“In Greek mythology, Aeneas is a figure who constantly runs into tribulations, but comes out a hero in the end,” Cabot says. “I thought that captured the role of investing.”
During his 16-year term as president, Cabot steered HMC through the market crash in 1987 and cast the company—the first university management company of its type—in an unconventional mold. He globalized the HMC portfolio in the late 1970s and started investing in private companies and venture capital. Cabot says his investments were sometimes criticized as risky. But, by the time he stepped down in 1990, the endowment had grown to five times its initial size.
“Walter...led the company into many innovative investments including venture capital, real estate, oil and gas, security lending, and index arbitrage,” says Jack R. Meyer, who succeeded Cabot as the HMC president.
The Harvard Corporation, the University’s highest governing body, invited Cabot to take the nascent HMC’s reigns in 1974. At the time, he was working as a managing director at Wellington Management Company—but moving to Harvard, he says, seemed an irresistible opportunity.
“I felt good about the institution,” he explains, “and what excited me was to begin from scratch and bring in investment techniques I had learned over the years.”
He says he hoped to turn HMC into a model for other universities—even if it entailed some personal sacrifices.
“Over that period of time, I probably made less money than I would have in the profit sector [but] I thought it was an important thing to do for the University,” he says. “Stanford and Princeton both created management companies after the HMC model was in place.”
The job, he says, came to match his interests like a glove.
“You were able to focus all the time on investment issues, it was under Harvard, and the board gave me substantial latitude to do what I thought would make money for the University,” he says.
FRIENDS FOR LIFE
Today, Cabot traces the roots of his life at Harvard all the way back to kindergarten. Growing up in Dover, Mass., where he continued to live for much of his life, he befriended Robert Leeson, Jr. ’55 and Ralph B. Williams ’55, two fellow students at the Charles River School. The three friends eventually went their separate ways—only to be reunited, to their surprise, as Harvard freshmen under the roof of Straus Hall.
They stuck together through their undergraduate years, rooming together in Eliot House, taking excursions to ski slopes or football games, and chasing “women around to the extent that the women would allow us to,” Leeson remembers.
While Cabot describes his college social life as relatively “tame,” he remembers it peppered with pranks.
“There was a sport where you tried to see how many could get into a telephone booth. You put the heaviest guy on the bottom and the lighter guys piled in on top of him. I suspect we knocked over a few telephone booths that way,” he says. “That was one activity. I suspect that eating goldfish was another one.”
Cabot was elected president of Hasty Pudding Theatricals during his last year at the College. Although he didn’t act in any of the drama group’s performances, he says he worked closely with the manager and oversaw the production of every show.