(d)avid (who ought to rejoin us as an author) points out this Business Week article:

“Harvard highlights how terribly wrong the endowment model can go when pushed to certain extremes in a climate of leadership crisis,” said the 81-page report, which was released today. The endowment model, pioneered by Yale University’s investment chief, David Swensen, relies on alternative assets including commodities, real estate and private-equity holdings to boost returns.

Read the whole thing, as well as this coverage in Insider Higher Ed. I have yet to read the report (pdf) but it looks interesting. Comments:

1) “aparent”, who ought to join us as an author, notes this section:

Jane Mendillo, Harvard Management’s chief executive officer, said in a letter this week that starting July 1 compensation of her senior managers will for the first time be linked to the fund’s performance. The university plans to reduce senior manager pay in any year the endowment loses money and will review compensation annually, she said in the letter.

and “wonder[s] how the Williams Investment Office salaries are paid …” As do we all! Here is my latest rant on that topic. The College refuses to report both how many Investment Office folk receive such bonuses and how much total money, if any, has been paid out.

2) The report harps on the conflicts inherent in having members of the Investment Committee (main example is Dartmouth) who serve two roles: First, they decide where the college should invest its money. Second, they manage that money themselves. As long as there is full transparency, I don’t worry about this. Greg Avis ’80 and Michael Eisenson ’77 are really smart! I trust Ephs like them to make good decisions. We just need enough information to keep an eye on them. See my three part series on the College’s Investment Report for complete coverage.

3) Exercise for the reader: Explain why SIEU paid for the report.

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