A Large Interest

When Meyer became president of HMC in 1990, the endowment’s performance was inconsistent and economic forecasts were unpromising.

Internal Revenue Service documents acquired by The Crimson in 1991 indicated that some of HMC’s investment managers—including Eisenson—had salaries that reached seven figures in 1989, but their struggling portfolios limited their earning bonuses and severely reduced their salaries the following year.

But soon after his arrival, Meyer had moved toward greater oversight of the company’s money managers, who had previously been afforded much latitude in deciding how to invest the University’s endowment.

“The type of portfolio we run here has to line up with Harvard’s growth objectives, its risk tolerance and its spending objectives,” Meyer said in October 1990. “I don’t think that link has been made very closely in the past.”

Meyer said in an interview this week, however, that Harken may have fit the bill of HMC’s portfolio at the time of the initial investment in October 1986.

“Typically, we invest in assets that we think are a little bit undervalued,” he said. “We continue to invest in commodities and venture capital, and I would characterize those as high-risk.”

HMC insiders differ on whether holding 30 percent of one company was typical for HMC.

Bing Sung ’66, who was a member of HMC’s board of directors until the end of 1985, said that such large holdings were not the norm.

“It was not typical,” said Sung, explaining that such an investment would have required filing legally required SEC forms disclosing ownership.

But Turner provided a different assessment.

“In reality, it was very typical,” she said.

And despite Harken’s financial ups and downs, Harvard has said that the company was a profitable investment.

“We didn’t lose money on Harken. We made money on Harken,” said Meyer, who has seen the endowment grow from $5 billion to $18 billion during his time at HMC.

According to an article from The Crimson in 1992, HMC reported an overall 11.8 percent rate of return on Harvard’s endowment investments for the preceding fiscal year.