And while Harvard probably won't release itsown, official performance figures until at leastthe end of this month, Light says the year provedto be "just excellent" for the endowment.
Still, even with the strengthened returns, theroad ahead is not likely to be entirely smooth orwithout peril for the University's money. AsHarvard officials are quick to point out, thereare no guarantees that foreign stocks willcontinue to do well.
"Things have a way of averaging out," saysLight. "I have no personal forecast about theshort-run."
In addition, a growing number of Wall Streetanalysts are predicting an imminent and sizablecorrection in the domestic stock market.
"The specter of 1987 haunts one," saysPresident Neil L. Rudenstine, referring to theinfamous Black Monday crash that sent the U.S.market reeling by nearly 23 percent on October19th of that year. Unlike many investors, Harvardunder Cabot weathered Black Monday quite well, asdid the New York-based Rockefeller Foundation,then under Meyer's financial leadership.
"Still, the idea of a [sudden drop] is less thespecter now than a rather steady erosion,"Rudenstine says. "One might not have that one,absolutely critical day, but rather severalcritical days."
And stocks aren't the only concern. In the lastseveral months alone, a series of stumbles in theendowment's private placement portfolio--long atarget of HMC's most spirited critics--have costHarvard tens of millions of dollars.
In March, for example, the University's $113million investment in a pair of Crystal City, Va.,office buildings was placed in serious jeopardywhen the U.S. Navy, the buildings' major tenant,announced plans to move within the next severalyears.
Meyer said at the time that the Navy'sdeparture would not necessarily hurt Harvard andcould even prove profitable over the long term,should new tenants lease the space at higherrates. But local government and business officialsgreeted that appraisal with skepticism, and HMCwas reported to have petitioned the Navy toreconsider the move.
In April, Hampshire Instruments, a NewYork-based high technology firm dealing withsemiconductors and heavily bankrolled by Harvard'sendowment, shut its doors after a drawn-outstruggle for survival. According to severalsources knowledgeable about the investment, theUniversity's loss amounted to at least $24million, and quite possibly $40 million. Whiledeclining to release their own numbers, HMCofficials have disputed those estimates, and havedenied that it would have a "significant impact"on the endowment.
And over the summer, Harvard and three otherinvestors filed suit against the MarriottCorporation, hoping to block the company's splitinto a healthy hotel operation and a debt-ladenreal estate division. The University claimed itsnearly $34 million investment in Marriott woulddiminish in value substantially as a result of thesplit.
But Harvard's argument was challenged by aDelaware Chancery Court judge, who called it"dark" and "Machiavellian." The Universityeventually settled its feud with Marriott and thecompany's breakup went ahead as planned.
Precisely because of such periodic, and veryvisible flops, however, and given the endowment'sunimpressive track record over the last severalyears, Meyer and other Harvard officials areunlikely to make much fanfare over the improvedresults of fiscal 1993.
Rather, as some are already doing even beforethe exact numbers are announced, officials maypoint to the higher returns as evidence of two ofthe University's standard refrains: first, thatthere are no inherent problems in the managementcompany's structure, and second, that theendowment's diversified asset allocation is thebest strategy over the long term.
Says Light, "The longer the time horizon, themore confident I am that we have a sensible assetallocation."
Ironically, that cautious tone is echoed bysome of HMC's most diehard critics. Says oneformer management company official, who asked notto be named, "You can't demonize them for one badyear, nor can you deify them for one good year."