Remember when everyone wanted to be able to invest “like Harvard” does? (Of course this really just translated to a massive move into equities and increasing reliance on hedge funds and managers). In retrospect, you could easily called the top for endowment investing by noticing the sudden surge in related books. Between Foundation and Endowment Investing: Philosophies and Strategies of Top Investors and Institutions, How Harvard and Yale Beat the Market: What Individual Investors Can Learn From the Investment Strategies of the Most Successful University Endowments and The Ivy Portfolio: How to Manage Your Portfolio Like the Harvard and Yale Endowments, there was ample evidence that someone was in for a major crash. What was it going to take, the Harvard Shea Stadium?
So no one should be surprised to read that Harvard has pissed away $8 billion… in just four months (and that’s not counting a few managers who haven’t reported in yet).
No word on what will be done with the remaining $36.9 billion.
Harvard’s endowment takes $8 billion hit [Associated Press]
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Bad news for PE badasses.
HBS produces more retarded people than most. All people that can write you a nice book report but cant operate in the real world. I dont say this to be a d-bag, I have worked with a bunch of em so it is an informed opinion.
I do feel bad for the Endowment, Im sure they thought the funds would be adequately hedged, hence the name hedge fund but all that logic went out the window apparently.
@2
when you took a shit this morning, did you happen to see a big, grayish, pudding-like chunk in there?
Don’t worry, when asked about this trifling $8 bil., the Harvard PM will talk his questioner to death.
@2
HBS grad here. It’s true. I’d rather work in my ivory tower than descend to the dirty real world
@2:
Wrong, the Harvard fucks are all too good at operating in the real word, that’s the problem. They’re all hat and no cattle. They’re dumb as bricks and have relied on kissing ass or family connections their whole lives. I mean look at the state of this nation after only 8 years of a CEO from HBS. Look at the TARP, another HBS invention. They’re completely fucking useless, except for running power point presentations. I hope Harvard burns through the rest of its endowment and they auction off HBS to Northeastern, where it belongs.
@6, 2 here and I totally agree. Well put. @5, this sounds like you no? Where is your Ivory Tower Freshkills Landfill?? You are a tool, kill yourself
THIS IS HILARIOUS!!
Go to hell, Harvard. Bet you wish you had El-Erian now.
I thought this was a finance board, all i hear here are frustrated misfits that didn’t make the cut.
What’s with all the bad mouthing of HBS grads saying that they don’t know how to manage real life situations? Didn’t George Bush graduate from HBS? Wait, never mind.
Wow. No wonder HBS grads suck. They can’t even manage their OWN money. $8B+ in 4 months, that is really f*cked up.
Do you like apples? Huh? Do you?
Harvard’s endowment is still bigger than yours, even after losing $8 billion.
How do you like them apples?
Wannabes-but-couldn’t-bes.
Impeccable timing on the part of El-Erian. Probably most of the crap, illiquid P/E allocation was made even before his time, but he did know when to make his getaway.
Poor Harvard… now the Assistant Dean of Diversity is going to have to do without a Deputy Assistant Dean for Sexuality Issues. Might as well send your kids to a state school.
Unreal. So much bitterness directed at H, and HBS in particular. Look fellas, there are some very bright people at H, but also a lot of hot air and attitude as well. However, that doesn’t make H any different than Wharton, Chicago, Columbia or other finance-jockey schools, it is just more so, in every way (the smartest are smarter, the clueless/arrogant are the most clueless/arrogant). My firm interviews there, and it is what it is, so just relax about it.
So Harvard Management Co got crushed this past quarter. Hello, who didn’t?? They have pounded out gravity-defying returns for years, and are still well above water. Unlike you, Mr. Equity Mutual Fund CFA lemming, who has not made a dollar of profit over the last 10 (yes, 10) years. The real worry is the new CIO, who is a sharp downtick from the previous two, so we’ll see. Betting is that Yale and Harvard endowments will take lumps, make some smart opportunistic bets, and move on.
For those of you watching the endowment pools at the wannabe schools (e.g.,Brown, Cornell, Amherst, Williams etc) be very afraid. These are the people that will follow what they think is the Harvard/Yale model right off a cliff.
@14, you are one of those knobs who uses financial terms for non financial situations? :Hes a sharp downtick to the previou two”? When you see a hot girl at the bar, do you tell your friends”Im a size buyer of that blond chick” orat dinner you say”Im short that lobster”.
People hate HBS and H for the same reason they despise Goldman. Sweet that they are both shtting the bed right now
@14, you are one of those knobs who uses financial terms for non financial situations? :Hes a sharp downtick to the previou two”? When you see a hot girl at the bar, do you tell your friends”Im a size buyer of that blond chick” orat dinner you say”Im short that lobster”.
