Harvard Management Firm Got Their Fund Performance Wrong
Ivy league’s Harvard Management Company which manages 35 billion $ endowment of the prestigious university, used to have 250+ dedicated investment bankers and analyst to support 13000+ funds. This is biggest in terms of number of funds and value across the world for educational institutions. The performance of Harvard fund on returns are hanging around 5%. Last year it dropped 2%.
The fund supports close to 1/3 rd of the financial needs of Harvard institutes. The money is split across academic, industrial research and providing grants to well deserving students. The current HMC uses both in house financial advisors and external consultants. The performance of the fund has gone down and cost of managing it has increased. The management has cut the employees of the HMC by half. The management has decided to bring in key experts and outsource the monitoring portion.
On contrary in India, the Finance minister has guaranteed pension return of 8% to Senior citizens through LIC schemes. The Indian equity market and MF seems to be more lucrative than Harvard’s endowment management.