In an effort to increase control over its $4.5 billion endowment, Harvard money managers have tried to limit the University's investments to fewer companies this year, Vice President for Finance Robert H. Scott said yesterday.

"We've tried to reduce the number of companies in which we are invested," Scott said. This policy simplifies the University's extensive operations in the stock market, he added.

According to an annual financial report released yesterday, International Business Machines (IBM) was the University's top investment, accounting for more than $54 million of the endowment last year.

Overall, public stocks accounted for about $2 billion of the University's $5.1billion general investment account in 1989, thereport said.

The financial report also showed an increase inHarvard's investments with several companies whosecontroversial practices have made them the focusof public scrutiny.

Harvard--and other large privateinvestors--traditionally monitor the ethicalpractices of companies in which they hold stock byvoting on proxy resolutions. But the Universitydoes not initiate these proposals, preferringinstead to have its Corporation Committee onShareholder Responsibility (CCSR) respond to eachissue as it arises.

Exxon Corporation, a controversial Harvardinvestment because of its ties to South Africa,moved up in the ranks last year to number three,accounting for more than $45 million in stock.Last year, the University held slightly more than$25 million in the oil company.

The CCSR and its advisory committee divided onthe Exxon issue last spring, with thealumni-student-faculty board voting six to four toask the oil company to "cut all ties" with SouthAfrica. The CCSR abstained on the issue.

According to CCSR Secretary Elizabeth A. Gray,Harvard policy does not extend to "cut all ties"resolutions, but only governs companies which havedirect investments in the apartheid-ruled country.

"'Cut all ties' [resolutions]...come from adifferent angle--they call for an absolute ban oneverything," Gray said. "The reason the [CCSR]abstained is they didn't feel that this is thepolicy place that the University had reached."

The CCSR's advisory committee consists ofmembers who do not neccesarily reflect the viewsof Harvard's administration, Gray said yesterday.

"People who tended to support ['cut all ties']often thought the University's policy should movefurther," Gray said.

Tobacco Companies

In 1988, the CCSR voted to ask Philip MorrisCompanies, Inc. and RJR-Nabisco--both tobaccomanufacturers--to provide information about theiradvertising practices in developing countries,according to Gray.

At the time, Philip Morris was Harvard's thirdlargest investment, accounting for more than $28million. Since then, investments in the tobaccocompany have increased by more than $16 million,according to the financial report.