Word: mendillo
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...November, media outlets began reporting that Harvard was looking to sell billions of dollars in private equity holdings at drastically reduced prices, and in December, the University sold $2.5 billion in bonds in order to raise cash, refinance short-term debt, and terminate certain investment agreements. (Mendillo has stated in the past that HMC began exploring private equity sales even before the financial world imploded, as part of a larger policy portfolio shift that she implemented upon her arrival.) Thursday’s endowment report said that over the past year, HMC has reduced its payments owed to outside investment...
...Mendillo said that the Company is now also considering remodeling its portfolio to encourage team collaboration, focus more on internal strengths, and reassess the endowment’s risk and the University’s needs. While overall risk management was “adequate” last year and helped avoid extreme volatility, Mendillo wrote that more is being done now to manage risk and that lessons have been learned, particularly that “the risk tolerance of the University needs to be an integral factor” when determining how the endowment is invested...
Nevertheless, HMC will likely hew to the diversified investment model that it has long championed. Mendillo pointed out that even slumping assets such as private equity have delivered high returns when annualized over the past few years. If HMC had simply invested its portfolio in a 60/40 ratio of stocks and bonds 10 years ago, the endowment today would be $18 billion smaller, she wrote...
...Mendillo also emphasized that HMC has taken steps this past year to increase flexibility and control over internal and external funds. The report said that she intends to continue using a “hybrid model” of internal and external managers, but that she is not targeting any specific proportion. Instead, she noted that internal management is highly cost effective and that HMC would look to “increase the share of our internally managed assets under the right conditions...
...employees in February, citing the need to “re-balance and re-engineer” the organization. Since then, the Company has made a string of managerial hires, adding investment experts to several internal teams while appointing new heads of internal and external management from within. Mendillo said HMC has increased its “depth and breadth of talent” over the past year and will continue searching for further individuals with “unique investment insights...