Harvard University endowment
 |
|
| Private | |
| Industry | Investment management |
| Founded | 1974 |
| Headquarters | Boston, Massachusetts, U.S. |
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Key people
|
N.P. “Narv” Narvekar (CEO) |
| AUM |
 US$ 37.6 billion (2015) |
| Parent | Harvard University |
| Website | HMC |
Harvard University's endowment (valued at $37.6 billion as of 2015[update]) is the largest academic endowment in the world. Along with Harvard's pension assets, working capital, and non-cash gifts, it is managed by Harvard Management Company, Inc. (HMC), a Harvard-owned investment management company.
HMC employs financial professionals to manage the approximately 12,000 funds that constitute the endowment. The company directly manages about one third of the total endowment portfolio while working closely with the external companies that manage the rest. HMC is headed by a professional, who holds the titles of president and chief executive officer of the company.
Jack Meyer managed HMC from 1990 to September 30, 2005, beginning with an endowment worth $4.8 billion and ending with a value of $25.9 billion (including new contributions). During the last decade of his tenure, the endowment earned an annualized return of 15.9%. In part after compensation disagreements, a number of HMC managers including Meyer himself left to form their own investment management firms. Bloomberg in 2011 reviewed a group of the resultant firms—Adage Capital Management LP, Charlesbank Capital Partners LLC, Convexity Capital Management LP (Meyer's), Highfields Capital Management LP and Regiment Capital Advisors LLC—which at that time between them managed $43 billion in assets.
The university hired Mohamed El-Erian to succeed Meyer as HMC's next president and CEO. He came from the bond trading company PIMCO and pledged to "rebuild and reinvent" the company. He announced his leaving September 12, 2007 to return to PIMCO after guiding the endowment to a one-year return of 23%.
Jane Mendillo was named the new head of HMC, effective July 1, 2008. She had been Wellesley College’s chief investment officer since 2002. Prior to that, she served as vice president for external management at HMC. A 1984 graduate of Yale University followed by an MBA from Yale School of Management, Mendillo first joined HMC as an equities analyst in 1987. Her tenure was largely shaped by the financial crisis of 2007–2010, with a cash squeeze in University operation and endowment performance, a shrinkage of endowment asset value, and errant interest rate, financial derivatives and leveraged positions, according to a Feb. 2009 news report. Staff of HMC was trimmed 25%, or by about 50 people, in line with shrinkage of about $8 billion (about 22%). A source for the report said that some of the positions in the endowment which had to be liquidated were in hedge funds run by Meyer's Convexity Capital and Seth Klarman's Baupost Group.
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