Management Company Names New Private Equity Director

Richard Hall Is Third Manager To Head the Asset Class Since April 2013

Richard L. Hall ’90 has been named the new managing director of private equity for the Harvard Management Company, which oversees the University’s $33 billion endowment.

He will replace Lane MacDonald ’88-’89, who stepped down in February less than three months after being promoted to the position, previously held by Peter Dolan ’83. Dolan left the post in April 2013 after nearly 20 years at Harvard Management Company.

“Hall brings significant and deep expertise across private equity investments, other private assets and global M&A, and we are delighted to welcome him to our team,” HMC President and CEO Jane L. Mendillo wrote in a statement.

Hall was previously the managing director and head of private equity at the Teacher Retirement System of Texas, a fund that manages the retirement benefits for public school and university employees in state and boasts a $14 billion private equity portfolio. Prior to that, he worked at various financial firms, most recently Bank of America Securities, and served as an intelligence officer in the U.S. Navy. He earned his MBA at the Kellogg School of Management at Northwestern University.

Hall will begin work at the Boston-based HMC in April.

Hall will lead an area of the endowment that seen mixed results in the past few years. According to HMC’s annual report from fiscal year 2013, private equity is the endowment’s second-largest asset class. While its returns beat the internal benchmark by a margin of .4 percent in 2013, it was the only asset class to not meet its benchmark in 2012, falling short by 2.05 percent. Mendillo characterized private equity’s returns as “fair” in the 2013 report.

Private equity is an illiquid asset class, which means that it locks up money for relatively long periods of time. In exchange, Mendillo wrote that HMC expects an illiquidity premium, or returns greater than those of public, more liquid markets. Yet she noted that returns for private and public equity have been similar in the past decade.

“While this asset class still presents unique opportunities for attractive returns, it has gotten much more crowded and there is less of an illiquidity premium,” she wrote in the 2013 annual report. “As a result, we are actively focused on honing our private equity strategy to maintain the highest concentration in the very best managers with the greatest potential to add value.”

MacDonald was only the most recent HMC employee to leave the fund for a lucrative position in the private sector. He is now president of Crosby Advisors, a company that manages the personal wealth of Fidelity Investments chief Edward C. Johnson III ’54 and his family. The most prominent loss was Chief Investment Officer Jack R. Meyer, who, over the course of 14 years, oversaw the endowment’s growth from $4.7 to $22.6 billion. He left in 2005 to found Convexity Capital Management and brought with him more than 30 HMC employees.

—Staff Writer Christine Y. Cahill can be reached at christine.cahill@thecrimson.com. Follow her on Twitter @cycahill16.

Tags