insight
Brosens: Managing partner capital drives tighter risk discipline than upside-only fees
“The second aspect of it, and I think this was really important and something that we tried to Bring to Taconic was the fact that at Goldman, it was the partner's capital. It wasn't other people's money. And that drove a very different philosophy with respect t…”
Frank BrosensNov 21, 2022▶ 15:47Frank Brosens – Culture and Partnership at Taconic Capital (Capital Allocators, EP.282)
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