N.P. "Narv" Narvekar, president and CEO of Harvard Management Co., which oversees the university's endowment, said in a message to Harvard associates that the negative return "reinforces the necessity of focusing on long-term, risk adjusted returns."
In his message, Mr. Narvekar noted that while the endowment had “unusually strong” benchmark-relative performance by its public equity, private equity and hedge fund asset classes during the past four fiscal years, the year ended June 30 “was not a strong benchmark relative year.”
He also noted that while a number of institutional investors were able to take advantage of returns in the conventional energy sector, either through equities or commodity futures, Harvard Management did not participate in those sectors given the university’s “commitment to tackling the impacts of climate change, supporting sustainable solutions, and achieving our stated net zero goals.”
While Mr. Narvakar did not provide specific return information by asset class, he said the private portfolios of buyout funds, real estate and venture capital were the strongest performers.
“For example, the venture capital portion of HMC’s private equity portfolio returned high single digits despite the deeply negative performance of relevant public equity indices,” Mr. Narvakar said. “On the other hand, some venture managers have meaningful exposure to public companies, which declined with public markets. Accordingly, the performance of venture portfolios during FY22 was largely a function of the proportion of public companies held in those portfolios.”
However, the endowment’s return did exceed the median return of -3.1% among the 26 university endowments whose returns for the year ended June 30 have been tracked by Pensions & Investments as of Thursday.
