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Harvard University endowment

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Harvard Management Company
Company typePrivate
IndustryInvestment management
Founded1974 (1974)
Headquarters
Boston, Massachusetts
,
U.S.
Key people
Jane Mendillo
(President & CEO)
ParentHarvard University
WebsiteHMC.Harvard.edu

Harvard Management Company or HMC is an American investment management corporation wholly owned subsidiary of Harvard University, charged with managing the university's endowment, pension assets, working capital, and non-cash gifts.[1] HMC is best known for managing the university's $32 billion endowment,[2] the largest endowment in higher education.[3]

Management

The company employs financial professionals to manage the approximately 11,000 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.[4] The HMC is headed by a professional, who is appointed the title 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%.[5]

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%.[6]

Jane Mendillo was named the new head of Harvard Management Co., 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 Harvard Management Co. A 1984 graduate of Yale University followed by an MBA from Yale School of Management, Mendillo first joined Harvard Management Co. as an equities analyst in 1987.[7] 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 Bn (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 (Convexity Capital) and Seth Klarman (Baupost Group).[8]

Marc Seidner joined HMC as vice president for domestic fixed income in an effort to revamp the company's bond division in 2006. Mr. Seidner was previously the director of active core strategies at Standish Mellon Asset Management.[9] The Wall Street Journal reported on June 23, 2009 that Seidner was departing from the organization. On August 14, 2009 PIMCO announced that it had hired Seidner as an executive vice president and portfolio manager to manage a range of fixed-income portfolios.

Harvard Management Company and Harken Energy

In 2002, Harvard Management Company was linked to George W. Bush's so-called Harken Energy scandal.[10][11][12] Specifically, Michael R. Eisenson, who would later found private equity firm Charlesbank Capital Partners was the Harvard representative on the Harken Energy board when Harvard made a $30 million investment into the ill fated oil company venture.[13] At the time, employees were accused of improperly investing their own money into Harken but Harvard deemed those investments appropriate.[14]

See also

References

  1. ^ Harvard Management Company (2008). "About HMC". Archived from the original on March 1, 2008. Retrieved March 24, 2008. {{cite web}}: Check date values in: |year= (help)CS1 maint: year (link)
  2. ^ The New York Times (September 11, 2009). "Harvard and Yale Report Losses in Endowments". Retrieved August 4, 2010. {{cite news}}: Check date values in: |year= (help)CS1 maint: date and year (link) CS1 maint: year (link)
  3. ^ The Harvard Crimson (2005). "Super-Size Me". Retrieved May 15, 2006. {{cite web}}: Check date values in: |year= (help)CS1 maint: year (link)
  4. ^ Harvard College Fund (2008). "The Endowment". Retrieved March 24, 2008. {{cite web}}: Check date values in: |year= (help)CS1 maint: year (link)
  5. ^ BusinessWeek (2005). "Harvard Loses an Investing Star". Retrieved March 24, 2008. {{cite web}}: |author= has generic name (help); Check date values in: |year= (help)CS1 maint: year (link)
  6. ^ The New York Times (September 12, 2007). "Fund Chief at Harvard Will Depart". Retrieved September 12, 2007. {{cite news}}: Check date values in: |year= (help)CS1 maint: date and year (link) CS1 maint: year (link)
  7. ^ Boston Herald (2008). "Harvard Management Co. appoints new chief". Retrieved March 27, 2008. {{cite web}}: Check date values in: |year= (help)CS1 maint: year (link)
  8. ^ "Endowment Director Is on Harvard’s Hot Seat" by Geraldine Fabrikant, The New York Times, Feb. 20, 2009. Retrieved 2-22-09.
  9. ^ "Harvard Management Company Hires Two Senior Exercutives in Plan to Remake HMC" by Cyrus Mossavar, The Harvard Crimson, April 20, 2006.
  10. ^ Kranish, Michael. "Harvard fund poured millions into Bush-connected oil firm: Family connection raised as factor". The Boston Globe, July 18, 2002, p. A12
  11. ^ Harvard Stock Under Scrutiny The Harvard Crimson, July 19, 2002.
  12. ^ Conason, Joe. Did those "boutique" liberals bail out Bush? (Salon.com, July 11, 2002)
  13. ^ Catherine Austin Fitts. The Money Lords Of Harvard: How The Money Works At The World's Richest University
  14. ^ Harvard Investors Call Harken Deal Clean The Harvard Crimson, November 21, 2002

Articles

Further reading

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