Harvard names first CIO amid major overhaul

Harvard Management Company, which has 16.7% of its assets in private equity, is also cutting its staff headcount by half and shifting its strategy to become a generalist, rather than specialist, organisation.

Harvard Management Company (HMC), the investment arm of the Harvard University endowment, has named its first chief investment officer amid internal personnel and structural changes.

HMC announced on Wednesday it has hired Rick Slocum, who was most recently the CIO of single-family office The Johnson Company, as its first CIO.

According to a source familiar with the matter, the CIO position is newly created at HMC, which manages $35.7 billion in assets and allocates 16.7 percent, or $6 billion, to private equity, according to PEI data.

Slocum will fill the role beginning in March.

At the Johnson Company, Slocum built the investment portfolio, team and asset allocation to both third-party funds and direct investments, according to the HMC statement. He had been there since August 2011, according to his LinkedIn profile.

Prior to that, Slocum was the director of private investments at The Robert Wood Johnson Foundation for six years, managing an illiquid asset portfolio of more than $2 billion.

Earlier in his career, he served as a senior director at the University of Pennsylvania endowment, and worked in the private fund placement groups at Westdeutsche Landesbank and JP Morgan, his LinkedIn profile indicated.

Slocum’s appointment at HMC is part of an overhaul by HMC chief executive Narv Narvekar, who joined the organisation last month. Narvekar, who replaced Stephen Blyth after Blyth resigned for personal reasons in July, came to Harvard from fellow Ivy League institution Columbia University.

Narvekar joined amid efforts at HMC to turnaround its portfolio that had been producing lagging returns against its peers, such as Yale University and Massachusetts Institute of Technology (MIT). As reported by Private Equity International, HMC produced a return on investment of 5.8 percent in 2015, below the 11.5 percent generated by Yale and 13.2 percent by MIT.

Narvekar also announced on Wednesday that the overall HMC staff of 230 people will be halved as part of the organisational changes he is bringing to the endowment.

Meanwhile, HMC will become a generalist investment organisation, transitioning from its previous model of having team members focus on specific, separate strategies as specialists.

The changes also included the departure of the entire hedge fund team and the spin-out of the real estate team, according to a letter written by Narvekar.

Narvekar said in his letter that HMC’s transformation is a five-year process, adding that, in retrospect, his experience as CEO at Columbia proved that’s how many years it took to position Columbia's investment arm to generate returns in the wake of the financial crisis of 2008.

“While I believe HMC’s investment performance will be challenged in fiscal year 2017, by the end of the calendar year the organisation will look and act very differently than it does today,” he wrote.

Narvekar also named three new managing directors, all of whom had prior experience working at the Columbia University endowment. Vir Dholabhai, who was most recently the senior risk manager for Dutch pension APG Asset Management US, Adam Goldstein, who was a managing director at Columbia Investment Management Company, and Charlie Saravia, previously the co-manager of family office research firm P1 Capital, will join HMC.