People hate HBS and H for the same reason they despise Goldman. Sweet that they are both shtting the bed right now
this is all very entertaining. it seems everyone likes to bash hbs (still bitter they rejected you?). anytime the folks at the top take a hit, schadenfreude ensues – hbs is not immune. sure, the school takes in its pile of nitwits, they accept the largest class of mba students of all the programs out there (what would you expect?)…they are just playing the odds. they are hoping a handful will turn out to be successful (and they usually get lucky). it’s trying to manage to keep the other 875 people out of the headlines that gets them in trouble. back to work b1tches!
@14 I hope you were merely comparing HBS with “finance-jockey” schools like Wharton, Columbia and Chicago and not slotting it with them.
HBS isn’t exactly known for its finance education. They are more of a general management/strategy school.
18 That strategy strength is why HBS people are basically useless when it comes to getting things done. They can pontificate and opine, but ask them to close a deal, make things happen and they freeze. Which is why you’ll find a lot of them in consulting.
@19 – I had a professor in undergrad who mixed in case study with the “rigor” of the convential program. it seemed to be quite effective, esp when it only comes a few times a semester. that way, you can’t just use the last lesson and apply it to the case – one actually has to think. so, I guess I’m in partial agreement with you, but don’t believe the case method is a total waste (esp. if you have studied finance before).
@16 – I’m short your intellect, you knob.
@21 – I agree that 100% case study is a sure ticket to the land of the brain dead (ie management consulting). Mixed in with other methods, though, and it makes some sense. Btw, I have yet to meet an HBS grad who can do math, but that doesn’t make them bad people.
Harvard for Life Bitches – all your future bosses are my classmates and friends!
@19, 21
‘COO Yoshi Miyamato sipped chamomille tea in his I.M. Pei-designed Osaka skyscraper as he pondered supply chain management at his Korean LCD screen factory’
The envy runs deep.
Didn’t one of our recent Presidents graduate from HBS?
Ok kiddies, Bush isn’t representative of the greater HBS population; he may be the stereotypical HBS kid (rich, well-connected, relatively useless otherwise), but don’t confuse a (oft’ occuring) observation with the mean and whatnot
I’m sure someone who’s better informed will correct me, but I seem to recall that the Harvard endowment was run by a guy (can’t remember the name; I’m sure someone knows who he was) who made billions for them in the 90′s, and was making close to $1 billion a year himself in bonuses. The eggheads at HBS were pissed that someone else was making so much money, so they capped his bonus, at which point he left. Since then the returns have been, shall we say, not so much?
As co-author of the aforementioned “Foundation and Endowment Investing”, the best way I could explain how the book is different from the others you mention is to quote this excerpt from the book’s foreword, written by my co-author, Larry Kochard, who is the CIO of the Georgetown University endowment.
“Swensen’s success over many market cycles clearly warrants the amount of attention he has garnered over the past few years. Other investors have become interested in learning about his “secret sauce”… My response has always been that we should strive to achieve a process, philosophy and discipline that contributed to Swensen’s success, but shouldn’t imitate the investments of Yale’s that worked in the past. This “rear-view-mirror” approach to investing inevitably leads to disappointing results.
“Reaching out to peers in the endowment and foundation community made me realize that other CIOs have had investment success similar to Swensen’s. Having enjoyed reading books like Market Wizards written by Jack Schwager and Investment Gurus by Peter Tanous, in which the authors interview portfolio managers to learn from their experiences,. I tried to find a similar book about foundation and endowment CIOs. None existed. The world was familiar with David Swensen and to a lesser extent, Harvard University’s Jack Meyer, but it ended there.
“I wanted to learn about the experiences of these other accomplished endowment and foundation CIOs… They have influenced me as much as Swensen … and other investors could benefit from hearing about the approaches and philosophies of endowment and foundation investors who deserve similar credit for the investment programs and offices they helped build.”
So neither Yale or Harvard are featured in the book, but we did profile 12 other leading Chief Investment Officers. I basically agree with “guest” that posted at 11:05 am. Again, the best way for me to describe it is to repurpose content I have written previously, a comment I posted on another blog 2 weeks ago.
“These institutions are taking hits to their portfolios and facing tough challenges, but in the long run (before we are all dead) their days of outperformance will continue. The days of institutions blindly copying Yale’s policy asset allocation, are indeed over. As Andrew Bary wrote in Barron’s, “The Swensen approach may be too aggressive, particularly for endowments that need access to their money and have less skilled managers than Yale’s”. Or as Jeremy Grantham said, “It’s obvious to me that few of those emulating Yale have the resources of Yale and the talent of Yale to pick the right managers.”
Basically, the message of our book is the opposite of the message of the 2 other books. It was the one book of the 3 that provided real investors with enough information to know that there are more ways to invest than copying an institution that’s larger and smarter than you. Otherwise, as one consultant told us, “you will be buying what they are selling.”
Don’t get me wrong, we admire David Swensen tremendously but too many have answered the question “What would David Swenson do?” with “What DID David Swensen do?”. As we proved in our book, there are numerous ways to construct a successful endowment-style portfolio, but the best way is the one that is tailored to your institution and to your level of knowledge and expertise.
Cathleen M. Rittereiser
Co-Author, Foundation and Endowment Investing
http://www.cathleenrittereiser.com