While Narvekar is gunning for results more like his peers, the enormity of the endowment only makes his job harder, skeptics say.
“There’s simply no way to significantly outperform the market when you’re a $40 billion fund,” said David Yermack, a finance professor at New York University. “It becomes more and more difficult the larger you get.”
In an annual letter released in September, Narvekar wrote that he and his team were 19 months into a five-year plan to “reposition the organization and portfolio for subsequent strong performance.”
The shift toward hedge funds hasn’t yet helped. Harvard gained 10 percent in the year through June 30, 2018, trailing all Ivy League peers except Columbia, Narvekar’s former employer. Over the decade ended in June, it had the worst results, an average annual return of 4.5 percent. Columbia gained 8 percent a year, tied for the Ivy League best.
“We are working to improve every part of the portfolio and will always do so,” Narvekar wrote in his annual letter. “High-quality people, culture and investment processes drive top long-term returns, just as they did at the endowment I previously led.”
This article was provided by Bloomberg News.