Word: hmc
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Dates: during 2000-2009
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...report how much of that money has been retracted after the endowment’s recent underperformance. According to HMC’s policies, which emphasize sustained, long-term growth, internal investment managers are awarded bonuses if they grow the value of the endowment above benchmarks set by the HMC Board, but those bonuses can be retracted in later years if the fund underperforms benchmarks...
...compensation for HMC’s president and top five officials totaled $26.8 million. In 2003, when managers were paid $107.5 million, many of the same alumni issued sharp protestations—which reportedly disgruntled many HMC managers and motivated them to leave Harvard to found private firms...
David Kaiser ’69, who signed the letter to Faust, emphasized in an interview with The Crimson that the global financial crisis has exposed fundamental flaws in the aggressive strategies used by investors around the world. He acknowledged that HMC has for years delivered spectacular endowment growth, but said that the drastic budget cutbacks now plaguing the University illustrated the need for “slower but more sustainable rates of growth...
That said, it would be naive to move into an overly conservative strategy in the wake of the losses of the past year. HMC managers were extraordinarily successful before 2008, and one bad year should not collapse our faith in their investment acumen. In the 10-year period ending in fiscal year 2008, the Harvard endowment outperformed the median institutional fund by 7.7 percent per year. Had it earned the median institutional fund rate, endowment assets would have been $23.5 billion less. Moreover, Harvard’s money czars are far from alone in their shortcomings this year. Yale?...
Therefore, although there are lessons to be learned going forward, calls to drastically scale back risk-taking in the future are unfounded. This would prevent Harvard from recovering from its current dire straits and stunt our growth prospects. HMC should instead look to manage money mindfully, attaining good enough returns given the university’s particular situation. This is our best hope to seeing the endowment recover and making the budget cuts of the past year a distant memory...