Harvard Management Company examines how the Harvard endowment recovered after the financial crisis through active management, direct investing, and shifting asset allocations. The paper highlights a 15.4% fiscal 2014 return while arguing emerging markets and private equity still offer attractive long term opportunities despite underperformance.
Annual Endowment Report: Message from the CEO
Harvard Management Company
Jane Mendillo
Research
7 Pages
Key Takeaways
Active Management Edge: The endowment returned 15.4% in fiscal 2014, outperforming its benchmark by 0.8% and delivering $1.9 billion of cumulative value added over five years.
Private Equity Drag: Vintage 2004–2008 private equity commitments represented 73% of the portfolio and materially hurt results, even as venture capital returned 32.8% in fiscal 2014.
Direct Investing Expansion: Roughly 15% of assets were in direct real estate and natural resource investments by 2014, helping the internally managed portfolio reach nearly 40%.
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