CAMBRIDGE, Mass. — The chief of Harvard University’s endowment says he’s disappointed with the school’s latest investment results.
An annual report released Sept. 19 says the nation’s largest endowment posted an investment return of 8.1 percent in fiscal year 2017, reaching a value of $37.1 billion.
It’s a strong improvement over the endowment’s 2 percent loss last year but falls short of gains recently reported by other major schools.
Harvard endowment chief N.P. Narvekar says in his report that the performance is “disappointing and not where it needs to be.”
The Indian American executive says he’s fixing “deep structural problems” that have persisted since he was hired from Columbia University last year and that his changes will improve performance.
Endowments at the Massachusetts Institute of Technology and Dartmouth College have reported gains topping 14 percent for 2017.
Bloomberg adds: In his first seven months, Narvekar wrote, he shifted responsibilities on the investing teams so that managers handled a variety of asset classes rather than take a “silo” approach.
Employees’ compensation is now based on the performance of the entire portfolio, not the portion they happen to manage. He said he recruited new senior investment team members and created a new system for assessing the fund’s risk.
Narvekar moved aggressively to restructure the organization after announcing in January a plan to cut the 230-person staff in half this year. Harvard shut down an internally managed equities team, spun out portfolio managers who do relative value trading and still plans to spin out a real estate team and credit trading portfolio, according to the letter.
It’s going to take time, Narvekar warned several times in his letter.
“The HMC board of directors and I expect that it will take a number of years to reposition HMC in order to perform up to our expectations from that point forward,” Narvekar wrote.