UPDATED: March 30, 2017 at 4:44 a.m.

Months after announcing it would radically revise its investment strategy by the end of the fiscal year, Harvard Management Company will invest at least $300 million into a hedge fund formed by some of its former money managers, Bloomberg reported on Thursday.

The money is earmarked for a hedge fund formed by former HMC employees Michele Toscani and Graig Fantuzzi, two investors who previously served as portfolio managers at the University’s struggling investment arm. The news came earlier this year after HMC’s Chief Executive Officer N.P. Narvekar announced the firm would cleave its internal staff in half by the end of the calendar year and shutter most of its internal investment team by the close of the fiscal year.

Additionally, Rene Canezin, a managing director at HMC and head of public markets and natural resources, is considering striking off from the firm to launch his own hedge fund, according to Bloomberg. If he does, HMC will reportedly place another $300 million in the care of his new hedge fund. Canezin did not respond to Bloomberg’s request for comment, and HMC spokesperson Emily Guadagnoli declined to comment for this story.

Harvard’s highly-successful real estate investment team will also split from HMC but still invest some of firm’s money, according to a letter Narvekar wrote in January outlining a five-year plan to improve the University’s lagging endowment returns. The shift, while significant in the scope of HMC’s history, aligns the firm’s investment strategy with that of peer institutions and will likely yield increased returns, some experts predict.

It is typically more expensive to use external managers to invest a firm’s money than to rely on internal teams, but University President Drew G. Faust said in February that the additional costs Harvard will incur are justified if new external managers can revitalize the University’s languishing endowment. In fiscal year 2016, Harvard returned negative 2 percent on its investments—the lowest it has posted since the height of the financial crisis. Faust said the poor endowment performance was likely to pressure University budgets for years to come.

—Staff writer Brandon J. Dixon can be reached at brandon.dixon@thecrimson.com. Follow him on Twitter @BrandonJoDixon.