Risk-Adjusted Returns
HMC's generalist investment model breaks down silos among asset classes to search the world for the most attractive risk-adjusted returns. A central tenet of our investment culture is a belief that a disciplined set of processes, practiced by a capable and experienced team, will generate superior long-term results.
We are keenly focused on building processes—and supporting analytics—and executing them consistently. We combine these processes with a partnership culture in which the collective team engages in focused debates about investment opportunities both within asset classes and across the investment universe. The result is an investment team with a singular focus: the performance of the overall endowment.
Our risk allocation framework expresses the portfolio in terms of exposure to betas and alphas, and gives us a perspective on the portion of risk, rather than the portion of dollars, coming from any such exposures. Ultimately, our framework gives us an estimate of total risk of the portfolio, aiding deep conversations with the university in determining the appropriate level of risk for Harvard.
Partners in Investment
For over 45 years, HMC has developed and maintained partnerships with a variety of world-class asset managers. Our long-term outlook gives us an edge in many facets of investment management. HMC was among the earliest institutional investors in venture capital, one of the first in natural resources and emerging markets, and a leading investor in some of the most successful absolute return and direct investment strategies.
Our partners include both early-stage and established investors, small and large institutions, and incorporate a wide range of mandates—geography, sector, and strategy. The common thread between them all is that they are investors, rather than asset gatherers, who see the world differently. HMC encourages this contrarian perspective and offers deep expertise in a variety of fields to support their endeavors.
If you would like to join this network of more than 100 investment partners, we encourage you to contact partnerships@hmc.harvard.edu.
To learn more about HMC's ongoing efforts to increase opportunities for diverse-owned asset managers, please read the University's July 2020 letter to Congress.
HMC Performance
The annualized return on the endowment, since HMC’s founding, has been approximately 11% per year and the endowment was valued at $50.7 billion on June 30, 2023. In fiscal year 2023, distributions from the endowment contributed over one-third of Harvard University’s operating budget.
HMC ANNUAL REPORT
