Harvard Names New Endowment Head, Underperforms Peers in 2014

The Harvard Management Company (HMC) has named an internal candidate to one of the most sought-after positions in asset management: President and CEO of the world’s largest university endowment.

Current Managing Director and Head of Public Markets Stephen Blyth will take over the $36.4 billion fund from outgoing CEO Jane Mendillo on January 1, 2015.

The announcement of Blyth’s upcoming promotion coincided with the release of HMC’s 2014 annual report, which once again revealed sub-par returns relative to peers.

In her final year of leadership, Mendillo led the endowment to 15.4% returns for the fiscal year ending June 30. US endowments of $500 million or more gained an average 16.69% for the same period, outperforming HMC by 129 basis points, according to Wilshire Associates. 

Mendillo announced her intention to resign last spring—a move that surprised fund directors, according to some reports.

Her impending departure left open one of the most highly regarded jobs in institutional asset management. The search for her replacement had already begun when the HMC disclosed Mendillo’s intention to step down. A number of top investment professionals revealed to CIO that they had been approached to apply.

Blyth, the winning candidate, joined HMC in 2006. As head of public markets, the Harvard and Cambridge University alumnus oversaw roughly 40% of the endowment’s assets.

“He has excelled in his role leading the investment of HMC’s internally managed portfolio through a period of often volatile market conditions,” said James Rothenberg, chairman of the fund’s board of directors, which conducted the nationwide search.

Rothenberg called the future CEO “an extraordinarily talented investment professional with admired leadership qualities, uncommon savvy about markets, and a deep dedication to the purposes of higher education.”

Related Content: Harvard’s Jane Mendillo Resigns