High-risk assets served Harvard University's endowment well during the fiscal year ended June 30, Harvard Management Co. President and CEO Nirmal P. "Narv" Narvekar said in an annual report Thursday.
The university's $41.9 billion endowment returned 7.3% in "another year in which asset allocation (or risk level) played a major role in returns. Those who took the highest risks ... garnered higher returns," Mr. Narvekar wrote in the annual report for HMC, which oversees the Cambridge, Mass.-based university's endowment.
Broken down by asset class, equities returned 12.2% for the endowment, while private equity returned 11.6%; fixed income and Treasury-inflation protected securities, 8.2%; and hedge funds, 7.9%. Real estate returned -0.5%, natural resources, -6.2%; and other real assets, -17.5%. Benchmark figures were not provided.
While the endowment is looking to increase its risk tolerance, Mr. Narvekar wrote that it is also looking to remove some "illiquid portfolio anchors weighing down the overall portfolio ... over the next two fiscal years."