• Home
  • News
  • Coins2Day 500
  • Tech
  • Finance
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia
Finance

Harvard’s Endowment Just Took Its Biggest Hit Since the Financial Crisis

By
Reuters
Reuters
Down Arrow Button Icon
By
Reuters
Reuters
Down Arrow Button Icon
September 23, 2016, 4:17 AM ET
LOWELL HOUSE, HARVARD UNIVERSITY, CAMBRIDGE, MASSACHUSETTS
Photograph by Steve Dunwell — Getty Images

Harvard University’s investment arm, which oversees America’s largest endowment, on Thursday said its portfolio lost 2% during the 2016 fiscal year, marking the single largest yearly decline since the financial crisis.

A 10.2% loss in its equity investments undermined the overall performance, Harvard Management Company (HMC) said in its annual report, which also noted that “returns could be muted for some time to come.”

During the same time the broader Standard & Poor’s 500 benchmark was flat. The fiscal year ended June 30th.

The Ivy League school’s endowment now stands at $35.7 billion, down from a record $37.6 billion a year ago when Harvard earned a 5.8% return on its investments.

See also: The Best Colleges for Your Money

Harvard, whose investment performance was once the envy of the financial world, has lagged its rivals for some years now. The school continues to grapple with considerable turnover in its top investment ranks as well as a reassessment of how the endowment is invested.

“This has been a challenging year for endowments and clearly these are disappointing results,” Paul Finnegan, chair of the HMC Board of Directors, said in a statement.

Harvard has had three investment chiefs since 2005 and is currently searching for a new one. Stephen Blyth, who held the position for only 18 months and last year vowed to improve performance, resigned unexpectedly in July after having taken a medical leave in May.

Robert Ettl, HMC’s interim president and chief executive officer, said in a statement that steps have been taken to strengthen the organization in order to improve long-term performance.

A number of other universities have also been hurt by volatile market conditions. The University of California and Ohio State University each lost 3.4% in the last fiscal year while the University of Virginia lost 1.5%.

But Harvard’s neighbor, the Massachusetts Institute of Technology produced a 0.8% gain last year. Yale, Harvard’s arch rival, has not yet released its returns.

The school has been trying to mount a comeback since it lost 27.3% in 2009 during the financial crisis.

For decades, Harvard has been different from most other schools, including Yale, in that it managed some of its money internally while farming the rest out to external managers.

See also: An American University Is No Longer the Best in the World

Earlier this year, Harvard decided to have outside managers make more of its equity investments and scaled back its internal stock picking operation.

But the outsiders had some trouble too during the most recent year, Ettl said. Some of them had similar stock investments, particularly in health care, which helped contribute to the losses, he said.

“A number of our domestic equity external managers underperformed for the first time in many years,” Ettl said in the statement.

Natural resources investments also fell 10.2%, trailing far behind its benchmark. Real estate investments, which have been winners for some time, produced a 13.8% gain, beating its benchmark which climbed 9.4%.

About the Author
By Reuters
See full bioRight Arrow Button Icon
Rankings
  • 100 Best Companies
  • Coins2Day 500
  • Global 500
  • Coins2Day 500 Europe
  • Most Powerful Women
  • Future 50
  • World’s Most Admired Companies
  • See All Rankings
Sections
  • Finance
  • Leadership
  • Success
  • Tech
  • Asia
  • Europe
  • Environment
  • Coins2Day Crypto
  • Health
  • Retail
  • Lifestyle
  • Politics
  • Newsletters
  • Magazine
  • Features
  • Commentary
  • Mpw
  • CEO Initiative
  • Conferences
  • Personal Finance
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Coins2Day Brand Studio
  • Coins2Day Analytics
  • Coins2Day Conferences
  • Business Development
About Us
  • About Us
  • Editorial Calendar
  • Press Center
  • Work At Coins2Day
  • Diversity And Inclusion
  • Terms And Conditions
  • Site Map

© 2025 Coins2Day Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Coins2Day Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.