The Harvard Management Company (HMC) is downsizing its internal equities platform.
The $37.6 billion endowment has removed positions in its public equities trading group, a person familiar with the matter confirmed.
HMC eliminated eight roles last week, according to Bloomberg.
“We continuously evaluate how we can best allocate capital and leverage HMC’s comparative advantages to maximize performance over the long term,” the endowment’s spokesperson told CIO.
HMC will pursue more relationships with external managers, the insider said, in addition to cutting staff positions.
The in-house team will redirect its focus to optimal beta management, for better target portfolio completion, rebalancing, and hedging, the source continued. The group will also aim to make more highly selective equity allocations.
A blend of internal and external investors manage Harvard’s public equities. The asset class returned 2.9% for the 2015 fiscal year, according to the annual report.
“Our hybrid portfolio consists of the best managers, whether internal or external to HMC, who are capable of delivering outperformance and strong investment returns through a diverse set of strategies across a broad range of market conditions,” CEO Stephen Blyth wrote in the 2015 report.
The endowment has seen a number of high-profile exits since Blyth began restructuring the fund’s asset allocation and investment decision-making processes.
Last November, Vice President for Sustainable Investing Jameela Pedicini left to join outsourced-CIO Perella Weinberg. Head of Natural Resources Investments Alvaro Aguirre-Simunovic stepped down in September nearly 12 years with the fund.
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