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Harvard’s endowment returns are the worst in the Ivy League

Obsession
Future of Finance
Obsession
Future of Finance

Harvard’s multi-billion-dollar endowment hasn’t been making the grade.

Now Jane Mendillo is stepping down as head of Harvard Management Company, the entity that oversees the university’s $32 billion hoard.

Mendillo was named (paywall) president and chief executive of the college’s investment arm back in July 2008. She replaced Mohamed El-Erian, who had run Harvard’s money for a little more than a year, racking up a stellar 23% return in his first year on the job, the Wall Street Journal reported (paywall). El-Erian then left to join giant bond fund manager Pacific Investment Management Company in 2007 (he has recently announced that he is leaving PIMCO).

Jane Mendillo, president and CEO of Harvard Management Company, speaks at the Partner Connect 2013 conference, sponsored by Thomson Reuters, in Boston April 3, 2013.    REUTERS/Brian Snyder    (UNITED STATES - Tags: BUSINESS) - RTXY78G
Former head of Harvard Management Company, Jane Mendillo. (Reuters/Brian Snyder)

Mendillo had the misfortune of taking the reins of HMC just as the markets were headed for a historic tumble. (The endowment posted a loss of 27% in 2008.) The endowment, which had totaled roughly $35 billion when Medillo took over, never quite recovered. But it is still, by far, the largest in the Ivy League.

Here’s an excerpt from New York Times, describing the performance of the Harvard’s endowment:

Largest-Ivy-League-endowments-Size-of-Endowment_chartbuilder (1)

Over the five-year period ending June 30 of last year, the Harvard endowment had an annualized return of 1.7 percent, the worst among the Ivy League, according to data compiled by Charles A. Skorina, the founder of an executive search firm that specializes in hiring chief investment officers.

But actually, Harvard’s returns have put it—horror of horrors—behind some non-Ivy League schools too, including elite universities such as Stanford, the Massachusetts Institute of Technology and the University of Chicago.

Five-year-endowment-returns-of-US-elite-colleges-as-of-2013-Five-year-return_chartbuilder (1)

Mendillo, a Yale University School of Management alum, didn’t comment on the reasons for her departure in an interview with the New York Times, other than to say that she feels the university has “made a great recovery from the financial crisis, we’ve repositioned the portfolio and we’ve built a great team.”

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