Harvard Management Company
Encyclopedia
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. HMC is best known for managing the university's $32 billion endowment, the largest endowment in higher education.
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%.
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 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. 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).
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. 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.
's so-called Harken Energy scandal
. 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. At the time, employees were accused of improperly investing their own money into Harken but Harvard deemed those investments appropriate.
Investment management
Investment management is the professional management of various securities and assets in order to meet specified investment goals for the benefit of the investors...
corporation wholly owned subsidiary
Subsidiary
A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...
of Harvard University
Harvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
, charged with managing the university's endowment, pension assets, working capital, and non-cash gifts. HMC is best known for managing the university's $32 billion endowment, the largest endowment in higher education.
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. The HMC is headed by a professional, who is appointed the title of president and chief executive officerChief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
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%.
The university hired Mohamed El-Erian
Mohamed A. El-Erian
Dr. Mohamed A. El-Erian is the CEO and co-CIO of PIMCO, a global investment management firm and one of the world’s largest bond investors with approximately US$1.34 trillion of assets under management as of June 30, 2011....
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 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
Yale University
Yale University is a private, Ivy League university located in New Haven, Connecticut, United States. Founded in 1701 in the Colony of Connecticut, the university is the third-oldest institution of higher education in the United States...
followed by an MBA from Yale School of Management
Yale School of Management
The Yale School of Management is the graduate business school of Yale University and is located on Hillhouse Avenue in New Haven, Connecticut, United States. The School offers Master of Business Administration and Ph.D. degree programs. As of January 2011, 454 students were enrolled in its MBA...
, Mendillo first joined Harvard Management Co. 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 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
Seth Klarman
Seth Klarman is the founder and president of the Baupost Group, a Boston-based private investment partnership, and the author of a book on value investing.-Career:...
(Baupost Group).
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. 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. BushGeorge W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
's so-called Harken Energy scandal
Harken Energy Scandal
The Harken Energy scandal refers to a series of transactions entered into during 1990 involving Harken Energy. These transactions are alleged to involve either issues relating to insider trading, or influence peddling. No wrongdoings were found by any investigating authorities although the matter...
. Specifically, Michael R. Eisenson
Michael R. Eisenson
Michael R. Eisenson is co-founder, managing director and chief executive officer of Charlesbank Capital Partners, LLC, a private equity investment firm based in Boston and New York....
, who would later found private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
firm Charlesbank Capital Partners
Charlesbank Capital Partners
Charlesbank Capital Partners is a private equity investment firm focusing on leveraged buyout transactions involving middle-market companies.The founders of Charlesbank came together in 1991 as Harvard Private Capital Group to manage the private equity investment portfolio for Harvard Management...
was the Harvard representative on the Harken Energy board when Harvard made a $30 million investment into the ill fated oil company venture. At the time, employees were accused of improperly investing their own money into Harken but Harvard deemed those investments appropriate.
See also
- List of colleges and universities in the United States by endowment
- List of wealthiest charitable foundations
Articles
- The New York Times :: "Harvard and Yale Report Losses in Endowments"
- The Wall Street Journal :: "Harvard's Fund Returns 23%, Boosting Size to $34.9 Billion"
- The Harvard Crimson :: "Endowment Chief Speaks to Students"
- The Harvard Crimson :: "Harvard Management Company Hires Two Senior Executives in Plan to Remake HMC"
- The Harvard Crimson :: "HMC Salaries Fall From Highs"
- The Harvard Crimson :: "Top Bond Manager to Lead Endowment"
- The Harvard Crimson :: "Endowment Reaches $25.9 Billion"