Harvard Endowment Jumps to $34.9 Billion

8/22/07Follow @wroush

The rich do get richer. Despite a leadership turnover at Harvard Management Co., which oversees the university’s investments, Harvard saw its endowment expand a healthy 23 percent to $34.9 billion in the 12 months that ended June 30, according to an announcement today. The Ivy League elder, which depends on the endowment for nearly a third of its operating income, overcame the stormy departure of former management company president Jack Meyers and many of his top lieutenants early last year to turn in its best investment performance since 2000, when the endowment swelled by an astonishing 32.2 percent.

Harvard released endowment figures for the 2007 fiscal year ahead of most other universities, so it’s difficult to compare the performance of the world’s largest academic endowment to that of other universities’ investments. But going by 2006 figures, Harvard’s closest competitors were Yale ($18.0 billion), the University of Texas system ($15.5 billion), Stanford ($15.3 billion), Princeton ($13 billion), and MIT ($8.4 billion). The Harvard endowment’s 23 percent growth far outstripped the average fiscal 2007 performance of 17.7 percent turned in by 151 large institutional (non-university) funds tracked by the Trust Universe Comparison Service, according to Harvard.

As the Boston Globe’s Steven Syre recounts, Mohamed El-Arian, the former emerging markets manager for bond trading giant PIMCO, took the reigns at Harvard Management Co. in 2006 after Meyers and 30 portfolio managers left amid questions over performance-based salaries that reached as high as $18 million a year. So far, El-Arian seems to be quelling fears about whether the high returns achieved by Meyers’ team in previous years could be sustained.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

By posting a comment, you agree to our terms and conditions.