Harvard’s not-so-smart endowment

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Sept. 30, 2024

A sculler rows on the Charles River past the Harvard University campus in Cambridge, Massachusetts. Photographer: Victor J. Blue

Read the story With more than $50 billion in assets as of June 2023, Harvard's endowment remains the biggest in higher education. But poor performance over the past 20 years means its status is under threat. The lagging returns stem from a classic investment mistake: shifting strategies at inopportune times, chasing gains and, in short, buying high and selling low. The school ratcheted up risk before market downturns, then cut its exposure right before markets recovered. It bought once hot investments, only to watch them go sour. Recently, Harvard piled into private equity right before its performance lagged.  "You just feel they're playing catch-up ball," says Mark Williams, a lecturer in finance at Boston University who's followed Harvard's endowment for years. Read The Big Take. In case you missed it… Bangladesh, home to the world's fourth-largest Muslim population, is at a critical turning point. Militants are gaining strength after a tumultuous change in government, creating security concerns across Asia. Western and Indian officials fear Islamist extremists are on the verge of gaining a foothold in the country as higher tensions in the Middle East provide a ripe environment for recruitment. Read the Weekend Big Take

Listen to the podcast Harvard University ceded its early edge by switching endowment managers and strategies at the worst times—and paying top dollar for lackluster returns. Subscribe and listen on iHeart, Apple and Spotify.

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