You might think, judging from the plentiful memorabilia scattered about his office, that Carl Tiedemann is resting on his laurels. Au contraire.

At a time when many of his contemporaries are enjoying the fruits of their labors, Mr. Tiedemann, founder and chairman of Tiedemann Investment Group (TIG), is actively engaged in the ever-so-youthful hedge fund business.

Not only does Mr. Tiedemann run a fund-of-funds, and oversee nine other funds, but he is also patiently building a whole new business – a trust company that can actually manage money effectively. What a notion!

Mr. Tiedemann started his investment firm after a distinguished career at Donaldson, Lufkin & Jenrette. He was chairman of DLJ Securities from 1968 to 1974 and then became president of DLJ Inc. He continued on that illustrious firm’s board for many years, while also serving on numerous other boards, including that of Nikko Securities International, Lexington Management and the AMEX.

Over time, Mr. Tiedemann has developed an unusual model for building his business. Instead of trying to train managers and develop investment disciplines in-house, TIG seeks out small successful funds and brings them on board as partners.

TIG currently sponsors (and houses) 10 hedge funds, each with a distinct investment strategy. Each fund manager is a general partner of TIG, and each came to the firm with a proven track record. The managers operate independently and are compensated both on the basis of individual performance and on the basis of how well the firm overall is doing.

Mr. Tiedemann is pleased that few managers leave the firm, and that he has established a collegial workplace in an individualistic business. The managers meet weekly to talk through investment ideas and compare notes, but none is subject to oversight from on high.

As it happens, many small fund managers who are on their own end up feeling isolated. Since quite a few have come from large investment banks, they are used to a certain amount of fraternization (or armed combat), not to mention support systems.

TIG provides, for this group, the best of both worlds. They have access to centralized trading, compliance and other services such as risk management and marketing. But no one second guesses their portfolio decisions.

The 10 funds currently have approximately $1.3 billion invested, and are doing quite well. Year-to-date, Mr. Tiedemann estimates that only one fund is down (about 4%), while most are ahead 3%-5%.

A new fund, Tiedemann Falconer, is ahead 22% year-to-date. Falconer provides a good example of how TIG works. It is an “opportunistic long/short” fund run by Tim Maxwell, who started his career at Gardner Lewis Asset Management in Philadelphia.

After five years of learning the trade he went out on his own, founding the predecessor fund in 2002. Earlier this year he was ready to join up. Carl Tiedemann couldn’t be more delighted, especially since he has always regarded small cap stocks as one of the more fertile investment opportunities.

The Falconer fund has returned over 15% per year since inception, net of fees, compared to a mere 4% for the Russell 2000. It has posted a standard deviation of 6%, substantially better than the 20% variance registered for the Russell index.

As of August, the fund was net short. (We should note that this fund raised its fee to 1.5% from 1% when joining TIG; past results would have been slightly lower under the current fee structure.)

Mr. Tiedemann’s fund-of-funds, called Select Global Growth, is up more than 4% after fees through August. This compares favorably with the great majority of FOFs, which are up less than 1% this year. It’s also better than the S &P 500, which gained less than 1% during the same period. At the end of August the fund was heavily skewed towards overseas investments, with a 20% stake in Asia (including Japan).

Since inception in 1999 the fund has returned 11.5% per year, compared to losses of 0.4% for the S &P 500 and 0.6% for the MSCI World Index. Volatility has been significant; in 2000 the fund lost 17% after climbing 77% the year before. The standard deviation overall, though, is about in line with its benchmarks. Today the fund has assets of about $65 million.

For 24 years, Mr. Tiedemann and his partners (which now include his son, Michael, who trained at Banco Garantia and CSFB) have slowly built the business. He recalls fondly the terrifying thrill of raising the first $10 million (at a time when that seemed like a lot of money), and the skepticism with which some of his colleagues greeted his decision to go out on his own.

That same reserve is probably evident when he brings up his newest venture – the Tiedemann Trust Company (TTC).Trust operations are generally considered the stodgy province of conservative investors – not the likely offshoot of a hedge fund operation.

Traditionally, trust companies manage their clients’ money in-house, charging annual fees for that service, as well as for other practices helpful to wealthy clients, such as tax preparation, bill paying and legal advice. The money management divisions of these concerns are not usually perceived to be cutting edge, to put it mildly.

Tiedemann has come up with a new approach. His trust company provides all the traditional services to wealthy clients, but farms out their money to independent managers who compete in a wide variety of disciplines. No money is directed to the Tiedemann funds, much to the ire of his younger partners.

In the past five years, the Trust Company, which was established in Delaware to take advantage of that state’s tax regulations, has brought in assets of about $2 billion, almost entirely through word of mouth. Typical clients have assets in the $20 million-$40 million range – too small to have their own family office. The firm is managed by Carl Tiedemann, his son, and several former senior J.P. Morgan executives.

Mr. Tiedemann appears to be a patient man. He is excited about the opportunities for both his hedge fund operations and the trust company, but wants to grow these businesses carefully.

He firmly believes that “small is beautiful” in the money management business. As a result, he often closes funds when they get above $300 million; more than $600 million or so becomes unmanageable in his view.

While no doubt some of his competitors would scoff at this conservative view, they might also admire Mr. Tiedemann’s long, steady growth. Though he had some down years in the mid 1990s, the trend has generally been up. The other firm started in 1980, after all, was Julian Robertson’s. Enough said.

Ms. Peek is a former managing director of Wertheim Schroder, now a part of Citigroup.