Convexity Capital Management will begin trading later this month with $6 billion under management - the largest launch ever for a hedge fund - even without Harvard University as a client, confirmed sources with knowledge of the company. The company was formed late last year by Jack R. Meyer, former president and CEO of Harvard Management Co. and 30 of his colleagues, and has targeted endowment and foundation investors, said sources. Mr. Meyer declined to comment on activities of the new firm.
Harvard has committed up to $500 million from its endowment to Convexity but has not funded the allocation, said John Longbrake, spokesman for the university and HMC. HMC manages the university's $26 billion endowment using internal and external management.
Mr. Longbrake said Mohammed A. El-Erian, Mr. Meyer's replacement at HMC, likely will join the firm later this month. Mr. El-Erian is a managing director and head of the emerging markets portfolio management team at Pacific Investment Management, where he manages emerging-market debt investments of more than $28 billion.