Hey faithG_,
Hierarchical LOD can automatically replace large numbers of detailed meshes with a few simple meshes when they are far away. This helps you achieve much higher quality levels when viewing objects up close, and faster overall performance for your level. In order to get the most benefit from HLOD, you will need the Simplygon SDK (requires a Simplygon license). Simplygon is required to generate a proxy mesh with a reduced number of polygons. Without it, the system will only bake out and combine sections that use different materials into a single draw call.
Cheers,