Harvard picks Blyth to helm endowment

  • Heads public markets at Harvard Management Co
  • Goals still growth, generating money for operations
  • Plan to boost school’s exposure to PE, real estate

Harvard University has named an insider, Stephen Blyth, to run its $36.4 billion endowment, the world’s largest.

Blyth, who heads public markets at Harvard Management Co, the school’s investment arm, will replace President Jane Mendillo after she retires in December, sister news service Reuters reported. Mendillo has run the endowment for six years, steadily rebuilding it following heavy losses during the financial crisis.

The choice of Blyth, 46, signals continuity for the Ivy League university. Blyth said he will retain the management company’s twin goals of growth and generating money for the school’s operating budget. “My opportunity here is to continue the work that Jane has done in rebuilding the portfolio,” Blyth said in an interview. The financial services industry veteran holds a statistics PhD from Harvard, and has taught the subject there.

Harvard reported in September that its endowment posted a 15.4 percent return in fiscal 2014 as in-house bond managers and outside hedge funds teamed up to beat the portfolio’s 14.6 percent benchmark return.

It also outlined plans to boost its exposure to private equity and real estate in 2015 to 18 percent and 12 percent of its portfolio, respectively. Blyth declined to reiterate those numbers but said the current endowment is “an appropriate portfolio for Harvard’s needs. That may change over time.”

Blyth was chosen after a national search, James Rothenberg, chairman of the management company’s board, said in statement, citing his ability to manage holdings during often-volatile market conditions.

Harvard said Blyth has a math degree from Christ’s College, Cambridge University and has worked at Deutsche Bank, Morgan Stanley and other financial companies. Blyth joined Harvard Management in 2006 and initially ran a team focused on international bonds. He gradually took on additional responsibilities such as overseeing equity investments and, in recent years, working with external investment managers, Harvard said.

Mendillo said in June she would retire for personal reasons. She took over the management company in 2008, just in time for the financial crisis, and during her first year oversaw a steep plunge in assets to $26 billion. Since then she has rebuilt the endowment by paring back risky holdings and emphasizing resource investments.

Endowments provide key portions of the operating budgets of universities like Harvard, which is based in Cambridge, Massachusetts. Yale University, in New Haven, Connecticut, said its closely watched endowment earned a 20.2 percent return for the fiscal year ended June 30, bringing its value to $23.9 billion.