Beare says the purchase of White River is probably more of a long-term investment, aimed toward future financial development.

Griswald concurs, saying, "the purpose of an endowment is to create a permanent capital for an institution. A university adopts any strategy that can further these aims."

But, despite some reservations, analysts do not doubt HMC's ability to play the financial market.

"Harvard is probably unusually capable of judging," Griswald says. "It depends on the company. Acquiring a company is not intrinsically taking a risk."

He adds, "They have been extremely successful. This is probably as well researched as anything done in this area."

A relatively new company, White River was a subsidiary of Fund American Enterprises Holdings Incorporated until 1993. Currently, Fund American is the largest shareholder in White River.

Fund American was Harvard's competitor in a bidding war for White River this spring, but Harvard's lofty endowment finally gave it the upper hand.

"We certainly would have liked to have earned it at $85 to $90 per share," says Michael S. Paquette, controller of Fund American. "But we can't go much higher than this."

Paquette says there is a "slim to none" chance that Fund American will make another bid to top Harvard's $90 per share.

Harvard previously had a small investment in White River, owning 21,959 shares in 1997. Fund America owned one million shares in 1997, about five times Harvard's investment.

Then last December, Harvard offered to buy White River at $82 a share, bringing the overall price to $400 million, which Harvard agreed to pay in cash, according to the report on the Securities and Exchange Commission (SEC). The board approved the deal.

But Paquette says, for Fund American, as the largest stockholder, buying the remaining shares in White River was financially preferable to accepting payment for the shares from Harvard at $82 a share.

"We didn't think that the first deal was all that exciting," Paquette says.

The contract could be terminated if the board recommends another transaction over Harvard's acquisition.

On March 11, Fund American offered to pay $85 per share, compared to Harvard's $82.

Harvard revised its offer. Then on March 30, Fund American again increased its offer to $90. Harvard countered with an offer of $90.67 a share on April 2.

Paquette attributes Harvard's ability to continue upping its offer to its status as a nonprofit organization, which exempts it from paying taxes on its earnings--including profits from White River.

Paquette says White River has highly appreciated stocks with large tax liability, making it a good investment for Harvard.

With Harvard's deep pockets, similar investments are certainly possible in the future. But whether Harvard will continue this practice will probably depend on the success or failure of the White River acquisition.