“When genius fails…it fails big.” – Forbes Magazine
Just a matter of weeks ago, 10 Harvard alums were calling for the $26.8 million in executive bonuses of Harvard Management Company to be given back to the College’s endowment, following the loss of more than $8 billion in the endowment fund since the previous fiscal year.
Long known for its prowess in investment circles, HMC had grown Harvard‘s endowment to mythical proportions.
When the class of ’69 began saying “Give it back!” public sentiment ranged from “Right on, ” to the money managers had a contract which Harvard must honor, to questions regarding whether the Harvard group was emerging from the ’60’s drug haze??
However, shortly thereafter 25% of the money managers were “pink slipped.”
And now comes a comprehensive look at Harvard Management’s investment philosophies and performance which led Forbes to conclude the following:
Watching all of this, the group of 10 Harvard alumni from the class of 1969 feel vindicated. “The events of the last year show that the whole procedure of rewarding people so handsomely based on increases on paper value of the endowment was deeply flawed,” says a spokesman for the group, which recently sent a letter to the Harvard president suggesting HMC staffers return $21 million of their latest bonuses. “Even now, we don’t really know how well it has done in the last 10 years.” – Forbes.com
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