Jane Mendillo, president and chief executive of Harvard Management Company (HMC), the US endowment fund of Boston-based Harvard University, will step down from her positions at the end of 2014 after 21 years at the institution, according to a statement.
Mendillo will continue at the helm of the $32.7 billion LP for the remainder of the year to facilitate the transition process, the firm has said. She will also continue to serve on a number of boards and investment committees.
Harvard struggled through the financial crisis and is reportedly still recouping losses from that time.
However, Mendillo led HMC through that difficult time, repositioning key elements of its portfolio, building a new team of investment professionals and returned the university to delivering strong returns.
Since, HMC has exceeded its policy portfolio benchmark, delivering an estimated average annual return of 11 to 12 percent for the five years to 30 June 2014, according to the firm. During the same time frame, distributions from the endowment to Harvard University came to about $11 billion.
But HMC was still outperformed during the same time period by nine other US universities, with University of Pennsylvania endowment returning 14.4 percent, according to data from executive search firm Charles Skorina & Company.
Looking at five-year return figures, data showed Harvard performed the worst of all 12 university endowments featured in the report.
Nevertheless, since Mendillo was appointed president and chief executive of HMC in July 2008, she successfully reorganised and grew the firm’s investment programme.
She expanded its global reach, strengthened management and direct investment capabilities (which now make up 42 percent of HMC’s portfolio), as well as focusing the fund on certain segments including natural resources, emerging markets and real estate.
“The team’s dedication, creativity, talent and sheer hard work in the face of, and following the financial crisis has led to a dramatic recovery and a portfolio that is once again firing on all cylinders. The work HMC is doing today – on everything from asset allocation, to internal trading, to direct deals, to fund investing, to investment operations – is better than it has ever been,” Mendillo said in a statement.
James F. Rothenburg, chairman of HMC’s board of directors, added, “Under Jane’s leadership HMC has consistently outperformed its benchmark over the last five years delivering over $1.5 billion of added value to the university over the policy portfolio.”
While HMC returns to better performance, the firm has experienced some turnover in its private equity business.
Peter Dolan, one of the most influential limited partners in the industry, left his long-time perch at the endowment last April after nearly two decades.
He was shortly after replaced by Lane McDonald, who became managing director for private equity at the fund, although he left four months later to work in the private sector.
In March this year, HMC hired Richard Hall, former head of private equity at Teacher Retirement System of Texas, as managing director for private equity in McDonald’s place.