Frank Meyer: The skill of investing with the right managers early on

Frank Meyer is one of the pioneers and legends in the hedge fund industry. In this Opalesque FIVE Minutes, Meyer recalls how early he started to study and invest in hedge funds - already in 1973 he formed his first hedge fund of funds.

In 1988 he formed Glenwood Capital which he later sold to Man Investments. In 1990 Frank Meyer seeded a young upcoming manager with $1m who started trading out of his college dorm room – Ken Griffin. Meyer also convinced Griffin to move to Chicago where Griffin then founded Citadel Investment Group.

Frank Meyer explains in this Opalesque FIVE Minutes what seed or early investors should look out for when allocating to young managers. In particular, he suggests a different risk paradigm and evaluation procedure when looking at emerging managers: “Most people make a big mistake by focusing too much on past returns,” says Meyer. He reveals his own approach and thought process which allowed him to invest with the right managers early on, instead of looking at track records that “were earned on someone else's money previously”.

Frank Meyer explains three major aspects how the hedge fund industry has changed over almost four decades and ends this interview with his positive assessment about the future of the industry. He points to a number of opportunities, for example by focusing on delivering attractive after tax returns for individual investors.