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The Harvard Management Company boosted its investments in Grab — a Singaporean all-in-one app offering food delivery, transportation, and digital payment services — and modified its biotechnology portfolio during the last quarter of 2022, according to a Feb. 10 financial disclosure.
HMC — which stewards Harvard’s $50.9 billion endowment — increased its holdings in Grab by 40 percent, to a total of 13 million shares at the end of December. HMC first purchased 2 million Grab shares in December 2021 at a price of $7.13 per share. At the end of 2022, HMC’s Grab shares were valued at $3.22 apiece, representing a decline of more than 50 percent.
Harvard’s investment arm discloses its direct public holdings each quarter, as is required by the U.S. Securities and Exchange Commission for managers with more than $100 million of investments. HMC’s direct public portfolio totaled $806 million during the fourth quarter of 2022, representing just 1.6 percent of the total value of Harvard’s endowment.
John M. Longo, a professor at Rutgers Business School and chief investment officer at Beacon Trust, wrote in an email that the increased shares in Grab represent a long-term growth opportunity.
“Grab is akin to the Uber of Southeast Asia, outside of China. It operates in a big market, but the company is currently not profitable. It has $6.5 billion in cash on its balance sheet so it should be able to fund the near-term losses until the company becomes profitable,” Longo wrote.
Longo also noted that Grab is based in an emerging market, which he wrote could have contributed to HMC’s decision to purchase more stocks in the company.
“Emerging market (EM) stocks were among the biggest losers in 2022 and are trading at depressed valuations so HMC’s addition of Grab may be also a play on a rebound in EM,” he said.
Consistent with previous quarters, technology companies occupied a large fraction of HMC’s public portfolio. HMC continued to directly own more stock in Alphabet, the parent company of Google, than any other publicly traded company, with its holdings in the tech giant totaling $213 million at the end of 2022.
Additionally, HMC’s holdings in Meta, formerly known as Facebook, were valued at $137 million.
The value of HMC’s investments in Scientific Games Corporation, a gambling company, ballooned by 37 percent, representing the company’s second-largest position — a title held by Meta for the previous two quarters.
In its largest liquidation of the quarter, HMC sold off 1.4 million shares of EQRx, an oncology and immunology biotechnology company based in Cambridge. The stock experienced a steady decline in share price over the past three months amid the company’s November announcement that it would shelve trials for one of its pharmaceuticals and push back a regulatory filing for another to 2027.
HMC did not invest in exchange-traded funds — managed funds that offer exposure to many underlying securities — during the fourth quarter of 2022.
Harvard has come under fire in recent years for its ETF investments, which activist groups such as the Harvard Prison Divestment Campaign allege constitute the University’s indirect exposure to the private prison industry. HMC sold off its ETF investments at the end of 2021.
—Staff writer Krishi Kishore can be reached at firstname.lastname@example.org. Follow him on Twitter @tweetykrishi.
—Staff writer Rohan Rajeev can be reached at email@example.com. Follow him on Twitter @rohanrajeev_.
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