You're on notice, duck boats.
You don’t become the biggest higher-education endowment in the known universe by making a lot of mistakes, and Harvard’s hasn’t. I mean, sure, there was that time the school rejected Steve Schwarzman, costing it an eventual $150 million. And while the school did accept John Paulson, it chose not to give him a chunk of money to play the housing market in 2006 which, in retrospect, would have been a very good thing to do. But on the whole, it has been pretty smooth sailing for the $36 billion ship, at least until recently. All of a sudden, HMC finds itself lagging the likes of Dartmouth and Penn—not in size, of course, but in how quickly its size is growing. And that was before a little hedge-fund-turned-maritime-freight-fund-turned-boat-charter business, that Harvard’s endowment happens to own 48% of, ran aground.
Harvard Management Co., which oversees Harvard’s $36 billion endowment, owns 48% of Global Maritime, which filed for chapter 11 protection Tuesday. An affiliate of the endowment manger has agreed to lend $2 million to the company to safeguard Global Maritime’s ships around the globe from being seized by creditors.
Global Maritime has no secured debt, but it has been losing money for years. It owes unsecured creditors, including Harvard management, about $169 million. According to the company, too many ships are chasing too little business, and the resulting volatility in charter hire rates rendered it unable to carry its debt load.