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Stephen Mihm

How Harvard Minted 'Free Money'

In the late 19th century, Harvard President Charles Eliot created an educational powerhouse that had established an almost insurmountable lead in the race to become the world’s richest university.
Veritas, and big returns.
Veritas, and big returns.

It’s the time of year when elite universities vie for bragging rights about the performance of their endowments. The probable winner this year is Yale University, which posted a whopping 20.2 percent return. Dartmouth reported a 19.2 percent return, and the University of Pennsylvania showed 17.5 percent.

Harvard, the 800-pound gorilla of the endowment world, reported a measly 15.4 percent. Not coincidentally, it installed a new chief executive officer for Harvard Management Co., which oversees the university's $34.6 billion nest egg.