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Harvard Management Company is moving to outsource the management of its real estate assets to Bain Capital—the largest Boston-based private equity firm—according to a Bloomberg News report published last week.

HMC, which manages Harvard’s $37.1 billion endowment, has been considering spinning off its real estate team since January. At the beginning of 2017, N.P. Narvekar, the firm’s CEO, wrote in a letter to Harvard affiliates that the “the team responsible for managing HMC’s direct real estate investments is expected to spin out and become an external manager by the end of calendar year 2017.”

Harvard’s endowment grew 8.1 percent in fiscal year 2017, the lowest among Ivy League endowments. Since Narvekar’s appointment as CEO in late 2016, HMC has moved to eliminate internally-managed investments, seeking to lay off nearly half of its staff by the end of the 2017 fiscal year.

According to the Bloomberg report, Bain would hire roughly 20 people from HMC and become the money manager for Harvard’s real estate investments.

Harvard’s real estate portfolio has traditionally been one of its strongest asset classes. In the 2016 fiscal year, real estate assets comprised 14.5 percent of Harvard’s $35.7 billion endowment and garnered 13.8 percent returns, higher than the University’s 2016 yields in other assets classes such as private equity, domestic bonds, or foreign equity.

In the University’s financial report for fiscal year 2017, Narvekar cited strong real estate returns as one of the reasons for the growth in the endowment size. But Narvekar also wrote in the report that the University has executed sales in real estate, generating “significant liquidity for the endowment.” He reiterated HMC’s expectation to spin off the real estate platform.

“We are working closely with the team to support this effort and to execute a mutually beneficial arrangement as an external manager,” he wrote in the report.

Bain Capital and Harvard Management Company both declined to comment for this the story.

—Staff writer William L. Wang can be reached at william.wang@thecrimson.com. Follow him on Twitter @wlwang20.