- Assets under Management: $39.2 billion
- LP strategy: the endowment follows a generalist model instead of a specialist one
- Whom to contact: Patrick McKiernan (email@example.com)
- Why this is important: Harvard’s endowment has underperformed against its peers, and is in the process of restructuring its portfolio
Harvard University’s endowment has returned 10 percent on its investments in 2018, up from 8.1 percent in 2017. But the endowment’s returns trailed its peers, which clocked more than 12 percent returns for 2018.
Nirmal Narvekar, chief executive of Harvard Management Co, which manages the $39.2 billion endowment, on Sept. 28 reported the returns in a brief note to Harvard affiliates.
Massachusetts Institute of Technology returned 13.5 percent, University of Pennsylvania returned 12.9 percent and Dartmouth College returned 12.2 percent in the same period.
This is Narvekar’s second round of endowment returns since he took over in late 2016. That year, the endowment lost 2 percent.
“HMC, as an organization, and the endowment portfolio are still in the early stages of a multiyear transition, with much work ahead,” Narvekar said.
Narvekar made significant changes to endowment in the past two years.
The endowment adopted a generalist model, and managers became accountable for the entire portfolio instead of only their asset silos.
Harvard Management’s relative value and equity platforms were shut down. The real credit platform was repositioned and the real estate portfolio was spun off to Bain Capital.
The endowment sold stakes in PE funds, cut exposure in real estate, and agreed to sell a portfolio of warehouses to Blackstone Group for almost $1 billion this year, Bloomberg reported.
Harvard Management also trimmed its 230-member team. Several managers, including the former head of private equity, Richard Hall, and Managing Director Melinda Barber left the endowment this year, Buyouts reported.
Further details of the investment returns will be available in the university’s financial report in October, Narvekar said.
Action Item: Read about Narvekar’s initiatives here https://bit.ly/2zCpv3l