Hanseatic Group, Inc. was founded in 1977 in Albuquerque, NM to trade futures, currencies, and interest rate instruments using quantitative methodologies. Over its history, the firm has been held by three distinct sets of majority shareholders: the Founder from inception to 1992; a private equity firm from 1992-2002; and its employees from 2002-present.

Katherine Burr was one of the firm's original customers and then worked as a consultant for the firm throughout the 1980's, helping to build the business through her expertise in commercializing products based on modeling nonlinear systems. In 1989 she joined Hanseatic as Executive Vice President. She became President/CEO in 1992, upon bringing in the private equity firm that bought out the Founder. The private equity firm reduced its shareholding in the 2002 restructuring, opening the door for Hanseatic employees to own and actively manage the company.

Ed Meihaus, Chief Investment Officer, joined Hanseatic in 1984 bringing with him his proprietary quantitative methodology. Since 1984 Mr. Meihaus' models have been used exclusively to manage all the firm's products. Russ Sanderson joined Hanseatic in 1989 to assist Mr. Meihaus in model building and trading. Brian Stangel joined Hanseatic in 1993 to work with Ms. Burr in executive management and Mr. Meihaus in trading and investing. To insure company competencies are widely distributed and succession issues are addressed, since the 2002 restructuring Mssrs. Meihaus, Sanderson, and Stangel now work as an investment team rather than having only one portfolio manager.

In 1995, Ms. Burr created an internal spin-out, Hanseatic Management Service, Inc. ("HMSI"), majority owned by Ms. Burr, to be developed through her expertise around products based on an outstanding buy and hold US equity track record created by Mr. Meihaus. At the time of HMSI's founding, the track record had real-time performance beginning in May, 1991. However, there were only $1 million in assets under management, a marketing challenge that was successfully met. By 2000 the track record had attracted several institutional clients, three of whom have now been with HMSI for over five years.

Today HMSI is the sole fund management company in the Hanseatic Group. The firm's fund management activities in derivatives are no longer being conducted, though they may be again in the future. For now the firm's full effort is being devoted to growing HMSI in several product areas: Large Cap against a benchmark, Small Cap against a benchmark, and Multicap, against a benchmark as well as on an absolute return basis. The goal is to grow the business to several billion dollars under management over the next ten years.

Before joining Hanseatic in 1984, Ed Meihaus worked for several large corporations specializing in capital budgeting. He also started his own fund management company. His experience led him to conclude that short-term quantitative techniques often fail to capture the value of a long-term investment, but are excellent at timing market entry and exit. In contrast, fundamental analysis often fully captures the value of an investment in the long-run but fails at timing entry and exit.

Mr. Meihaus decided to develop his own quantitative system, one that could consistently identify long-term investment opportunities as well as reliably identify relatively optimum market entry and exit points. His goal was to develop a system that worked real-time, not just conceptually. The real-time measure of success would be several fold: the ability to produce alpha on an absolute and risk-adjusted basis, low correlation to the market and other investment techniques, and the ability to work for individual stocks, across market sectors and industries, and in several asset classes free of bias. Further, he wanted his system to be consistent with cutting-edge economic theory, i.e. markets are only partially random.

To implement his philosophy, Mr. Meihaus designed a multi-time dimensional system that identifies stocks whose emergent price trends have better than normal probability of persisting into the 6-36 month target holding period with positive alpha. Lower time dimension patterns are then used to identify shorter term entry and exit points. Research has shown that time parameters in the relevant time dimensions, monthly and weekly in particular, also play an important role. It is the intersection of multi-time dimensional trend measurement and time boundaries that is the foundation of the buy-sell disciplines. The idea is to enter an investment neither too soon nor to exit it too late, but to gain as much return as possible from the moment persistent strength is probable.