As the turnover at the top attests, the Harvard job can be tough. But it also offers the biggest paycheck in the endowment world. Mendillo was paid $13.8 million in her final year in 2014, though it was inflated by the addition of six months of accelerated bonus pay because of her departure. Narvekar received $7.2 million the same year, according to a tax filing. At Rockefeller, Falls was paid $1.13 million in 2013, the latest information available.
Harvard had also been interested in Seth Alexander, who manages the Massachusetts Institute of Technology’s $13.2 billion endowment and once worked for Swensen at Yale, according to a person familiar with the matter. With a 10.5 percent average annual gain over the last decade, MIT, Harvard’s neighbor in Cambridge, Massachusetts, tied with Bowdoin College in Maine for the best endowment performance over that period.
Harvard had cast a wide net. One investor viewed as an ideal choice was Michael Larson, who manages Bill and Melinda Gates’ fortune, according to a person familiar with the search. Larson didn’t return messages seeking comment. His selection would have indicated Harvard had been interested in continuing to manage money in-house. Larson has a staff of pros at his Kirkland, Washington, headquarters who also trade directly in stocks and other investments In 2010, the group hired one of Harvard Management’s top equity traders, Stan Zuzic.
Endowments and foundations have opted for Yale’s approach in part because it is easier to hire and fire outside managers as strategies shift, said Laurence Siegel, the former head of research at the Ford Foundation, the New York-based philanthropy with about $12 billion of assets. He said the foundation at one time studied creating an internal trading team but declined to proceed.
“A building full of geniuses sometimes becomes a building full of goats,” said Siegel. “You want to be able to fire people. That’s the best way to do it.”
This article was provided by Bloomberg News.