The $7.1 billion Harvard University Endowment Fund is in the process of moving about 5% of its assets into commodities, said Verne O. Sedlacek, executive vice president and chief financial officer for Harvard Management Co. Inc., Boston.
Speaking Nov. 2 at a Futures Industry Association conference in Chicago, Mr. Sedlacek said Harvard's executives are attracted to commodities' negative correlation with other investment classes. The endowment now has about $123 million in direct placement commodity strategies - including energy-related drilling and gold mining - and about $107 million in long commodity futures market positions, he said.
Harvard uses an internally developed commodity benchmark that includes a 14.9% allocation to coal and 10% to timber, although endowment officials are considering adopting the Goldman Sachs Commodity Index, he said.
Previously, Harvard officials shied away from the GSCI because it was "too futures oriented," he said, and it originally didn't include natural gas.