According to the reports, HMC is seeking buyers for around $1.6 billion in real estate and almost $1 billion in private equity.
HMC's moves to sell the assets come as recently-installed CEO of the firm N.P. Narvekar reconsiders much of Harvard’s approach to endowment investing. In January, the company announced plans to lay off half its staff by the end of the calendar year after financial reports revealed that Harvard’s endowment lagged significantly behind those of its peers.
At the time, HMC also announced it would alter its investment model. Harvard has historically employed a unique “hybrid” investment model, in which HMC retained a large internal staff while also hiring external employees. Narvekar has opted to move HMC towards relying more on external funds to manage Harvard’s $35.7 billion endowment.
Narvekar made the changes after HMC posted negative 2 percent returns on its investments and the size of the endowment shrunk by nearly $2 billion. These losses have already prompted Harvard to reduce pay bumps for some employees and faculty.
The endowment’s lackluster performance could constrain budgets across Harvard for years, University President Drew G. Faust said in September.
HMC spokesperson Emily Guadagnoli declined to comment on HMC’s efforts to sell $2.5 billion in equity, capital, and investments.
—Staff writer Caroline S. Engelmayer can be reached at firstname.lastname@example.org. Follow her on Twitter @cengelmayer13.
The Urgency of the PresentAs crass as it might be to say, money makes Harvard go round.
Harvard Management Company to Lay Off Half Its Staff
With an External Real Estate Team, HMC May Face Increased Fees
Alumni Group Critiques Harvard’s Investment Strategy in Letter to FaustMembers the Class of 1981 suggested significant changes to Harvard Management Company’s investment philosophy in a letter to Faust.
HMC to Unload Private Equity AssetsHarvard Management Company—the firm managing Harvard’s $35.7 billion endowment—is nearing the final stage in talks to sell over $2 billion in private equity and real estate assets to Lexington Partners.