The 54-year-old Narvekar has led Columbia’s endowment since 2002 and notched an annualised 10.1% return for the 10 years ending in June 2015, tied for best among Ivy League schools. He will start December 5 and become the fourth chief executive in the last decade for Harvard Management Co.
He joins a $ 35.7 billion endowment reeling from a series of leadership shake-ups and disappointing returns. Harvard said last week it lost 2% for the fiscal year ending June 30, its worst investment performance since 2009. The last CEO, Stephen Blyth, left in July after 18 months.
A primary question facing Narvekar will be Harvard’s unusual “hybrid” investment model, said people familiar with the situation. The endowment gives money to outside managers but also employs its own traders who wager on assets such as stocks and bonds as well as overseeing holdings such as real estate. That differs from rival Yale University, which farms out nearly all assets to external money managers.
The board wants the next leader to take a hard look at that model and determine where in-house management should be discontinued, reduced or increased, these people said.
Some insiders and alumni have aired doubts about the endowment’s direction, questioning in part its ability to attract top traders who could make more elsewhere.
“I look forward to working with the HMC board and team and using my investment experience to serve Harvard in the most effective way possible,” Narvekar said in a Harvard release.
At Columbia, Narvekar hewed to the Yale endowment style of investing, though Columbia’s endowment also executed some internal hedging of its portfolio under his watch, people familiar with the matter said.
Narvekar, known as “Narv,” won’t necessarily follow that same investing style at Harvard, these people said.
Columbia’s endowment manages $ 9.6 billion, compared with $ 4.3 billion when Narvekar took over in 2002.
Columbia president Lee Bollinger said in a press release that Peter Holland would succeed Narvekar as chief executive. Holland has been the endowment’s chief investment officer since 2003.
Narvekar was a possible candidate to run Harvard’s endowment in 2014, but people familiar with the situation said he took himself out of the running early on, citing personal reasons.
Narvekar previously was a managing director at the University of Pennsylvania’s endowment. Before that, he spent 14 years at JP Morgan.
Under Narvekar’s leadership Columbia fared better than some schools during the last financial crisis. It lost 16.1% during the 2009 fiscal year, less than the average US higher-education endowment. Harvard’s loss that year was 27.3%.
Harvard picked Narvekar after considering seven people for the job by early September, said a person close to the situation. Robert Ettl, who was chief operating officer before Blyth left, said he didn’t want to be considered because he was more suited to running operations, said people familiar with the matter.
Massachusetts Institute of Technology endowment chief Seth Alexander passed on being considered for the job earlier in the search process, said people familiar with the matter.
“We are pleased to welcome Narv to Harvard and are confident that his leadership skills and deep experience at the highest levels of investment management will position HMC for long-term success,” said Harvard president Drew Faust.
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This story was first published by The Wall Street Journal