This report describes an algorithm for computing 3D object hierarchies fit for hlod optimization. The algorithm is used as a pre-processing stage in an hlod pipeline that automatically optimizes 3D models containing multiple meshes. The algorithm for generating hierarchies groups together meshes in a hierarchical tree using operations on bounding spheres of the meshes. The algorithm prioritizes grouping close objects together in the early stages, and relaxes its constraints toward the end, resulting in a tree structure with a single root node. The hierarchical tree is then used by computing proxy meshes, i.e. simplified stand-in meshes, for the inner nodes of the hierarchy. Finally, the resulting proxy meshes, together with the generated hierarchy and the original meshes, are used to render the model using a tree-traversing hlod switching algorithm that renders deeper parts of the tree containing more detailed meshes when more detail is needed. In addition, a minor change to the clustering algorithm is proposed. By swapping the bounding spheres to AABBs (Axis-Aligned Bounding Boxes) in the clustering stage, hierarchies with different properties are generated. This change is shown to generate hierarchies with similar rendering performance as the hierarchies made with bounding spheres, while at the same time resulting in lower space requirements for all proxy meshes. Overall, the proposed automatic hlod pipeline is shown to increase rendering performance for all evaluated scenes in most frames, while never yielding noticeably worse performance than the original model as well.