The University said goodbye to Jack R. Meyer, the former CEO of Harvard Management Company (HMC), on Friday. But it wasn’t goodbye for good.

Meyer and his departing associates will continue to receive paychecks from Harvard as advisors to HMC and as managers of one of the many hedge funds in which HMC invests.

Meyer’s new hedge fund, Convexity Capital Management, will receive $500 million from HMC, according to University treasurer James F. Rothenberg ’68.

The $500 million allocation to Meyer’s new fund is small compared to previous allocations to departing HMC fund managers.

When Jeffrey B. Larson, a former foreign equities CEO at HMC, departed to establish his own hedge fund, his fund received $700 million from Harvard.

Meyer’s considerably more significant departure—he left with 30 of HMC’s 175 employees, including four top managers—garnered his fund a lesser amount of money.

According to Rothenberg, the relatively small allocation of money from the University came as a result of a reluctance on Meyer’s part to have Harvard be an “unduly large portion” of the fund’s capital.

When Robert Atchinson and Philip Gross, former HMC vice presidents of select equity, and Frank Dunau, another former HMC employee, left HMC in 2001 to form Adage Capital Management, the University gave them $1.8 billion.

Jon Jacobson, former HMC vice president of equities, received $500 million when he left HMC in 1998 to form Highfields Capital Management.

Rothenberg also said that Meyer will be contracted as a paid advisor to HMC for now.

“What we had arranged for, at least initially, is that Jack and the departing managers will continue to have a role working for us kind of as a sub-advisor for some time,” Rothenberg said.

Rothenberg declined to provide details regarding the nature and length of Meyer’s advisory role. Meyer did not return calls seeking comment yesterday.

Meyer’s firm, Convexity Capital Management, traces its name to a bond term that describes the convex relationship between price and yield for bonds. Meyer’s fund is expected to focus on bonds as two of the top managers that Meyer took with him—David Mittelman and Maurice Samuels—were renowned bond traders at HMC. Mittelman and Samuels were also the two highest paid managers at HMC in the past two fiscal years.

Edward DeNoble, former HMC vice president for emerging markets, and Michael Pradko, former HMC chief risk officer, have also departed HMC to manage Convexity.

Rothenberg said he expected Convexity to launch in 2006.

—Zachary M. Seward contributed to the reporting of this story. —Staff writer Alexander H. Greeley can be reached at agreeley@fas.harvard.edu.