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John Devir, a highly touted recent hire at Harvard Management Company, will not be joining the organization and has instead accepted an offer at Pacific Investment Management Company.
Devir, who was HMC’s third senior hire in the past year, will serve as an executive vice president for PIMCO's credit-analysis team.
PIMCO, the giant bond investment firm, is currently headed by former HMC CEO and President Mohamed A. El-Erian, who left after a brief two year stint at the Harvard organization. HMC is the organization responsible for managing the University's endowment.
At the time of the announcement of his hiring, HMC Head of Internal Management Stephen Blyth said that Devir would bring "extensive experience of equity markets in the Americas and Europe to Harvard’s internal investment team.”
Devir was to serve as HMC’s managing director of stocks in developed markets. University Spokesman John Longbrake told Bloomberg only that Devir “would no longer be joining the investment team” and declined to comment further.
Devir’s departure is emblematic of HMC’s long-running difficulty in retaining talented hires. In perhaps the best known example, when former CEO of HMC Jack R. Meyer left to start his own hedge fund, he took 30 of HMC’s employees with him.
One of HMC’s challenges has been in managing compensation levels, which Meyer has said strained HMC's relationship with the University. While salaries of portfolio managers are well below Wall Street standards, critics have said HMC investors are paid excessively given the company’s altruistic mission.
Jane L. Mendillo, the current CEO of HMC, has modified the compensation structure so that salaries of investors are tied even more closely to investment performance. Mendillo has also bolstered HMC’s “clawback” policy, extending the number of years that compensation is subject to review.
Nevertheless, HMC has lost a number of top employees to the private sector in recent years while at the same time Mendillo has sought to strengthen the organization’s internal staff.
In her 2010 Annual Report, Mendillo said that “the environment for attracting investment talent and experience to HMC has been favorable over the last two years and we have taken advantage of this opportunity.”
HMC appears to be entering a period of relative stability, following years of shifting leadership and after weathering heavy losses during the financial crisis that began in 2008. The endowment lost 30 percent of its value during the recession.
Recently Harvard has begun to recover, posting an 11 percent gain in the fiscal year that ended June 30, 2010, which brought the endowment’s value to $27.4 billion, the largest in higher education.
—Staff writer Gautam S. Kumar can be reached at firstname.lastname@example.org.
—Staff writer Zoe A. Y. Weinberg can be reached at email@example.com.
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