The former vice president of external investments at HMC revamped Wellesley’s investment strategy, creating its first investment office, and helped the school’s endowment earn an average annual return of 13.5 percent during her five-year tenure. Wellesley’s investments grew by almost a quarter in 2007 and nearly matched HMC’s results.
Mendillo’s appointment comes after years of instability at HMC, beginning with the 2005 departure of the company’s long-time CEO Jack R. Meyer, who left to launch a hedge fund amid heated criticism over his multimillion dollar compensation—and took 30 HMC employees with him.
Six months ago, Harvard’s bid to restore stability to HMC suffered a setback when Meyer’s predecessor Mohamed A. El-Erian announced plans to return to lead a private investment company after a brief 22-month tenure.
Mendillo’s long history in endowment management—she has spent almost her entire career managing academic portfolios—may provide a measure of security to those concerned by the prospect of losing managers to higher salaries in the private sector.
The top 25 private hedge fund managers take home an average of over half a billion annually, dwarfing the pay for Harvard CEOs, which falls well short of $10 million.
She suggested that she planned to stay at HMC longer than her predecessor, calling her appointment “the pinnacle for me in my career.”
Robert Kaplan, a former vice chairman at Goldman Sachs and a professor at the Harvard Business School, has acted as interim CEO since January 1 and, the University says, will now serve on HMC’s board of directors.
When El-Erian assumed leadership of HMC in 2006, the firm was severely in need of rebuilding following Meyer’s debilitating departure. Despite his short tenure, El-Erian left his mark on the institution, reorganizing HMC’s internal infrastructure and increasing the traditionally aloof company’s ties with the University—changes that remain in place today.
Mendillo said she did not expect El-Erian’s footprint to be a “major factor” in her ability to transition into HMC’s leadership.
“I do think there is an expert and talented team at Harvard today,” Mendillo added. “I’m very happy and excited to begin working with them.”
Harvard treasurer James F. Rothenberg ’68, who chairs HMC’s board and led the search for a new CEO, said deteriorating market conditions had spurred the search to a faster conclusion to provide permanent leadership to the company.
“I think the environment we were in with a lot of turbulence compared to the economy during the last search may have sped the process up,” he said.
Financial markets have declined dramatically in the past nine months as the effects of a unexpectedly high rates of home loan defaults tore through the economy, wiping out billions in capital, including $350 million of a Harvard investment in one hedge fund that folded last July.
Mendillo is the first woman to hold the HMC leadership post and is part of a recent increase in the number of women managers of educational endowments.
Almost a quarter of the nation’s 25 largest education endowments are now led by women, compared to less than 10 percent a decade ago, according to the Wall Street Journal.
Mendillo still serves on the boards of several other investment groups, according to the announcement, including the Yale University Investment Committee—a post she will leave in June.
She will take the reins of Harvard’s $34.9 billion endowment on July 1.
In an interview Thursday, Rothenberg lauded Mendillo’s performance at Wellesley and her years at HMC, but he did express concern about one line on her resume.
“Jane has these terrible ties to Yale,” he deadpanned, referencing her undergraduate and graduate degrees from the New Haven competitor. “The only thing we’ve been able to determine is that her husband graduated from Harvard in ’79.”
—Staff writer Clifford M. Marks can be reached at firstname.lastname@example.org.
—Staff writer Nathan C. Strauss can be reached at email@example.com.
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