HBS Prof To Steer Harvard Funds

As the search continues for a permanent replacement for outgoing Harvard Management Company (HMC) President Mohamed A. El-Erian, the University announced Friday that a temporary head will come from its own ranks.

Yesterday, Harvard Business School (HBS) Professor Robert Kaplan became the interim CEO of the group responsible for investing Harvard’s endowment, Harvard said in a statement last Friday.

The move may signal an increasing adherence to El-Erian’s goals of creating more ties between the University and the traditionally aloof investment group, an issue he had remained passionate about throughout his tenure. El-Erian, himself, joined the ranks of the HBS faculty, serving as a lecturer on business administration.

Kaplan earned his M.B.A. from HBS in 1983 and served as vice-chairman of Goldman Sachs from 2002 to 2006, where he currently serves as a senior director.

He also teaches classes on management practice at HBS, is a founding co-chair of Harvard’s NeuroDiscovery Center, and serves on the boards of Harvard Medical School and the Jewish Theological Seminary.

Professor of Human Relations Jay W. Lorsch—one of Kaplan’s colleagues at the Business School—described the interim CEO as “immensely capable” and said that the decision to appoint someone already loyal to Harvard could lead to more continuity at HMC and that the move fits both parties well.

He added that Kaplan is neither a traditional academic nor a stereotypical investment banker.

“He knows money management well and he knows people well, and if anybody can do a better job than the people who have been there in the past, it’s Rob.”

El-Erian, who has led HMC for almost two years, said in September that he would step down at the end of this year to co-head his former company, PIMCO. According to University spokesman John D. Longbrake, Kaplan’s early start will enable the transition to take place as he completes teaching this semester.

Appointing an interim CEO two months into the search process could be an indication that the search committee—comprised of the 12 members of HMC’s Board of Directors—is concerned about finding a full-time replacement before El-Erian departs.

The previous search took 10 months before El-Erian was selected. Members of the board have declined to comment on the state of the search because it is still ongoing. Kaplan could not be reached for comment.

El-Erian took the helm of HMC after the departure of Jack R. Meyer and more than 30 other HMC employees in late 2005. In fiscal year 2007, El-Erian’s only full year as HMC president, Harvard’s investments earned returns of 23 percent, adding $5.7 billion to the endowment.

—Staff writer Nathan C. Strauss can be reached at strauss@fas.harvard.edu.