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Harvard Management Company—which oversees the University’s multi-billion dollar endowment—announced a new managing director of real estate investments Tuesday, after the position had remained vacant for over a year.
Daniel W. Cummings, a former managing director at private equity titan The Carlyle Group, will join the Company at the end of June.
The appointment comes at a crucial time, with University officials scrambling to adjust budgets to accommodate a projected 30 percent drop in the endowment for the fiscal year. HMC’s previous director for real estate, David Ferrero, stepped down in Aug. 2007, according to money management newspaper Pensions & Investments.
HMC announced in February that it would lay off roughly a quarter of its 200 employees, mostly support staff, in an attempt to “re-balance and re-engineer the organization.”
Real estate has traditionally been a difficult asset class to valuate and provides very limited liquidity. According to a University statement, real estate investments currently make up approximately 7 to 8 percent of the University’s endowment—a slight drop from the 9 percent, or almost $3.5 billion, allocated in 2008.
Cummings will work with HMC’s head of external management, CEO, and real estate team to fill a “critical and strategic role” for the company “in light of the current global credit and real estate market environment,” according to a University statement.
Jane L. Mendillo, President and CEO of HMC since last July, praised Cummings’ “depth of national and global experience,” “sharp eye for anticipating market trends,” and “outstanding ability for developing innovative investment strategies.”
Cummings, who is currently a managing director at real estate investment firm Matapeake Partners, once managed $22 billion worth of North American and European public and private real estate investments for LaSalle Investment Management, where he served as a Co-Chief Executive Officer and Co-Chief Investment Officer.
Real assets as a whole—which include liquid commodities, real estate, and timber and agricultural land—represented 26 percent of the endowment in 2008, according to a Harvard financial statement. Last year, the real estate portfolio provided returns of 3.2 percent—beating the HMC board-approved benchmark of 2.4 percent.
Cummings, a Chicago and Dartmouth graduate, said in the University statement that he was “honored to be joining such a world-class group of investment managers,” and that he looked forward to furthering Harvard’s educational and research mission.
Cummings did not respond to requests for comment at his Matapeake office, and former real estate director Ferrero was traveling Thursday, according to a staff member at his current firm.
—Staff writer Peter F. Zhu can be reached at email@example.com.
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