Harvard Management Company, the University’s investment arm, invests more heavily in technology companies than the other four largest university endowments in the country, according to the most recent U.S. Securities and Exchange Commission filings.
Nearly 83 percent of Harvard’s declared securities investments are in four large technology firms: Microsoft, Apple, Facebook, and Alphabet, Google’s parent company, according to its 2018 fourth-quarter filings, which were released earlier this month.
In comparison, just a year ago, SEC filings indicate that Harvard did not directly invest in tech stocks at all.
The other top four university endowments — Yale University, Princeton University, Stanford University, and the University of Texas system — invest far less in information technology. Out of these four, Princeton invests the most in technology stocks, with just under 5 percent of its securities holdings in technology stocks, according to its SEC filings from the same period. Technology stocks comprise less than 1 percent of all securities for Yale and Stanford.
Stocks held through exchange-traded funds, while reported to the SEC, are not included in these breakdowns. The rest of Harvard’s holdings that are not in tech are largely in exchange-traded funds.
Harvard is also an outlier when it comes to investments in one particular D.C.-based real estate firm. Princeton, Yale, and MIT all hold substantial stakes in the firm, JBG Smith Properties, and Princeton’s stake in JBG Smith represents 93 percent of the university’s total securities. Harvard, on the other hand, had no direct holdings in JBG Smith as of the end of 2018.
Technology stocks have done well so far this year compared to the overall stock market. The S&P 500’s information technology index has increased 12.1 percent since the beginning of the year, whereas the overall S&P 500 is up just 10.9 percent.
The SEC requires investment managers — like HMC — with more than $100 million under management to disclose securities holdings annually. Managers are not required to report mutual fund holdings, but they must include their exchange-traded funds.
The $475 million Harvard reported in securities last quarter make up a relatively small portion of the University’s overall endowment, which is valued at around $39.2 billion. Private equity and real estate investments, at 20 percent and 14.5 percent of the endowment respectively, were the largest sectors of the endowment last year.
Harvard’s endowment, the largest university endowment in the world, has seen weaker returns than its Ivy League peers in recent years. Last year, only Columbia’s investment returns trailed Harvard’s. The exclusive group of university endowments that exceed $500,000 per student is bracing for a new 1.4 percent federal tax on endowment returns that will be levied for the first time this fiscal year.
—Staff writer Luke W. Vrotsos can be reached at firstname.lastname@example.org.
—Staff writer Cindy H. Zhang can be reached at email@example.com.