Clueless Harvard Alum Complaints Kill Golden Geese.
This story has fascinated me for several months now, as i have read about the repeated assault on pay levels of Harvard's Mgmt Team, by a throng of righteous and clueless alums.
The returns on the endowment by the mgmt team have been nothing less than astounding. Their leveraged bond and interest rate plays (merely one example) in 2002-2004 produced jaw dropping, crystal-ball like returns. And still, their pay/take was so much less than the hedge fund industry, it was like frigging charity these guys were giving to Harvard.
Well, 5 of them are leaving.
This strikes me as a uniquely American story. Uppity, over-educated people "convinced" of their correctness on a particular position--actually work to undermine their own interests.
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By GARY PUTKA
Staff Reporter of THE WALL STREET JOURNAL
January 11, 2005 11:53 a.m.
BOSTON -- Harvard University said Jack R. Meyer, the chief executive of the internal unit that manages its $22 billion endowment, plans to leave in June to form his own investment firm with four Harvard colleagues.
Mr. Meyer and the university's administration have faced considerable internal pressure over pay levels at the investment unit, Harvard Management Co., that some alumni claim are too high.
Mr. Meyer is a well-known figure on Wall Street. Before taking his current position, he had been chief investment officer at the Rockefeller Foundation and the deputy controller for the City of New York.
Harvard also said it would form a new steering committee to "oversee aspects" of its endowment-management company, or HMC, until Mr. Meyer departs. The committee will also direct the search for his successor "and consider more generally how best to ensure HMC's future organizational strength and sound investment results," the school said.
Mr. Meyer is generally credited with getting good investment returns compared with other university endowments since joining Harvard in 1990.
Overall, Harvard's endowment, by far the largest of any U.S. university, grew 17% in the past fiscal year to $22.6 billion from $19.3 billion. The growth reflects both investment gains of 21.1% and donations, offset by spending on university operations. Over the same period, the Lehman U.S. Aggregate Bond Index had a total return of 0.32%.
In November, HMC said its two best-paid managers each received about $25 million for the fiscal year ended June 30, down from more than $35 million each the year before. |
