Harvard Slashes Stock Holdings

Harvard slashed two-thirds of its holdings in publicly traded stocks during the three months ending Dec. 31, an indication that the University is reshuffling its portfolio following unprecedented losses in the ongoing financial crisis.

The overall value of Harvard’s publicly traded equities fell from $2.8 billion in September to only $571 million in January, according to a required quarterly disclosure report released Tuesday night by the Securities and Exchange Commission.

While the disclosed assets represent only a small fraction of the University’s total holdings, the shift hints at possible changes in the breakdown of the University’s investment portfolio, as Harvard’s money managers seek to navigate continuing market turmoil.

Harvard’s endowment—which is also invested in private equity, fixed-income bonds, and real assets not listed in the SEC 13F disclosure form—dropped at least 22 percent in the four months ending Oct. 31, Harvard officials announced in December.

According to University spokesman John D. Longbrake, 70 percent of the endowment is also currently managed by external investment firms.

As of Sept. 30, Harvard had roughly $460 million, or 20 percent of its total 13F listed holdings, invested in emerging markets. But by Dec. 31, those assets—then only valued at $224 million—had come to represent nearly 40 percent of its total holdings, even though Harvard had sold one-third of its emerging market equity.

Form 13F requires institutional investment managers to list all holdings in exchange-traded stocks and closed-end companies if they manage over $100 million in such assets. Whereas closed-end companies sell a fixed number of shares which are then traded on exchanges, open-end companies—such as mutual funds—pool publicly-raised money and invest the funds in stocks, bonds, and other securities.

Emerging market equity represented 10 percent of Harvard’s total portfolio and returned 7.6 percent in the fiscal year ending last June 30, according to University reports. Fixed-income bonds represented 13 percent of the University’s holdings, while real assets—such as real estate and investments in timber and agricultural land—comprised 26 percent.

The equity shift follows reports last month of Harvard attempting to sell $1.5 billion of private equity, only to reject buyers’ offers as too low. The move would have marked one of the largest-ever sales of a private equity portfolio, according to the Wall Street Journal.

—Staff writer Peter F. Zhu can be reached at pzhu@fas.harvard.edu.