According to Huidekoper, the extra money Harvard could not put into venture capital was invested elsewhere.
According to Harvard Management Company (HMC) President Jack Meyer, with venture capital returns hitting triple digits this year, this capping problem became more important than ever before.
HMC can circumvent the problem by investing the leftover money in second-tier venture capital funds, which are less likely to be capped but may not be as lucrative.
"We will look for new groups with people who are a little bit less experienced," Meyer says. "We may look for secondary funds to get this exposure."
The Big Picture
These don't produce the spectacular numbers of venture-capital investments, but over the long term they're far less risky.
This year, in fact, investments in these areas made up for some of the under-performance in venture capital.
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