The Hedge Fund Report: Graduating From Harvard

It didn't take long for someone to set a new record for the biggest hedge fund launch. Jack Meyer, the former manager of Harvard's endowment, raised $6 billion for his new fixed-income fund, Convexity Capital.

Meyer beats Eric Mindich, the former Goldman Sachs(GS Quote) luminary, who raised $3 billion for his Eton Park fund last year. During his 15 years at Harvard's $26 billion endowment, Meyer gained a reputation as one of the best hedge fund investors in the country. He dragged 30 people from Harvard along with him to Convexity.

What Worked

Tremont Capital Management reported that three strategies -- global macro (bets based on macroeconomics views), emerging market and dedicated short bias -- attracted the greatest amount of net assets in the fourth quarter.

The Tremont study found inflows of $1.2 billion for global macro; $600 million for emerging markets and $30 million for short-bias in the three months to Dec. 31. Event-driven, long/short equity, managed futures and multi-strategies remained flat while convertible arbitrage and equity market neutral continued to lose assets.

All Along

The global equity market is good, so when you are a top-notch stock picker, why not create a long-only fund, call it a hedge fund, and cash in? It makes sense, even if some purists argue that a hedge fund manager by definition should hedge his buys with shorts. But Okumus Capital Management has nothing to prove to anyone and is jumping into the bullish fray, as first reported by hedge fund publication Alternative Universe.

What this $750 million hedge fund manager is doing now is taking the long component of its hedge fund and selling it as a separate vehicle to investors. The domestic, or "on-shore," class launched earlier this month.

Investors insisted that they wanted a long-only vehicle, says Ibrahim Okumus, cousin and partner of founder Ahmet Okumus. The other solution was to offer them managed accounts, but the firm did not want to bother with extra back-office work, he says.