Harvard Management Company (HMC), which manages the $32 billion Harvard endowment, has made significant alterations to its policy portfolio, including increasing allocations to emerging market equities and the externally-managed absolute returns program, while slashing fixed income allocations.
Two interwoven areas of investment management – liquidity and risk management – have become a boon for academics in the wake of the financial crisis and the liquidity black holes that apparently formed within endowment and pension funds. It may seem to be an overabundance of research, but it’s in line with demand.
The Harvard Management Company is actively using ETF’s for geographical tilts, with exposure to China and Brazil through iShares investments its two largest holdings at the end of December 2010.
Harvard Management Company will increase manager concentration levels, look closely at commodities and real estate, and bring more assets in-house where appropriate, as it moves into fiscal year 2011 with an unchanged long-term asset allocation.
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