CRE team and $200 million commercial real estate fund transition
Taconic Capital Advisors is winding down its commercial real estate (CRE) division, transferring leadership and a key fund to Axonic Capital.
James Jordan, head of Taconic’s CRE business, will leave the firm in the first half of 2025 to join Axonic as a partner, according to people familiar with the matter.
Taconic is in advanced talks to transfer its CRE Dislocation Fund IV, which holds $200 million in commitments, to Axonic. Under the agreement, Taconic would retain a share of the fund’s revenue. Discussions are ongoing and not yet finalized.
Taconic’s decision to close its commercial real estate operations is part of a broader effort to concentrate on its core strategies of merger arbitrage and corporate and structured credit. The firm has side-pocketed its CRE positions from its $2.9 billion flagship Opportunity Fund, aiming to manage those assets toward optimal exits.
“We are in the process of working with James to transition the management of our legacy CRE investments to a team focused entirely on managing these assets to optimal exits,” Taconic said in a letter.
Taconic’s first three CRE Dislocation funds, which collectively manage $800 million, will remain with the firm but are in “harvest mode” to return capital to investors.
Axonic Capital, which specializes in commercial and residential real estate as well as securitized credit and commercial lending, views the acquisition as an opportunity to expand its presence in a rapidly evolving market.
“We see an extraordinary opportunity in the CRE market as the asset class undergoes a period of transformation and dislocation,” Axonic co-chief investment officer Clayton DeGiacinto said in a statement.
Jordan will report to Axonic’s co-CIOs and work closely with Jonathan Salter and Erik Nygaard, who lead the firm’s liquid and illiquid CRE businesses. Additional members of Taconic’s senior real estate team are expected to join Axonic at a later date.
The US commercial property market continues to face challenges as higher borrowing costs weigh on valuations and lenders contend with borrowers’ difficulties in addressing valuation gaps. Taconic’s CRE unit, which previously managed more than $3 billion in direct real estate investments, specialized in event-driven and relative-value opportunities in both public and private markets.
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Axonic, which manages about $6 billion in assets, sees the current market dislocation as a chance to capitalize on distressed and transitional real estate opportunities. Taconic, also managing $6 billion, will focus on its hedge fund operations as it exits CRE.
The exact timing of Jordan’s departure from Taconic has not been finalized, though he will retain an advisory role during the transition. Some team members will remain at Taconic temporarily to assist in the handover process.
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