Harvard University’s endowment seems to have reaped the reward of doubling down—literally—on private equities, as its investment portfolio returned 11.9% for fiscal year 2025, raising its asset value to $56.9 billion from $53.2 billion a year earlier, when it earned 9.6%.
Harvard Management Co. CEO Narv Narvekar wrote in his annual letter to the university community about the fund that the strong performance “not only strengthens the University’s financial position but also underscores the essential role of the endowment in sustaining Harvard’s academic mission.”
Endowment funds supply nearly 40% of Harvard’s annual operating revenue.
When Narvekar took over leadership of Harvard Management Co. eight years ago, he began his overhaul of the endowment’s investment strategy by calling for a move to a generalist model from the “silo” approach, under which HMC had focused its work within specific asset classes. He said the silo approach placed too much emphasis on individual asset class benchmarks, which led to unintended consequences, such as gaps in the portfolio and unnecessary duplication.
“The silo approach did not lead to the best investment thinking for a major endowment,” he wrote in HMC’s 2017 financial report. “We have now moved our approach towards a generalist investment model in which all members of the investment team take ownership of the entire portfolio.”
When Narvekar and his investment team took over management of the endowment’s portfolio, private equities accounted for only 16% of the portfolio, nearly half that of public equities, which had the highest allocation at 31%. But as of June 30, private equities represented Harvard’s largest asset allocation at 41%, with only 14% in public equities, along with a 31% allocation to hedge funds. This is a slight tweak from last year when it held 39% in private equities and 32% in hedge funds, with public equities were also at 14%.
Among its latest private equity allocation, 14% was in venture capital, 13% was in buyouts, 10% was in growth venture, and 4% was in growth buyouts.
In his 2025 “Message from the Chief Executive Officer,” Narvekar boasted that the portfolio has earned annualized returns of 9.6% since he took the helm, which he noted exceeded the long-term target return of 8%.
“Harvard Management Company has in recent years undertaken a thoughtful assessment of the investment portfolio, recognizing that a singular focus on asset allocation—while a significant contributor to returns—can mask important considerations around the volatility of those returns, and of equal importance, the University’s ability to absorb that volatility,” he wrote.
Narvekar said his team has begun a “measured increase” to its portfolio’s risk assets, mainly by raising equity exposure.
“Encouragingly, these initial steps have already contributed to stronger performance,” he said, adding that “HMC will continue to gradually adjust the portfolio over time, with an eye toward enhancing long-term growth.”
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