The University would put more money into these firms if it could, but venture capital concerns are limited in the amount of money they can accept, a problem for institutional investors with very large endowments--like Harvard.

"Suppose there's a very first-rate venture capital firm that has more investors willing to put in money than it has room to accommodate," explains Jay O. Light, director of the Harvard Management Company. "It looks at Harvard and Yale and says I'll take $10 million from each. The problem is that $10 million is a much larger percentage of the Yale endowment."

Meyer said that even if the Internet economy goes bust, Harvard has already made back much of its initial venture capital investments from dividend-like payments it gets from venture capital funds.

"There are lots of things I worry about and [losses in the Internet sector] would be one of them," he said. "I would expect that future years are going to be nothing like the last two in venture capital. On the other hand we've already received significant distributions. It's already been a success."

The University's holdings in commodities rose 49.9 percent, largely as the result of rising oil and gas prices over the summer. Performance exceeded the benchmark by 14 percent.

Harvard invests in commodities as a way to buffer its portfolio against losses in other investment categories, so the strong performance in this area came along with smaller gains in stocks this year.

"The reason we [have] commodities is that they are a very diversified asset," Meyer explained. "If commodities do well, other assets will do poorly."