Harvard Sold 40 Stocks as Endowment Equities Team Was Shuttered

  • Fortress Transportation, XPO Logistics, EMC were sold
  • Management company said it would scale back direct investing

Harvard University’s endowment, which said in June it would dismantle the in-house public equities team, went on a selling spree in the last quarter.

Harvard Management Corp., whose chief executive officer resigned for personal reasons in July, liquidated 40 U.S. stocks in the quarter ended June 30 as the value of its public equity portfolio lost $160.1 million, according to a regulatory filing.

The sale represents a reversal for the $37.6 billion endowment, which two years ago began building an internal hedge fund that specialized in publicly-traded stocks in the U.S. and other developed markets. It unexpectedly pulled the plug on that expansion earlier this year, eliminating 12 positions, including Michael Ryan, a former Goldman Sachs Group Inc. partner who was head of public equities. Harvard didn’t immediately respond to an e-mail requesting comment on the regulatory filing.

CEO Resigned

Stephen Blyth, the endowment’s CEO, resigned last month after only 18 months in the job and had been on temporary medical leave since May. The head of the endowment’s board told staff after the resignation that the position would be filled in September, according to a person familiar with the situation.

Exchange-traded funds, along with U.S. shares of companies from Asia and emerging markets, now make up almost all of the fund’s top 10 holdings, according to a Form 13F filed with the U.S. Securities and Exchange Commission.

Some of the biggest sales were in industrials. HMC sold almost 3 million shares of New York-based Fortress Transportation and Infrastructure Investors LLC, which invests in aviation, energy, and rail sectors. It sold 1.7 million shares of XPO Logistics Inc., a shipping and warehousing firm in Greenwich, Connecticut.

EMC, Yadkin

The endowment also sold almost 1 million shares of software and networking giant EMC Corp., which is based in Hopkinton, Massachusetts, as well as more than 800,000 shares of Yadkin Financial Corp., a holding company for a North Carolina bank and trust company.

HMC added more than 1 million shares of iShares iBoxx $ High Yield Corporate Bond Yield ETF, making the exchange-traded fund the largest holding in the publicly traded portfolio. It also added shares of the holding company for Chinese Internet behemoth Alibaba Group and Internet search engine Baidu Inc.

While Harvard cut most of the stock market experts on its trading desk and said it would lean on external money managers, it still has a small team investing in emerging market equities.

Money managers who oversee more than $100 million in U.S. equities must file a Form 13F within 45 days of the end of each quarter to list their holdings in stocks that trade on U.S. exchanges, as well as options and convertible debt. The filings don’t show non-U.S. traded securities or wagers against stocks.

— With assistance by Sabrina Willmer

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE