Harvard announces mass firing of its hedge-fund managers

Harvard has the world's largest university endowment, $35.7B, so much money that Thomas Piketty used its public investment records as a proxy for the likely investment returns of the super-rich in his Capital in the 21st Century.

Now, Harvard Management Company — which oversees Harvard's investments — has announced that it is slashing its payroll by laying off half of its 230-person staff, eliminating all of its internally managed hedge funds by the end of the year.

It's been a bad couple of years for hedge funds, with poor returns and a massive exodus of the super-rich from the funds.

The University has historically employed a unique "hybrid" investment model, in which HMC retains a large internal staff in addition to hiring outside money managers. But in a stark shift, Narvekar has moved to abandon HMC's investment model and instead mirror investment practices in place at many other universities.

Beyond laying off more than 100 employees, Narvekar will also direct HMC to approach a broader investment strategy. In his letter, he wrote that HMC will ease its strategy of "silo investing," in which its employees specialize in various asset classes, and move to a more "generalist" model focusing efforts on overall endowment performance.

Harvard Management Company to Lay Off Half Its Staff
[Brandon J Dixon/The Crimson]

(via Naked Capitalism)