Wednesday, 4 May 2016
Last updated 6 hours ago
Aug 29 2014 | 7:20am ET
Harvard University is defending its endowment compensation, noting that its move to manage more money in-house, rather than at hedge funds, has saved the school more than $1 billion.
A group of Harvard alumni from the class of 1969 wrote the university President Drew Faust this month, blasting the amount paid to Harvard Management Co. portfolio managers. The top five, the group noted, received $28.8 million last year, up from $25.2 million in 2009.
The alumni, who have long been critical of HMC’s pay practices, said they were “astonished by what we have discovered.” The group said it is in favor of putting less money with hedge funds, but that in-house managers should be paid less.
Harvard defended HMC, saying that its “unique hybrid model has saved the university more than $1.5 billion in management costs compared to what an equivalent external management strategy would have cost over the past decade.”