Facing its lowest investment returns in three years with a 16.7% gain, Harvard's endowment, at $29.2 billion -- the worlds largest -- has trimmed its target allocation to bonds to 13%, and cut index-tracking investments to 30% according to its manager, Mohamed El-Erian. In addition, he plans to increase investments overseas in private equity, real estate and commodities. And if you need a job, he'll be hiring. He's already hired Karen Parker Feld of Wellington Management to head a new foreign exchange unit, Marc Seidner of Standish Mellon Asset Management to head U.S. bond investing, and Kathryn Murtagh of Goodwin Proctor LLP as chief compliance officer. He plans to hire an additional 15 to 25 people:
El-Erian, 48, says he's not going to let Harvard become overly reliant on a single team or strategy again. He has cut the fund's traditional dependence on bonds, shifting more assets to buyout funds and non-U.S. markets. He also hired five senior managers from Stanford, Deutsche Bank AG and elsewhere to replenish Harvard's in-house talent.
``We needed to be retooling, irrespective of whether we had gone through a transition,'' El-Erian said in an interview in his office in the Boston Federal Reserve Building, overlooking the harbor. Building management depth means Harvard should ``not have to go through such a transition again,'' he said.