Harvard Endowment Books 5.8% Return for Fiscal 2015, Reaches Record $37.6B in Assets

Sep 22 2015 | 7:49pm ET

Harvard University’s endowment booked a 5.8% return in its 2015 fiscal year, helping bring the biggest fund of its kind to a record $37.6 billion in assets, up 3.3% year-over-year. 

Harvard Management Company said in a letter on Tuesday that returns for the twelve months ended June 30 were driven primarily by above-average gains in equities, venture capital investments in technology and biotech, and real estate holdings. 

However, the results lagged some of its peers. Bowdoin’s $1.4 billion endowment, for instance, posted a fiscal 2015 gain of 14.4%, assisted in part by the membership of billionaire investor and Bowdoin alum Stanley Druckenmiller on the school’s investment committee. The 2015 YTD median return for endowments and foundations with more than $500 million in assets under management this year is 3.6%, according to a Bloomberg article citing an estimate by Wilshire Trust Universe Comparison Service.

Stephen Blyth, who became CEO of Harvard Management Company in January, wrote in the letter that he believed the endowment’s asset allocation framework needed work, as well as issues such as investment decision-making and compensation. 

"We have challenges ahead and much hard work to be done, but I believe we have gained significant traction in 2015," Blyth said. He added that after several years of dealing with the fallout from the global financial crisis, HMC was now in a better position to pursue its objectives.  

In the letter, performance of various portfolio components was also described. For instance, Harvard Management Company's investments in U.S. stocks returned 12.4%, ahead of the broader market’s 7.2% gain, while private equity investments earned 11.8%. Real estate, meanwhile, knocked the ball out of the park with a 19.4% return, nearly twice the performance of its benchmark.

On the other hand, HMC lost money on emerging market and international equities and foreign equities, while its absolute return portfolio essentially broke even. 

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