OK, Harvard lost 27%. That’s better than most institutions did. Maybe they should have held the cash account separate, but I don’t get the big finger pointing aspect of the article. In a growth investing program with multiple managers, there will always be some who are right in retrospect because they were cautious, and some who are right in retrospect because they were more aggressive. Hindsight is 20-20.
There was a problem in that the decision making became decoupled from the experts, so the head didn’t know what the body was doing, but overall, Harvard did OK.
Part of the problem at Harvard, which I didn’t see in this story (other than a passing reference to issues in compensation) is that Harvard began to pay their investment team like an investment bank— if you want to make big money for yourself, you must take huge risks with someone else’s money. I have read in other stories that there wasn’t any balance in their investing strategy, because the investment officers would have to work for peanuts in order to protect the University’s position....
hh