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Endowments

Private, public equity lead asset class returns for Harvard

Private equity and public equity were the only asset classes with double-digit returns in fiscal 2018 for Harvard University's $39.2 billion endowment.

The Cambridge, Mass., endowment's returns per asset class for the fiscal year ended June 30 were 21% private equity, 14% equities, 9% real estate, 6% hedge funds, 1% fixed income, -1% other real assets and private debt, and -2% natural resources.

"While we are not pleased with this performance, we are mindful that ours is an organization and a portfolio in transition," wrote Nirmal P. "Narv" Narvekar, president and CEO of Harvard Management Co., which oversees the endowment, in the annual report that disclosed the figures.

"There are certain parts of the portfolio that need work," Mr. Narvekar added, and the management company is "hard at work to improve those asset classes for the future."

Harvard's endowment returned 10% for the fiscal year ended June 30, according to a note Mr. Narvekar sent to Harvard associates in September.

The endowment's asset allocation as of July 1, 2017 was 31% equities, 21% hedge funds, 16% private equity, 13% real estate, 8% fixed income, 6% natural resources, 3% cash and 2% other real assets and private debt.

Since taking over as CEO in December 2016, Mr. Narvekar has reduced and reorganized HMC's staff to change its investment strategy from a specialized or "silo" approach to a generalist investment model in which all members of the investment team take ownership of the entire portfolio.