Harvard Endowment laying off half its staff

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letsgobobby
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Harvard Endowment laying off half its staff

Post by letsgobobby » Wed Jan 25, 2017 3:49 pm

http://www.wsj.com/articles/harvard-to- ... 1485363650

Not exactly an admission of the failure of active investing... but not exactly not, either.

livesoft
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Re: Harvard Endowment laying off half its staff

Post by livesoft » Wed Jan 25, 2017 3:52 pm

It reads like the staff that is let go will just go to work at the places that Harvard outsources things to.
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imoapie
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Re: Harvard Endowment laying off half its staff

Post by imoapie » Wed Jan 25, 2017 3:53 pm

Aren't they just giving the money to hedge funds?

staythecourse
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Re: Harvard Endowment laying off half its staff

Post by staythecourse » Wed Jan 25, 2017 4:00 pm

This is a great in vitro study on a few things:
1. Incredibly smart folks can do some incredibly dumb things. Not learning it is active management that is the problem and NOT who is running the active management.
2. Wall street has A LOT of influence on everything. Point being convincing folks at Harvard the problem is NOT active management, but doing it internally and not using the great active managers out there in the world.
3. There will never be an end to active management. If greed is so powerful that smart folks don't get it then others are more then likely to drink the came Kool aid.

Would love to see the comparison of Harvard endowment to that of Nevada pension plan who is run by single person.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

bigred77
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Re: Harvard Endowment laying off half its staff

Post by bigred77 » Wed Jan 25, 2017 4:04 pm

staythecourse wrote:This is a great in vitro study on a few things:
1. Incredibly smart folks can do some incredibly dumb things. Not learning it is active management that is the problem and NOT who is running the active management.
2. Wall street has A LOT of influence on everything. Point being convincing folks at Harvard the problem is NOT active management, but doing it internally and not using the great active managers out there in the world.
3. There will never be an end to active management. If greed is so powerful that smart folks don't get it then others are more then likely to drink the came Kool aid.

Would love to see the comparison of Harvard endowment to that of Nevada pension plan who is run by single person.

Good luck.
IMO the reason Harvard and their ilk utilize active management is because:

Many Harvard graduates go on to work as asset managers, portfolio managers, hedge fund managers, PE analysts, etc.

Those Harvard alumni hire the next crop of Harvard graduates when they get into hiring positions.

Some of those Harvard graduates get rich doing that work. Like really, really rich.

Some of those really, really rich graduates give a boatload back to Harvard that gets put right back into the endowment.

Harvard is not going to stop investing in active management, PE, hedge funds, etc. anytime soon.

lack_ey
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Re: Harvard Endowment laying off half its staff

Post by lack_ey » Wed Jan 25, 2017 4:07 pm

Similar article about the same underlying move but not behind paywall, from Pensions&Investments:
http://www.pionline.com/article/2017012 ... operations

They're just doing a reorganization from individual silos responsible for their own part of the portfolio to a generalist, top-down approach. This involves spinning out some of the internal team to be doing much the same things externally, so not necessarily a big change of strategy.

For the record:
Image
http://www.hmc.harvard.edu/docs/Final_A ... t_2016.pdf

acr93
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Re: Harvard Endowment laying off half its staff

Post by acr93 » Wed Jan 25, 2017 4:13 pm

Here is a short article comparing the Harvard Endowment, the California Pension Plan, and the Nevada Pension:

http://www.marketwatch.com/story/how-on ... 2016-10-28

Unfortunately, it doesn't go as far as to draw the conclusion that active managing is a negative. Just that Harvard must not be doing right :/

staythecourse
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Re: Harvard Endowment laying off half its staff

Post by staythecourse » Wed Jan 25, 2017 4:23 pm

bigred77 wrote:
staythecourse wrote:This is a great in vitro study on a few things:
1. Incredibly smart folks can do some incredibly dumb things. Not learning it is active management that is the problem and NOT who is running the active management.
2. Wall street has A LOT of influence on everything. Point being convincing folks at Harvard the problem is NOT active management, but doing it internally and not using the great active managers out there in the world.
3. There will never be an end to active management. If greed is so powerful that smart folks don't get it then others are more then likely to drink the came Kool aid.

Would love to see the comparison of Harvard endowment to that of Nevada pension plan who is run by single person.

Good luck.
IMO the reason Harvard and their ilk utilize active management is because:

Many Harvard graduates go on to work as asset managers, portfolio managers, hedge fund managers, PE analysts, etc.

Those Harvard alumni hire the next crop of Harvard graduates when they get into hiring positions.

Some of those Harvard graduates get rich doing that work. Like really, really rich.

Some of those really, really rich graduates give a boatload back to Harvard that gets put right back into the endowment.

Harvard is not going to stop investing in active management, PE, hedge funds, etc. anytime soon.
True, but think the amount they give back to the university is PEANUTS compared to the value of the endowment itself. Also, don't forget even if they are kicking back money to the university in "donations" they are still getting quite a salary from the admin. fees.

I wonder what numbers they ran to convince the powers that be that they can make them more money to offset the higher admit/ management fees now given to outsourced active managers and hedge funds vs. prior when the folks running them were just paid more of a salaried position. I would love to see how they played the numbers or internally the % improvement they would need to see a drastic improvement AFTER fees with this outsourcing approach.

I trained at Harvard and frankly saw the same stupid mistakes there I have seen anywhere else so I am not surprised for their lack of vision.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Re: Harvard Endowment laying off half its staff

Post by LadyGeek » Wed Jan 25, 2017 4:37 pm

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